Q1 2022 Beyond Air Inc Earnings Call
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Good afternoon, and welcome everyone to the beyond Air financial results call for the first fiscal quarter of 2020..2 financial results ended June 32021. At this time participants are in a listen only mode. A question and answer session will follow the formal presentation and.
And now I would like to turn the call over to Maria and coffee head of Investor Relations at beyond the ear. Please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining us today after market close we issued a press release announcing the first fiscal quarter of 2020.2 operational highlights and financial results a copy of the press release can be found and the Investor Relations page of our website.
Before we begin I would like to remind everyone that we will be making comments and various remarks about future expectations plans and prospects, which constitute forward looking statements for purposes of the safe Harbor provisions under the private Securities Litigation Reform Act of 1995 beyond Air cautions that these forward looking statements are subject to.
Risks and uncertainties that could cause actual results to differ materially from those indicated we encourage everyone to review the company's filings with the Securities and Exchange Commission, including without limitation. The company's form 10-K, which identifies specific factors that may cause actual results or events to differ materially from those described and the forward.
The statements.
Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website www dot beyond their dot net. Furthermore, the contents of the conference call contains time sensitive information that is accurate only as of the day of the live broadcast August 10, 2021 beyond the air undertakes no obligation to Reeves.
Pfizer update any statements to reflect events or circumstances. After the date of the call.
Joining me on today's call are Steve <unk>, our chairman and Chief Executive Officer, Duncan Fac, and our Chief commercial Officer, and Douglas Beck, Our Chief Financial Officer, but that I will turn the call over to Steve Lisi, Our C E O D.
Yeah.
Thanks, Maria and good afternoon, everyone and thank you for joining us today.
For today's call, we will provide a brief overview of recent business highlights and preview of upcoming milestones across our development pipeline.
And we'll start by providing an update on the company's progress before handing the call over to our Chief commercial officer Duncan back and to discuss the commercial launch preparations and greater detail.
This will be followed by our Chief Financial Officer, Doug Beck, who will provide a review of our financial results and then we'll open up the call for your questions.
Let me start by saying that the entire beyond their team continues to execute on our strategy and we remain on track with the timelines that we outlined during our public called for the June 10th for the fiscal 2021 results.
As you all know we are awaiting FDA approval of our pending PMA application for the lung <unk> ph system to treat persistent pulmonary hypertension of the newborn for P. P. H N.
Lung for ph is designed to offer hospitals of simple safe cost effective and convenient alternative to products that are currently available.
We continue to have the collaborative rapport with FDA and anticipate approval at the end of the third quarter of calendar 2020, 1 with the <unk>.
Subsequent commercial launch and the fourth quarter.
As you prepare for the potential commercial launch of lung for ph. We are excited by the opportunity to disrupt this market and create the future of Tankless inhaled nitric oxide delivery system and Nic use across the United States and eventually globally.
I'll, let Duncan and discuss the specifics of this commercial planning and a moment.
Let me turn to the progress we have made and our other ongoing programs and restate timing expectations.
Starting with our viral lung infection program, which uses the lung fifth pro system at 150 parts per million of nitric oxide to treat the acute viral pneumonia in adults and bronchiolitis and children under 2 years of age.
In May we showed interim data from 19 patients from our acute viral pneumonia pallet study in adult all of which will COVID-19 patients at.
At the American Thoracic Society International Conference for <unk> 'twenty 'twenty 1.
Ported that 150 parts per million and administered using lung fit pro was safe and well tolerated. We also observed positive efficacy trends for clinically meaningful endpoints, including a 2 day mean reduction auction and sport and N O treated patients versus the control for.
The 26 of our reduction in the mean duration of hospital stay between the N O treatment group and control and.
And only 22 per cent of subjects and the I know it treated group required oxygen and sports beyond the hospitalization compared to <unk> 40 per cent of control subjects.
This midst of review was encouraging, especially since the trends echo of the results of the 3 previous bronchiolitis, probably trials and we conducted.
Today Trumps has remained open for the study we plan on submitting additional detailed study results out of future scientific meeting.
Once this powertrain of US complete our plan is to submit the entirety of the data out of the hunting and fishing and around 60 parts per million and O and both hospitalized adult and infant viral pneumonia patient populations as 1 comprehensive data package to the FDA.
And we'd like to move to a pivotal all comer trial for a lumpy pro and patients hospitalized for acute viral pneumonia and.
And anticipate starting this study and the fourth quarter of calendar year 2022, the Chi.
And of which is due to the seasonality of most respiratory viruses.
