Q3 2021 Erytech Pharma SA Earnings Call
Good day, and thank you for standing by welcome to the Aerotech Pharma third quarter 2021 business update conference call.
At this time all participant lines are in listen only mode.
After the presentation there'll be a question and answer session.
Can I ask a question. During this session you will need to press Star then one on your telephone keypad.
Please be advised today's conference maybe recorded.
If you require operator assistance during the call. Please press Star then zero.
I'd now like to hand, the conference over to your host today Gil Beyen Chief Executive Officer. Please go ahead.
Thank you.
Good afternoon, good morning Olga.
Thank you for joining us for our update call to discuss the key highlights and financials for the first nine months this year.
We issued our Q3 business and financial press release yesterday evening.
Should be able to find it together with the webcast presentation on the investors section of our website.
Joining me on this goal year to date our Doctor.
<unk>, our Chief Medical Officer, and Eric Soyer, Chief financial and Chief operating Officer.
Before starting I would like to draw your attention to the disclaimer on slides two to remind you that today's call includes forward looking statements such as relating to the Companys operations anticipated timelines and financials.
As you know the only both risks and uncertainties that could cause actual events and results to differ materially.
No.
Slide three the agenda.
As usual I will start with a short introduction and present the key business highlights of the year to date and focusing on the key developments since our last call in September.
Don will then provide an update on the status and the progress of our clinical and regulatory programs to date.
Which Eric will present, an update on our key financials.
He will also summarize the strategic priorities forward.
And expected milestones for the coming year before we open them up for a Q&A ultra of us will be available to answer your questions.
And on slide four for people new to the company a brief overview and everything is all about red blood cells focused on the development of Red blood cell based cancer therapeutics.
Using.
Our Ah recaps technology that allows to Incapsulate therapeutics compounds in red blood cells to improve therapeutic effects.
Ah report area stops, which is asparaginase loaded and red cells is targeting cancer cells by describing them.
<unk> and <unk> two.
I mean, unless they need for their growth and survival with.
With areas plus we have now a very solid clinical experience base with more than 10 trials six of them in yellow.
No.
Are we closer to the commercial stage more in a in a couple of minutes.
Also.
Also reminded we are producing all of our product candidates and to fully operational GMP facilities.
For Europe.
New Jersey for the U S.
But also U S. Europe in terms of shoulder base with Michigan, both list of Euronext and NASDAQ with roughly half of the shareholders on both sides.
The ocean.
So now coming to slide five the key business highlights business highlights.
Over the last months it has been.
A lot has happened since our last call in September.
The first one obviously start like the one disappointing.
Our long awaited phase III results in second line pancreatic cancer.
In which we have so much time energy EBIT Volkswagen tiers.
Not live up to what we had seen the phase II trial.
And then we'll come back.
Again, the key findings in a in a minutes.
We are nevertheless, encouraged by the signals we saw in the subgroup of patients in the Tribeca, One trial, a subgroup of patients treated with full theory.
500 issue and there was no.
Where we saw the survival benefit that is.
Roughly on the order of magnitude the ones we were.
Wanted to have seen.
The entire trial to three months survival median survival benefit.
So it's an interesting signal, especially since we saw a similar.
We saw an initial sign of this subgroup, having a better responses in the phase two trial.
With full folks and also demand will show encouraging signals that we're seeing in the ongoing phase one trial, where we're combining our areas spots with fulfillment.
Different variations on the same theme.
We.
Phase one trial in.
At the Georgetown Lombardi Center.
Was able to we were able to determine.
We commented phase two dose the MTBE last.
Months.
The dose at which.
The topic of one trial was run.
And as I mentioned already but interesting to see that in the first evaluable <unk> patients we saw.
Encouraging activity.
Clinical activity.
We're also very obviously the focus is now at least now.
Our progress in yellow.
The <unk> trial, the novel trial that read out in December positive data in <unk>.
Patients, who develop hypersensitivity to Pegylated asparaginase.
This is a smaller indication than the pancreatic but it's in high unmet medical need.
Indication where.
