Q2 2021 Synthetic Biologics Inc Earnings Call
Good afternoon, and welcome to synthetic Biologics 2021 second quarter Investor Conference call.
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At this time I would like to turn the call over to Mr. Vincent Perrone director corporate communications at synthetic Biologics. Please go ahead Mr per run.
Thanks, Lexie and good afternoon, everyone welcome to synthetic biologics 2021 second quarter Investor Conference call today, I'm joined remotely by Stephen sales.
<unk>, Chief Executive and Chief Financial Officer, Dr. Michael <unk>, Senior Vice President of research and development and Dr. Vince Wager head of product and corporate development and.
And thank biologics issued a press release this afternoon, which provided operational highlights and reported our financial results for the quarter ended June 32021, the release can be found and the investors sections of our website at www dot synthetic biologics dot com during our call today, we will provide an operational.
Update on our Gi and microbiome focused clinical programs and summarize our financial results, we'll take questions. After our prepared remarks, and addition to the phone line. This call is being streamed live via webcast, which will also be archived on our website synthetic biologics dot com for 90 days.
During this call we will be making forward looking statements regarding synthetic biologics current expectations and projections about future events generally the forward looking statements can be identified by terminology such as may share.
Good expects anticipates intends plans believes estimates and similar expressions.
These statements are based upon current beliefs expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth and synthetic biologics filings with the SEC many of which are difficult to predict no forward looking statements can be guaranteed and actual results may differ materially from such statements. The information on this.
Call is provided only as of the date of this call and synthetic biologics undertakes no obligation to update any forward looking statements contained on this conference call on account of new information future events or otherwise, except as required by law with that said I'll now turn the call over to Steve Steve.
Thanks Vincent.
Good afternoon, everyone and thank you for joining our 2021 second quarter Investor Conference call.
I'm glad to be with you. This afternoon and look forward to sharing and important updates on our strategy per advancing our portfolio of Gi and microbiome focused clinical development programs during today's call.
I remain very encouraged about the progress we continue to make and advancing our clinical programs not only have we made significant progress on our clinical pipeline, but our balance sheet remains stronger than ever with nearly $74 million of cash on hand at the end of the quarter, providing us with more than sufficient capital.
And to advance our clinical programs through proof of concept and extend our operations into 2023.
Importantly by streamlining our capital structure early earlier in the year, we were able to regain listing compliance with the New York stock exchange during the second quarter.
Moreover, we've had a number of very exciting we have a number of very exciting upcoming catalysts that we believe will have the potential to deliver significant shareholder value spa.
Specifically, we look forward to commencing a second phase 1 multiple ascending dose clinical trial of <unk> and 'twenty during the third quarter of 2021 with top line data expected during the second quarter of 2022.
We also anticipate reporting data from the first antibiotic cohort of this and for phase <unk> clinical trial during the fourth quarter of 2021.
I'll discuss more about each of these in a moment, but as you can see.
We are in the midst of a very very exciting period for the company.
Turning now to the quarter.
And in 'twenty.
Ounce that patient enrollment dosing and evaluation was completed in the phase 1 open label single ascending dose clinical trial of Syn <unk> 20 per per.
Dietary formulation of intestinal alkaline phosphatase or IAP intended to treat celiac disease, and other systemic and Gi related diseases stemming from inflammation and the Gi tract.
Analysis of preliminary data demonstrated syn <unk> maintained a favorable safety profile and was well tolerated at all dose levels.
The second phase 1 multiple ascending dose clinical trial of <unk> and 'twenty is expected to commence during the third quarter of this year.
Importantly, both phase 1 studies are designed to support the development of <unk>, and 'twenty and multiple clinical indications, including celiac disease.
Turning to <unk> for.
Washington University continue to screen and enroll patients for our phase <unk> clinical trial, and allogeneic hematopoietic cell transplant or ACP.
<unk> for the prevention of acute graft versus host disease a.
The data readout for the first of 3 antibody cohort is anticipated during the fourth quarter of 2021.
As I've stated before we believe both <unk> and <unk> 'twenty may address very sizable and underserved markets that have the potential to be foundational long term value drivers for our company and our shareholders.
With that backdrop I'd like to provide a more detail update on our clinical development activities, beginning with syn <unk> or <unk> program.
<unk> is our first in class therapeutic intervention designed to protect the gut microbiome from antibiotic mediated <unk>.
We believe protection of the gut microbiome may play a pivotal role and improving health outcomes for patients administered long courses of intravenous beta lactam antibiotics as part of their treatment plan for bone marrow and solid organ transplantations.