Moving onto our ongoing non tuberculosis mycobacteria or N T. I'm proud of study we began screening patients for a lumpy go program and MTN and December 2020 are on track to report interim data at the conference in the fall of 'twenty 'twenty 1.
The topline results coming later in the second quarter of calendar year, 2020.2.
We are pleased with performance of month ago, especially since this is the first device designed for cell treatments by patients and the home setting and this indication and.
This is the first study that is using up the 250 parts per million of nitric oxide and treat patients with doctor of lung infections.
Enrollment is going well and we anticipate completion in the fourth quarter.
The of calendar 'twenty 'twenty 1.
As a reminder, patients received for a 40 minute treatments per day for 2 weeks and then to 40 minute treatments for 10 weeks with more than 11 weeks of self administration and home.
There was a 12 week observation period after treatment is completed.
If this trial is successful we believe our lungs that go system will be a game changer for the home setting.
And we could potentially target chronic severe lung infections with various underlying conditions, such as just the fibrosis bronchiectasis and of course COPD.
Turning now to our solid tumor program.
The call. This program exists outside of the lungs, the platform due to the ultra high concentrations of nitric oxide and the necessary to achieve anti tumor effects.
And as I stated in June we are rapidly approaching submission to regulatory authorities to enter human studies.
Our goal is to receive regulatory approval to move into humans on the end of calendar year, 2020, 1 and subsequently began recruiting patients for the first quarter of calendar year 'twenty 'twenty 2.
Yeah of presented data at several conferences in 2020, and and is available on our website and.
Encourage all of you to take the time to review these data and if you can't I'll provide you with the key cliffsnotes nitric oxide as a mono therapy can be tumor immunity each of the host after a single 5 minutes and local administration of 50000 parts per million using beyond dance proprietary delivery system and 11 of 11 months.
But we are highly encouraged by the results from the Belgium and program alongside the platform remains the focus of beyond there.
Resources needed to bring up the solid tumor program for a first in human study are not impacting on 1 of the programs.
We will constantly assess this balance to ensure that we are taking the best path forward for investor return, while maintaining our focus on patient benefit.
With that I will now turn the call over to our Chief commercial Officer Duncan back and for the review of our commercial plant Dunkin'.
Thanks, Steve and good afternoon to our investors.
I'm pleased to report the we are right on track and our preparations for the lung.
Launch and we are of course extremely excited to present a solution if approved for the many hospitals that have been patiently waiting.
As Steve has previously mentioned we are preparing for a limited release phase for the first 6 to 9 months post launch.
Although nitric oxide has been used as standard of care for PPA chat for the past 21 years old.
Rationale is that our generator is of novel device, the will require appropriate training and support for hospitals and stuff.
We recognize the important role the respiratory therapist or a ts plenty in the earn out of space.
These providers are the ones directly responsible for administering an inhaled therapy.
Severely ill patients and they will be the ones using our device.
As such you can think of all the Ts as the champions or gatekeepers of N O devices being adopted by hospitals.
We have carefully designed a loan for ph as the user interface.
Suicide and easy transition from any prior device, but the north sea is familiar with.
Our team will work closely with these providers to ensure that we have optimized our logistics and customer service and product performance and the first limited release phase.
So the we have confidence and our ability to scale up to meet the needs of a much broader range of customers in the plan the second phase of our commercialization strategy.
Our strategy for the initial phase will be to target for a select number of hospitals that have the level 3 level for the makers and staff experienced with inhaled nitric oxide.
These initial hospitals will not necessarily require and abundance of devices upfront. However.
However, they will have a sufficient volume of bandwidth per month to provide a rigorous test for lung trip the age and the beyond debt team.
Also we are acutely aware the hospitals are currently and the annual or multi year contracts for end of.
Because of that we will be targeting the hospitals with less than 12 months left on their existing contracts.
And we anticipated taken about for years.
Have a show and said every hospital the use is N O in the United States.
Remember went under a monopoly there and other market with north of $550 million run rate and the U S, which we believe has since come into about $350 million.
This includes the 850 or so the level 3 and 4 of nutrients in the United States, but use the NOL for PPA Chad.
And the off label usage, mostly and cardiac surgeries, but it accounts for about 80% of N O us.
I want to make it clear our initial patients will be newborns diagnosed with persistent pulmonary hypertension.
Due to the many advantages of the lung 58 system we.
We do not plan on competing on price.
In fact, our systems and the lack of reliance on the heavy cylinders or cumbersome cartridges and allows.