The <unk> product.
Clearly has advantages and where.
We are now.
A couple of months of beef to submitting our BLA.
In the U S biologics license application.
Targeting and turning this around year end.
And we were very encouraged by the fact that would be up this fast track designation that was granted in.
In July.
Now.
The yellow is a smaller indication in PV.
We're planning for for.
Our success, but also planning for a plan.
R&D and <unk> includes debt.
In order to get the maximum value of our our ALLL.
Activity M&A level market opportunity that we are looking for opportunities to advance partnering options to advance. This both on the development and the commercial side. So we launched a process with a strategic adviser to evaluate strategic options.
With the portfolio.
Options in neuro and see how we can.
Create and generate most value from the ALLL and from our platform and manufacturing capabilities every.
<unk>.
Tell more about this.
And.
At this stage I think best to go to the next slides to pass the mic to E mail them to give an update on the clinical programs.
The floor is yours.
Thank you.
Good morning, good afternoon.
And it's always exactly John number seven.
Lee.
Very quickly.
The Carolina.
Faced with I'll ask Jesse to try the second one.
Does it concern.
Which was coming back.
The 120 patients in second line setting and my thanks to either chemo.
Let me start with Nike.
You may recall is that.
Still.
<unk> or <unk>.
Any gene, which contain five to you either to the generic I do need to Kent or.
The primary endpoint for that study with overall survival.
Has that issue once it until clients.
Or <unk>, two or three months from I mean, just to buyback.
Six months.
So two weeks ago, we have.
Ill put it unfortunately.
Some of the veggie enriched in slide number eight.
In point of on survival.
So you can see that there's still gas story.
Slide <unk>.
The increase in the median survival signal.
On slide <unk>.
36.7 months.
Portfolio.
It looks like we were.
The Q4, so we're looking for pointed until five as a minimum and basically <unk> 92.
Months.
And what do we have no choice, so far but that will be presented.
In a major conference that we looked at the baseline characteristics, we looked at subsequent SEC Pete.
Got lost in terms of that robustness of the treatment of course the different Brooklyn.
Brooklyn noise at sub growth and we have not found any confounding factors.
That could have affected the outcome there.
The primary outcome of that client.
Moving to slide number nine as part of our <unk> analysis, we wanted to check that survival and they do treat these hospitals I E <unk> Jim.
Subgroup.
And then if you can or slash.
Based on our crop.
And so here, what we have seen and you look at Kaplan Meier.
It is an interesting.
Let me again improvements in.
In patients who received IV Gen. Five if you will.
Eddie SaaS compares to the five issue I don't need to.
You can control.
Again, you can see that centimeter survival with eight months, which is almost unprecedented in the second line setting.
That has the S. Four that was 177.
That means also that day.
The effect.
There's no effect.
Any improvement on nominal improvement with additional SaaS imaging X gene.
Cool.
So.
Go to slide number Dan what we.
Clearly communicated previously.
Previously technology to the study did not meet the primary endpoint.
We saw a nominal improvement in the efficacy indicators with the addition of SaaS.
But not enough to make any subgroup is statistically significant.
We also have looked at the Bejon conducted as to which were <unk>.
Balance is that subsequent to enter.
Okay.
Ken actually buys out.
Hi, guys.
Importantly, also to Jacobs was generally wasted or did I did not see that.
Enhance the efficacy of the backbone chemotherapy.
We'll be presenting data.
Medical contracts.
So Greg just slide number 11.
Okay.
Addition to publicly communicated that they come on we have had series of.
Yeah of communications.
Chilton, India does please.
On the time.
And so far has been that the feedback has been very encouraging in the sense that.
The consistent feedback essentially.
Nominal improvements and trained and the survival in the IV nature can slashed permits Ian based approach.
It seems to be.
Really picking that tension.
Gi oncologists.
Certainly the appetite to look at.
Subsequent options for those patients.
And again, just looking overall in the study.
So it's become a cricket Australia, Nick Joseph They think they need to benchmark what would be expected in second line setting. So so there would be start to need additional work that we need to look into maybe in the future.
