Q1 2021 Vyant Bio Inc Earnings Call

Good morning, and welcome to the bio bio first quarter 2021 shareholder and Investor webcast and conference call Yesterday May 17, 2021. The company filed its Q1 quarterly report on form 10-Q and issued a press release summarizing these results.

And provide an overview of activities in the first quarter. Today's discussion is being recorded and will be available for replay a replay of today's webcast will be available on the die on by all Westcott Web site following todays call on.

They're not typically the links can be sent to you by contacting I R. I buy on bio Dot com all participants on this call will be in a listen only mode. During the presentation.

It's on station will be followed by a question and answer session and at this time I would like to turn the conference over to Jay Roberts, Chief Executive Officer of Bio dialed. Please go ahead Sir.

Thank you operator.

Thank you all for joining the bio bio Q1, investor webcast and conference call.

We're pleased to be in full swing now with our merger activities are completed we are focused on executing on our business plan.

There's also great pleasure to speak with you today to share our enthusiasm to give you some insight into how we envision the near term future.

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On the call with me today is volume Bio's, Chief Innovation Officer Peak day.

And our Chief Financial Officer, Andy what price.

Following the Safe Harbor statement I will provide a strategic overview and update on recent corporate developments and Andrew will take us through a brief financial update and discuss key accounting matters related to the merger.

I will then make some closing remarks.

Have ping available with Andy and me to take your questions.

Now I'll turn the call over to our CFO, Andy Le friends.

Thank you Jay and welcome to all we'd like to remind you.

Debt various comments about future expectations plans and prospects constitute forward looking statements for purposes of Safe Harbor provisions under the private Securities Litigation Reform Act of 1995.

<unk> bio cautions that these forward looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicating clean risks described in the company's filings with the SEC.

Any forward looking statements made on this conference call speak only as of today's date Tuesday may 18th 2021, inviting bio does not intend to update any of these forward looking statements to reflect events or circumstances that would cause that would occur after todays date.

This conference call is being recorded for audio rebroadcast on bio <unk> website at Www bio bio dot com with that I would like to turn the call back over to Jay Roberts Jay.

Thanks, Andy.

As we proceed into Q2 I think it's important to remind everyone that the merger closed only 45 days ago.

And I can assure you the entire bio bio team is operating at full tilt.

We're making outstanding progress, which we're here to highlight for you today.

Before we cover the financial results of Q1, I would like to recap a few highlights of the past several weeks since the merger closed.

First to remind everyone of our vision.

Interest to recognize business of drug discovery is difficult and has historically been time consuming and expensive to bring new therapeutics into the clinic.

But it was highly focused on discovering novel applications for repurpose therapeutics.

We believe the drug discovery needs to progressive what you're ball because we know the widely used models for predicting safe and effective drugs have underperformed.

Evidenced by the billions of dollars on years of time, it takes to bring novel drugs to market.

With this as a backdrop for our industry operates.

Converging and impactful approach to drug discovery with data science, and biology, driven technologies at the core with cross functional engineering disciplines and regulatory expertise.

We have commercialized the development engineering and manufacturing of proprietary disease models built an induced pluripotent stem cell or I P. S C technology.

Which are used to screen novel and repurpose compound targets.

The most mature disease models are being used to fund therapeutic candidates in the central nervous system, using our micro brain platform.

In early 2020, we partnered with Adam Wise.

Together, we're interrogating hundreds of promising compounds to identify a novel treatment for ret syndrome.

We expect there will be results from this effort within a very short period of time.

Which will enable us to progress through the discovery lifecycle.

We've also made significant advancements with our CDK all five neurological disorder disease model on those.

Other application for our microarray platform.

Experimenting with numerous therapeutic candidates.

We believe have promise.

We've also made progress with the filing of the provisional patent or on a series of repurpose compounds that we are progressing in our preclinical programs to treat ret syndrome.

We will be discussing a lot more in the coming months.

To give you a little more insight into this the monarch technology platform that we're using to discover the most suitable compounds. We have developed a unique portfolio of intellectual property and know how to bring forward highly industrialized and functional human organize.

The importance of this is critical to understand it.

Standardization on what our biology chemistry and data scientists are doing in the wild which allows our proprietary software analytics to perform incredibly complex analysis to generate valuable data and novel <unk>.

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This resulted in the ability to quantitatively rank order the efficacy and safety parameters for a large library screenings across multiple drug targets and discern the smallest nuances between a handful of potential drug candidates that could be different could be the difference between drug failure or drug approval.