Alaska for the removal of the burdensome and inventory storage and disposal of requirements that are necessary for the products offered by our competitors.
We are also able to reduce the training burden by avoiding purge and procedures.
Reducing the likelihood of physical injury to health care workers, which poses many economic savings for the hospital.
We will be charging on and I only basis similar to the ceiling the players.
And are encrypted 12 of our smart filter and.
To ensure the safety protect style of business model and leads to a predictable and steady revenue stream of consumables.
The commercial team has been working diligently to prep for our anticipated launch this year.
Let me talk more specifically about the main areas of immediate focus.
Firstly I want to highlight the way the already has all the preapproval launch day and in place and have identified candidates for the extended team and we plan to recoup once approval is obtained.
We have numerous ought to use on the staff and experienced leaders to run out of sales marketing and ex U S partnership efforts.
Secondly, our supply chain preparation is well advanced and go and according to plan.
And preparation for FDA approval, we will have all of the loan for ph systems, and accessories, and we need and our service and support resources are in place.
Lastly, we are finalizing our marketing plan.
Of course, we are not yet approved and so there is no promotional activity occurring.
However, we have continued to refine our market and materials messaging and business model based on conversations with the many potential customers that have reached out to us for information on lunch with ph.
The first major conference following the expected timeline for FDA approval is the a C or American association for respiratory care and Phoenix in early November.
And so we are targeting that meet and is the first introduction of lung for ph for the world.
We will provide more detail of our plans for both of the specific conference and our broader marketing plan as we get closer to that time.
In summary, we're really pleased with our progress and we'll be ready for launch as soon as we receive FDA approval.
And beyond that of vision is the harnessed the power of nitric oxide and.
Access empower healthcare providers and transform more lives and more waves.
We're excited to bring the groundbreaking long fifth th nitric oxide generate the and delivery system. So the.
The U S market and the world once approved so.
We can start to turn that vision into reality.
Thank you and I'll now turn the call over to the dog for the full financial review.
Doug.
Thanks, Duncan Here's a brief review of our financial results for the first fiscal quarter of 2022, which ended on June 30th 'twenty 'twenty 1.
Revenue for the first quarter ended June 30 of 2021 with zero as compared to 229000 and for the fiscal quarter ended June 30th 2020 all of which was the licensing revenue.
Research and development expenses for the fiscal quarter ended June 30th 2021 were $2.7 million compared to $4.3 million for the first for the fiscal quarter ended June 30th 2020.
General and administrative expenses for the fiscal quarter ended June 30 of 2021 with $3.9 million compared to $2.5 million for the fiscal quarter ended June 30th 'twenty 'twenty.
The company had a net loss for the fiscal quarter ended June 30th 2021 of $6.7 million for 31 cents per share cash.
Impaired for a net loss of $6.7 million or <unk> 41 per share for the fiscal quarter ended June 30 of the 'twenty 'twenty.
As of June 30th 2021 the company had cash cash equivalents and restricted cash of $39.6 million.
We believe that this cash is sufficient to fund operations well beyond the next 12 months, including the initial U S commercial launch phase of lung fifth P. H.
And I'll hand, it back to Steve.
Thanks, Doug operator, we're ready for Q&A.
Yeah.
And at this time and we will be conducting a question and answer session. If you'd like to ask the question. Please press star 1 on your telephone keypad and confirmation tone will indicate your line is and the question queue you.
You May press Star 2 if you like to remove your question from the queue for participants using speaker equipment and it may be necessary to pick up and your handset before pressing the star of keys.
1 moment, please while we poll for questions.
And our first question is from Greg Fraser with Jewish. Please proceed with your question.
Hey, good afternoon guys.
I've never heard of the FDA and review the timelines and cash you mentioned the collaborative rapport with the agency and I think.
Surprising from up and there have you or have you got any questions that were outside of what you and the team of expected or has it been pretty straightforward and so far.
And Greg Thanks for the question appreciate it spend.
It's been pretty straightforward remember that the hour.
Our team of engineers for the guys who.
Who designed and built and did all the the work to get approval of the first ever system called the on event and several.
Versions after the out of band, which is the IMAX D. S. A R.
And so they've been doing nitric oxide since the early mid nineties. So nothing in this space really.
Really surprises that team.
Got it and have you and especially in a box and has been checked yet or is that the telecom.
I'm, sorry share that against the inspection boxes.
The check the box and checkout inspections and the inspections happened.
No the inspections happening and you usually they're they're they're right at the end.
Yep Okay.
And then.