Is this biomarker.
The lack of activity.
And of course, we are currently looking at the full output, which.
You know could potentially give us additional insight on that as Doug spoke to try it.
So this is all about the typical on switching gears to.
I respect that you flagged them back 12 again, just a recap here was communicated this before this is.
And just to give them initiate trials in first line setting.
And just to get the already identified that maximum tolerated dose of tricks.
It does seem as though is as we are using in our Fas.
Our sponsor program. So that was good news for us.
The study is currently.
Good morning patients to expand the safety cohort two.
To update you in total in the study.
So are we.
So Richard the abstract.
Except it for them.
<unk> contributed vast squishy I in.
In January 'twenty, 'twenty, one that could be a poster presentation.
So they've just been connected cancers switching gear again too.
Their disease.
It took me negative breast cancer slide number 15.
As you know these studies being the ongoing recruiting patients in the background given what you mentioned just a few minutes ago.
One is strategic option.
We are now in the process of hosting.
Clothing additional patients in the trial, we win the deal.
This is our plan to be able to report the outcome of that patients enrolled in the study so far at sometime in the first half of 2022.
So then I'll ask you about looking at switching gears to.
The important program, which is the <unk> program to high prices there.
Bishop the condition.
And again just further to what she is just stupid.
This is a.
The basis for us.
No first points aren't trying to schedule to initiate the trial in patients who have been in a package that you're actually too.
Bush I took they can eat it.
My question is just on Costar.
Looking at this patient population, which continue to be an unmet medical need.
And so we would hope to have this study as a basis for our upcoming.
They are in United States.
Do you know already that there are two drugs approved.
He is a win as much as always.
And although you know going through supply shortage and of course. It then you're really up from dry days, which was of course some diamond.
A few months ago.
So the study is done off the triad was presented and you may recall at Ash 2020 last year.
Which should be sustained aspiration is activity and.
Good Tolerability and that's why we are still very excited about the site and its potential for our Danny.
So that brings me to my my friend on Slide 15.
Given what we obviously are working.
Clearly.
Around the clock to get our submission.
Our plan for the <unk> it would be based as I mentioned on the Nova study is supported by our sponsored programs. We have several strides already in and then.
As well as other drives that.
<unk> would like to achieve.
We have just started a communication with the agency since last year and will continue to have the communication, including our PBT meeting, which took place in June of this year.
And then subsequently we had the heart attack designation.
So.
If everything goes well I hope you can get.
We would hope to have our approval sometime.
Sometime in 'twenty to 'twenty two after.
For this indication.
Paused, our proposed deal with be it in patients who are at.
<unk> in combination with chemotherapy.
And in patients who have developed pipe prices dipped your actions to prior and especially of course. The thesis are proposed to be able to get all of it.
Up to the agency to decide twin leadership at this stage.
We are still having said that I couldn't be cases with the agencies. So once we've got the clearance from the FTE for the additional information that they have hopefully we'd be able to push that back and forth for decades. So.
So I'll stop here I am.
Sensor nodes to our chief financial operator after it got it. Thank you. Thank you everyone. Good morning.
Good afternoon, everyone.
Solving this updates on financial results for the first quarter of 'twenty, one by extending explaining that we will not be presenting a simplified P&L for Q3 this year.
Is that the release a few weeks ago. The tropical one phase three trial in pancreatic cancer because it did not meet its primary endpoint is considered a triggering event for what is called an impairment analysis that means that the company will need to test tangible and intangible assets for possible impairments in light of the new business.
Both prospects and until current uncertainties in both on business assumptions, all clarified, but particularly on partnership initiatives, we will not be in a position to announce full financial results for the third quarter of future.
In the next few months.
Of course conduct an impairment and that is just in light of the new business situations and definitely for the urine clothing, and thus may potentially lead to an impairment of some of the company's assets, but again too soon to tell and we will see in the light of the company's upcoming strategic developments.
Therefore, we are producing today the financial coming for this quarter, specifically on cash which is anyway. The most relevant financial information at this stage.
We're on slide 17 of the presentation.