And more importantly is about shortening the time to bring the best medicines to patients.

On April 20, <unk>, we announced the collaboration with her day O smile ancillary up to design and qualify biomarker specific small protein therapeutics initially for the treatment of her two breast cancer. We are very excited about this program and are on.

On building a model for rapid or duration of therapeutic design using artificial intelligence and in vitro avatar clinical trials that will enable the design development and testing of potential therapeutics on specific patient populations during preclinical development.

The collaboration capitalize on the unique capabilities of each company to design manufacture and test small protein therapeutics the target multiple biomarkers derived from whole genome sequencing of patient populations.

Using proprietary AI or Dallas would generate in silica protein sequences designed to bind specific disease targets and will serve as a blueprint for the collaborative teams experts in in vitro and in vivo preclinical drug discovery to produce the protein and rapidly.

Iterate the structure using a highly efficient expression system.

Using hilarious patient specific cell model cohorts, the purified protein will be critically evaluated for target binding and further optimized to improve performance across an array of disease specific genetic biomarker expressing cells.

In addition, our stem on X team will contribute a cross functional set of physiologically relevant human induced pluripotent stem cell organoid models for in vitro toxicology studies.

Once fully optimized by the team blending bio objective will be to deliver regulatory readiness and a maximally derisk drug candidate.

The combined solution will provide data in human based insights not usually available until after a costly clinical trial.

We've also made solid progress in the last 45 days of integrating the combined businesses.

We have multiple programs in action that bring the scientific teams of the moniker and vivo for them working closely together.

Leverage our respective capabilities.

Our human derived models combined with the latest data science and software technologies.

Our identified are identifying in rank ordering repurposed and novel compounds like therapeutic candidate.

Along with the addition of the vivo form cancer cell line asset and scientific expertise in oncology, we have begun to advanced models targeting glioblastoma and Parkinson's disease.

Finally, since the merger closed at the end of Q1, we have entered into active discussions with prospective pharma partners to offer exclusive access to certain disease models.

Spectra enter into license agreements for access to both novel and repurpose therapies.

The company is striving to receive a mixture of upfront payments licensing fees milestone based fees and ongoing royalty payments.

Now I'll turn the call over to Andrew on Frank Our Chief Financial Officer Andy.

Thank you Jade.

Hello, everyone and thank you again for joining our call today I will review our balance sheet position as of March 31, 2021, and our financial results for the quarter.

First quarter 2021 as a reminder, the monitor was deemed to have acquired cancer genetics for accounting purposes.

On the merger was closed on March 30th 2021.

Therefore, the historical financial statements of the company now reflect the historical come on its financial statements.

Therefore, the company's first quarter financial results are primarily in the stem on X operations is only one day of post merger historical cancer genetics in vivo farm operations are included in the Vine bio first quarter 2021 operating results.

The operating results for the first quarter of 'twenty 'twenty. One include approximately $5 million of nonrecurring merger expenses and noncash charges to operations related to stem on X pre merger financing.

Prior to the completion on the merger cancer genetics raised $27 $5 million of gross proceeds in two offerings as well as received $3 6 million in proceeds from common stock warrant exercises in the first quarter of 2021 in.

In addition, stem on X rays $7 million of gross proceeds in the first quarter of 2021.

As a result, the company had approximately $33 1 million of cash.

At March 31, 2021. This provides cash to operate our business over the next 18 to 24 months.

Moving to the income statement.

Revenues increased 32% or $54000 to 222000 per the three months ended March 31, 2021, as compared with 168000 per the three months ended March 31, 2020 product revenues accounted for the increase in revenues.

Research and development expenses decreased by 19% or $189000 to $820000 for the three months ended March 31, 2021 from $1 million.

For the three months ended March 31 2020.

This decrease is principally due to less research and development costs incurred at our Maple Grove facility.

Selling general and administrative expenses increased by 46% or 383000 to $1 2 million for the three months ended March 31, 2021 as compared with 833000. The three months ended March 31 2020.

The quarter ended March 31st 2021 include stock based compensation of $331000 of which $317000 relates to March 30th 2021 stock option grants, including grants to the newly formed board of directors that vested that vested immediately.

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The company incurred incremental professional services of 222000 in the first quarter of 2021 as compared with the prior year period related to accounting.

Audit and other professional services that were not deemed to be one time merger related costs.

This period over period increase was offset by a $161000 decrease in sales marketing and business development expenses due to a realignment of the company's revenue strategy to a licensing model in Q1 2020.