Amongst the trial, how has your thinking evolved on which path to pursue it and has between ABB and <unk> Brasil bias with you know of Covid cases ramping up in the absence of October Germain of problems for some time the neither he and his clear, but you know on the other hand of RSV cases of ramping up and the big way and RSV, you will probably always be a problem, but I'm just I'm curious where you see at this point the most.
And unmet need and opportunity.
Well, it's it's a great question because I can go out of the way I mean, we Wanna say of the babies. So that's really where you want to do but.
But it seems like the the.
The pandemic is never ending and.
And really the people who are suffering there of the other adults and the other way so.
I think that we're going to take a look at the full package, we have and obviously, we have data from from both bronchiolitis and and pneumonia as well as our preclinical data and some of the work. We're doing so we will make a decision in the next few months, which way we're going to go and.
Think the the direction, we're going to go and obviously dictated by our dataset.
And it's gonna be what we believe we can get the.
Yeah agreement with FDA on to move forward into a pivotal study and that's the most important things to move forward with 1 of them if we if.
If we try to go with 1 that's you know not as strong in terms of the data set because maybe its a big of market or what have you then and that that would be a mistake for and a part and so we're gonna pick the 1 that we think has the best chance of.
Getting agreement with FDA and the pivotal trial design and the moving forward and the fourth quarter of of calendar 'twenty 2.
We just don't know yet and we're still gathering all of them.
Understood. Thanks for taking the questions.
Thanks, Greg.
Yeah.
And our next question is from Suraj Kalia with Oppenheimer. Please proceed with your question.
Good afternoon, everyone can you hear me all right.
Yes, we can't rush.
So Steve.
And if the PMA approval for P. P of churn is let's say by end of this month for the first of September.
Is it fair to say that the labeling discussions have already happened.
Well I don't think it's the approvals coming at the end of August I think we've been saying September.
So I wouldn't I wouldn't.
I wouldn't change that viewpoint and anyway I would still look at the end of September is the timing.
And I think that.
With respect to the label and.
There's there's no ambiguity on the label and in our opinion I mean, the label is what's out there now I think all 3.
3 U S. Players right now has the exact same label. So I don't think there's going to be any difference here, 1 way or the other on the label I think it's pretty well known and there's no.
I think from our side that would that would change that.
But how have you on the pad.
Labeling discussions with the FDA.
No.
Okay.
Not much shorts and.
And at this moment in time to have that those discussions anyway.
1 of the question for Duncan Duncan you mentioned 815, and the Qs and if I heard you correctly about are for your ramp.
And please correct me if I'm wrong so.
Help me help us understand the cadence of <unk>.
Targeting you know if the parade of rule still applies in this case and.
And how you're thinking about targeting sort of you know so that we have some goalposts. We can look at you know as post approval and then the after commercial launch. Thank you for taking my questions.
Yes, and no problems right so to be clear of what I mentioned is the the contracts are typically around 1 to 3 years and so within 4 years, we expect to have gone through or had the opportunity talking to any hospital and the U S about the contracts it wasn't a reflection of a specific time.
And but it will take for us to get the ramp.
As far as the phases concerned.
We've been clear that we're going to focus and the first 6 to 9 months on something around up to a dozen.
Locations of hospitals, and we're going to focus on the customer service logistics and service and maintenance questions that you would expect that the iron out before guidance and the next phase the.
The timing of that ramp up and the speed with which we.
Increase our organization and and revenue it remains to be seen because we're obviously going to be dealing with.
All of the questions that come back and we think it's going to be fast, but I can't tell you exactly what those specific metrics that can be at this time.
Thank you.
Yeah.
And just as a quick reminder, if you have any questions. You May press star 1 on your telephone keypad doing so and having joined the queue. Our next question is from Matt Kaplan with Ladenburg. Please proceed with your question.
Hi, good afternoon guys.
I guess first you know as you're nearing your first approval with long fit pro can you talk about what your strategy is for potential globally, expanding the label for lung and fit for the long set ph of sharp not long term profit month of th after approval.
We will we will give you that nice save them at alright.
[laughter], Oh, Oh the age.
Yeah, I'll, let Scott talk about the label expansion. Thank you for sure.
Yeah. So as soon as we get our approval we are going to.
For for the expanded indication for the Kodiak, So the test could take.
Obviously, there's a range of times, there's no. Many thanks, but certainly the middle of next year is when we would expect to get that that expansion and it's really a free.
The straightforward piece of work from our perspective so.
It doesn't require any additional clinical work et cetera. So it's just the dossier and we'll submit that soon and to get.