As of September this year, <unk> had cash and cash equivalents totaling 58 million euro or approximately $43 9 million U S dollars.
Compared with $44 4 million Euro as of December 31 last year, and $46 3 million euros as of June 30. This year.
The $6 5 million decrease in cash position during the first nine months of 'twenty. One was the result of the $46 5 million net cash utilization in operating and investing activities.
And $38 8 million generated in financing activities why is that.
<unk> of the U S dollar against the Euro led to a $1 3 million euro positive currency Tianjin, but.
No doubt.
Note that financing activities in the first nine months of feature included $8 million placements in the U S through the Companys at the market with the ATM equity financing program for.
Net proceeds of $6 4 million Euro is 30 million U S. Dollar with just a direct offering for net proceeds of $22 4 million Euro.
And to drill down in 'twenty one.
A full tranches under the convertible notes the <unk> financing agreement for net proceeds of $11 4 million in Europe.
We believe that the company's current cash position confronts its planned operating expenses and current progress into the second quarter of 2022.
Further we are already engaged and cash preservation measures, which together with a potential further utilization of the peptide agreements of course subject to the regulatory that he made some 70% dilution.
Extend the company's cash horizon into the third quarter of 2022.
And finally, we are currently exploring financing and or partnering options with the goal to possibly further extend the cash horizon in 2022 beyond key development milestones.
Now before remind that reminding these key upcoming milestones I would like to take a minute to summarize our key strategic priorities going forward and we are on slide number 18.
The number one priority and Sheila has already commented on this the new situations is disappointing results or tried to kill one is hitting us now to focus our efforts on the ALLL business opportunity. This is for them to take a value opportunity in the short term.
The tapes are indeed, working around the clock to Cooper and find out if there'll be any duty and we expect to file our first BLA with the FDA around year end and we need of course to be a bit prudence on the time line here.
As always if you're subject to our interactions with the FDA and the completion of the remaining works to finalize the tool kit.
This is a short term value opportunities as we have been granted fast track designation in this indication and we therefore could potentially get approval in the second half of next year.
There is a high unmet medical need here and we believe it really starts with the safety and efficacy profile can have an important role to play in this indication.
Spend already this is the first in the U S, where we are more what's the best.
And where are the major part of the business opportunity is at this moment.
We will also take initiatives to consider the business opportunity in Europe, which however will be subject to the success of at least the first next steps in the U S.
Second priority is to advance or partnering initiatives.
Given the new situation with old platform no focus on CLO as our main short term business opportunity.
Given also our cash resources, we believe it makes better sense to join forces with a partner from the industry, especially to advance a potential commercial launch.
Yeah.
The process, although really started to review all strategic options. If you will is already leading initial discussions with risk context.
Our specialist adviser has been appointed already to assist and boost the process.
We expect these discussions will develop in the next few weeks and months and we will provide progress updates in due course.
And third preserving and possibly extending your bids or cash runway.
<unk> after the topline results with Tribeca, one we've taken first cost reduction.
Cash preservation measures by focusing our resources on immediate and key priorities only.
Strict budget discipline is key here and all precautionary measures have been taken.
We will explore also options for additional yet limited financing financing could also be with a partner.
To bridge or cash run way through expected key milestones in 2022, and more particularly again the potential BLA approval in the second.
Both next year.
Yeah.
No.
And finally and before we move to Q&A, a quick summary of our upcoming key milestones. This is slide number 19 of the presentation.
<unk>.
Starting of course with the BLA submission of aerospace in hypersensitive yellow again around year end 'twenty one this year.
And this submission could then lead to a potential approval of a real space in hyper sensitive in the second half of next year.
Then the presentation of the full data set of tried to kill them.
Medical meeting not decided yet.
It should be in the first half of next year top line results have been released a couple of weeks ago and as explained by EMA and when they are working on the detailed analysis of the full results.
Also the results of the phase one trial is called.
Called respect in first line pancreatic cancer also expected in the first half of next year. The MTBE has already been determined.