And resulting in lower head count and reduce expenses also related to the COVID-19 pandemic.

Merger related costs for the three months ended March 31, 2021 were $2 $1 million. These professional service related cost and investment banker fees were incurred related to the merger.

Importantly, total other expense for the three months ended March 31st 2021 was $2 $9 million and included a number of nonrecurring non cash related items related to the conversion and exchange of the <unk> capital structure to divined bio common stock.

These non cash items included a 250000 mark to market loss for an embedded compound derivative from the <unk> 2020 convertible notes.

A $2 $5 million loss on the conversion of these notes to equity upon the closing of the merger.

And the 'twenty two 'twenty 'twenty convertible notes interest expense of 364000 that was converted to common stock. This is offset by a $214000 mark to market gain for our warrant liability.

I will close for now and hand, the presentation back over to Jay Roberts for closing remarks Jay.

Thank you Randy.

As we come to the final part of this presentation I would like to conclude with the following takeaways.

First I'd like to reiterate how pleased we are now that the merger was completed at the end of Q1 fueling our activities into Q2 and beyond.

We're very encouraged and proud of our accomplishments in this very short period of time, they are dedicated to executing on our business plan and keeping our promise to our employees investors shareholders and our business partners to bring innovative novel and repurpose therapeutics through the discovery phase of drug development.

Please stay tune as we move deeper into the execution phase of the merger.

We also invite new listeners to become more familiar with bio as news and information becomes available we will be communicating updates via press releases, social media and the new bio bio website.

Adjusted parties are invited to sign up for the press release distribution list. Please visit our website.

In closing for interested investors, we are beginning on an expanded effort to speak directly with the fundamental life science investment community.

Happy to arrange one on one calls for those who wish to learn more about bio bio.

With that I invite Andy what France opinion to join me as we open up the line for Q&A.

Thank you.

So ask the question just press star one on your telephone to withdraw your question press the pound or cash King. Please standby, while we compile the Q&A roster.

We have a question from the line of Carl Byrnes with Northland Capital markets. Your question. Please.

Great Congratulations on the progress and thanks for the question.

You completed the quarter with approximately 33 was $33 1 million in cash and it looks like the cash used from operations in the Q was around $4 6 million I'm wondering if you could provide guidance with respect to cash runway I think prior guidance was well into 2022 and if this.

Guidance includes any contribution from potential upfront payments from our partners and licensees. Thanks, and then follow up.

Okay. Karl Thanks, that's a great question.

Actually Andy why don't you take that one was our CFO other would be good.

Yes.

If you think about the.

Financial results that are in the same on the cash flows of $4 6 million also includes about $2 $1 million of merger related costs. So you think about the the actual.

Kind of as adjusted.

Cash flow burn in the first quarter from the monarch Standalone standpoint, it was about $2 $5 million.

In my prepared remarks, we commented on that we do believe that we have sufficient cash on the next 18 to 24 months.

And so we expect our cash burn to kind of be in that.

$9 million to $12 million per year sort of burn as we work on continuing to develop our technology.

Great. Thanks, and then just a follow up question with respect to what might be a realistic potential timing of first in human studies for the rats candidate.

0126, and then also potential <unk>.

Enabling studies on realistic potential I'd, enabling studies for the right candidate that.

That's a partner with atomized. Thanks.

Yeah, So Karl let me get started I'm going to let opinion.

To that but they.

So we're anticipating that in both cases.

To start to see those kind of results in the beginning part of 2022.

So we've got very good progress wherever we're quite happy actually with the progress that we've made so far we see the certain steps that we have to take when we come into the remainder of 2021.

Optimistically, we think 'twenty 'twenty, two sort of first half of the year.

Paying you happy to let you expand on that.

And I think you're right Jay.

I would just say that one of the advantages of our organoid platforms have the ability to find repurposed and novel Therapeutics.

It's our strategy to both our sales platforms for both day and so these.

These pathways.

Great. Thanks, that's very helpful.

Thank you again for a question simply press Star one on your on your telephone.

Yeah.

Okay.

Yeah.

Yeah.

And this concludes our Q&A for today I will pass it back to management for any final remarks.

Okay. Thank you.

Carmen operator.

Again.

Just like to.

Thank you everybody for joining today, we're very excited about the future.

Again.

We are certainly inviting.

Investors lifestyle fundamental life science investors.

We're open to taking your meetings further questions. After this call and hope everyone has a great day. Thank you.

Thank you and this concludes today's program. Thank you for your participation on this.

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