Get the initial approval.
Great and and maybe Duncan and for you can you talk a little bit about the the business model.
For lung for ph, and how and how to think about kind of the razor and the razor blades and and the sales of a poll.
Yeah.
Yeah, and I appreciate that so I don't want of getting into too much detail about it because obviously, it's a competitive advantage for us to kind of keep that fairly close to our chest.
But I will say that we do have the.
The smart filter that I mentioned, it's a 12 hour.
Timestamp, if you like and that allows us to.
Measure how much people are using our system and the answer.
And it gives us a lot of flexibility. So we're going to focus on the simplicity of our system and the flexibility of the business model. There are a number of different ways. We can approach. This and we think people will really appreciate it Brian.
And the not expect and to have to compete on price and more focus on the broader value proposition, which is around eliminated and the cylinders optimized and the workflow and ultimately increase and access to nitric oxide, which is what we're trying to deliver for this hospital.
Okay very good thanks fair enough and then let Steve and for the ones that go N P. M program.
Can you tell us a little bit about what you expect kind of look for in the interim data that's coming in and the fourth quarter from the ongoing study.
Sure.
I think we will will be the bacterial load data won't be available and I think that's the 1 thing that won't be there.
And that interim.
But you know and quality of life physical function and safety and Tolerability.
All of those data points will be reported on.
You know I think it's important to also.
Note the concentration that the patients are on.
The start them and 150 parts per million and and we try to titrate them from $1.50 to 200, and then to 250 and obviously you know the more patients on $2.50, the better I think that's really what we're looking at from the from the early day. So the.
Remember that just as a reminder of these patients are.
And treating themselves at home.
With our lungs ecosystem.
And for a little more than 11 weeks first couple of days, which would obviously be.
Training and titration phase at the hospital.
Okay. That's that's helpful. Thank you and then last question in terms of your I guess kind of under recognized program here and your oncology solid tumor.
Hi culture of high concentration and all program can you give us a little bit more color in terms of what you're thinking of in terms of the first clinical study that you're the on track to the launch I guess late this year and early next year.
Yeah I mean this this this first.
Phase 1 study and it will be 2 steps you know phase 1 of <unk> no different than most other companies here.
The first 1 will be.
And I don't want to say, all comers, but it'll be multiple types of solid tumors, we'll be looking for safety.
I think thats important thing and this first piece of the phase 1 study.
So.
That's.
That's really it you know can we deliver the safely in humans as we've done the in roads.
They're obviously, Matt as you know what we'll be looking at several biomarkers to be sure that there are all of it.
And at least the hints of efficacy the we expect to see and and those in the.
And that first study with these biomarkers, but again it would be more of the phase 1 b.
The study that would be a habit of direct and point of efficacy, but we'll get some good bye.
Biomarker data and that first study for sure.
Alright, great. Thanks.
Thanks for taking the questions.
Thanks, Matt.
Yeah.
And our next question is from Yale Jen with Laidlaw and company. Please proceed with your question.
Good afternoon, Steve and thanks for taking the question. So just the 2 quick ones. The first 1 is for the long and fits probe.
Ah study.
Do you have any non COVID-19 patients so far in the study.
Hey, Joe how are you so in the current ammonia study.
Of all of the patients to date are sort of scobey 2 of our COVID-19 patients.
Okay.
And maybe just another follow up question that given that you feel comfortable with that day that.
The approval may come about.
And of the September the.
And the Liberty, referring back to the earlier question that the whether you already have the.
Inspection day debt, you'll have that or are you just still to be determined.
Yeah, and I wish you FDA would give us a nice couple of months lead time, and when they're coming in to inspect us but usually there.
And I'm always too.
And just kind of call you up and say Hey, we'll come and come in next week or something so it's usually.
A very short notice if they're coming so.
It's not.
And at least and my experience and my team's experience and that's something that set up well in advance. So the direct answer to your question is no they're not scheduled yet but I.
I wouldn't expect it to be scheduled at this moment in time.
I'd say, it's going to be a couple of more weeks before they make the phone call to us.
Okay, great, Thanks, and again congrats.
Gotta, reaching the table and you outlined the probably go beyond the very soon.
Thanks, Yeah.
And we have reached the end of the question and answer session I'll now turn the call over to the management for any closing remarks.
Thanks, everybody for taking the time today.
And we'll talk to you next quarter. Thank you.
This concludes today's conference and you may disconnect your lines at this time.
Thank you for your participation.
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Yeah.
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Okay.
Yes.