Those a scoping study and as explained this phase one trial is in a similar subgroup of patients of the one we had an interesting signal with <unk> to try to go on study so certainly worth exploring further at motor new costs.
Also data from the randomized phase two trial.
<unk> <unk> you might explain that with patient enrollment in this trial a sport of cash preservation measures, but we should be able to report data from the first patients in the first half of next year.
And finally, the updates on pulping process again, it's an ongoing process and we will provide an update as soon as appropriate.
With that I would like to thank you already for your attention and we'll now open the call for any questions. You may have as always pushing infringe all will come so there's almost no let's say some catholicos pursued approvals in place at all of it was that he gets multiple seats example, equals EBIT in Central Hall.
Operator, please open to you.
If you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
Withdraw your question press the pound key.
Again that is star then one if you'd like to ask a question at this time.
Our first question comes from Boris Becker with Cowen.
Or is it may be on mute.
Oh, sorry.
Just want to focus on the Alo market and I just wanted to get a sense of what do you say that the commercial opportunity for area space in U S and in Europe, and how do you think your pricing would compare to some of the other asparaginase is out there.
Yes.
Hi, Boris I'll I'll take that question.
So the opportunity we see in hypersensitive Halo for the patients who develop hypersensitivity to E coli asparaginase.
It's roughly a thousand patients.
Incidents of new patients per year in the U S.
Equivalent in Europe, a little bit higher in number of fishes in Europe, just linked to the population.
In terms of opportunity.
So in fact in this indication.
Until very recently, there was one product approved overnight.
And <unk>.
Peak sales before shortages started to come in it was roughly $200 million $200 million, which was.
I would think 80% to 85%, maybe even more into the U S and the rest of the rest of the world.
Now the market clearly would have could have been larger if that would not have been these supply constraints.
So early days now it's no longer.
Licensed in the U S. But there is no release filings.
That's right.
Similar market opportunity will be more expensive, mainly because it needs more injections.
And the organization.
So basically we are seeing here markets, yes, $200 million sort of a basis, but we think it can grow thanks to the new.
The release and shortage of supply.
Thanks, Thanks to vessels, so because our product profile may allow us to broaden the indication to patients that for example.
Like the adults, where it's been very difficult.
Go for it for the moment consolidated products and also we have our the way we will.
We will have a poster on this on the double allergic patients for patients with.
Although due to both the E coli derived.
I suspect maybe.
Could further small indication, but still it could further increase that market opportunity.
Our areas Pos has.
Clearly shown in the different trials that we have this good safety profile could activity profile.
We don't have presented here, but into the deck on the website, you'll find sort of.
<unk> trial comparison, where we showed it yes, we have clearly very comparable if not better results there.
We also have the advantage of leading only one injection every two weeks, where the overlays and violated every two or three days.
So we think the.
Our market share obviously, we believe that the overnight.
<unk>.
Probably maintain the dominant asparaginase in that segment, but still the market share of 25, 30% would lead to an opportunity in the.
70, <unk> hundred maybe more million dollars.
And what is important is that.
<unk>.
Pricing is relatively well established.
The overlays and the riders.
With a high price point in the market in fact, the month of treatment with <unk> with.
With dry lease we estimate.
Two costs.
Easily over 100000.
Could be much more for larger accretion.
For hotels about $100 per month.
So which.
Since we need two injections per month, you can sort of see what could be a potential pricing for us in that genetic mutation.
Great. Thank you very much for taking my question.
As far as.
As a reminder that is star then one if you'd like to ask a question at this time.
I'm not showing any further questions in queue at this time I'd like to turn the call back to Joe band for closing remarks.
Yes.
Thank you it was with one question.
Thank you all thanks for your.
Participation for your attention today, and obviously for your continued support of everything and as always we'll keep you posted on the progress showed the milestones are important catalysts to come. So we will keep you posted on the progress on all of these catalysts.
With this I wish you well.
Great rest of the day and look forward to speaking soon.
This concludes today's conference call. Thank you for participating you may now disconnect.
[music].
Hum.
Yes.
[music].
[music].
[music].
[music].