Specifically allogeneic HCC patients have a very high risk of <unk>. Following long courses of IV beta lactam antibiotics used to treat fever after conditioning therapy.
And we believes and 4 has the potential to significantly improve outcomes for ALS and <unk> HCP.
<unk> recipients since damage to the gut microbiome by these antibiotics is strongly associated with a number of potentially fatal adverse outcomes, most notably acute graft versus host disease, vre colonization, bacteremia and C difficile infection.
Our outlook and supported by results from our previously completed phase II clinical trial listen and 4 in patients treated for pneumonia, which demonstrated that protection of the gut microbiome and treated patients led to significant reductions and the incidence of CDI and vre colonization.
We are currently.
Advancing this program and collaboration with our clinical development partner, The Washington University School of Medicine, and St. Louis and the form of a phase <unk> clinical trial.
The goal of this study is to evaluate the safety Tolerability and pharmacokinetics of <unk> and this fragile patient population.
Earlier, this year, we announced that enrollment and patient dosing had commenced and the first of 3 sequential antibiotic cohorts that will each be administered a different IV beta lactam antibiotic to treat fever.
We are pleased to report that at this time patient screening and enrollment is proceeding as expected.
And total 8 participants and each cohort will receive syn <unk> and 4 will receive placebo.
A data readout from the first antibiotic cohort is anticipated during the fourth quarter of this year.
Importantly, if we observe that.
We expect that since <unk> is not systemically absorbed and this first cohort will consider applying for orphan drug designation and begin to prepare for our phase III program as we complete the remainder of this clinical trial.
Next I'd like to provide and update on our Syn <unk> program that we're developing initially as a treatment for celiac disease, which has a significant unmet medical need.
Since <unk> is our proprietary recombinant form of bovine IAP produced and chose sales and formulated for oral delivery.
IAP is an endogenous enzyme expressed and the upper small intestine and that plays an important role and maintaining gut health through at least 3 important mechanisms.
First it diminishes Gi inflammation by detoxify inflammatory molecules.
Second it acts directly on the intestinal wall, the tightened to gut barrier to diminish leaky gut.
And third it functions to support a healthy gut microbiome.
We've used in 'twenty is a versatile multi indication platform program that has the potential to treat a number of clinical indications stemming from inflammation of the Gi tract.
In addition, we believes and 20 has the potential to diminish low grade systemic inflammation, which is believed to exacerbate metabolic syndrome and accelerate the progression of diseases associated with aging and.
And perhaps most important we've overcome the manufacturing hurdles, which have previously hindered the clinical and commercial development of IAP to treat these diseases.
We've previously outlined in detail our clinical development strategy for <unk>, 'twenty, which includes pursuing the treatment and prevention of affiliate diseases initial clinical indication.
Celiac disease affects approximately 1% and the U S population is characterized by and and tolerance to gluten.
Clinical manifestations include both gastrointestinal and systemic symptoms.
We believe <unk> and 'twenty is well suited to improve clinical outcomes when combined with the proper diet first by bolstering the gut barrier and 'twenty may block the initial step of gluten entry into the intestinal wall.
Second through its anti inflammatory activities and 20 may serve to attenuate the immune response to gluten peptides.
And finally per.
Patients with active celiac disease has been shown to have reduced levels of endogenous IAP, presumably because the disease damages the intestinal belie that normally produce IAP.
We believe syn <unk> and celiac patients would potentially.
Supplement and correct their low endogenous IAP levels.
Last June we initiated a phase 1 open label single ascending dose clinical study intended to evaluate safety tolerability and by a distribution of <unk> 20, and healthy adult volunteers.
During the second quarter, we announced that enrollment.
Patient dosing and evaluation had been completed in this study.
In total 60 healthy volunteers were enrolled in each of 4 cohorts within 'twenty given orally is single doses ranging from 5 milligrams to 150 milligrams.
Analysis of preliminary data demonstrated that <unk> maintained a favorable safety profile was well tolerated at all dose levels with no adverse events attributed to study drug.
And importantly, no serious adverse events were reported.
We expect additional data from this clinical trial later this year.
Planning for a second phase 1 study to evaluate multiple ascending doses of Syn <unk> is also underway.
And participant screening is anticipated to commence during the third quarter of 2021, however, initiation of the Mad study could be briefly delay due to lingering supply chain delays caused by the COVID-19 pandemic.
And if everything goes as planned a topline data readout of the phase 1 Mad study is anticipated during the second quarter of 2022.
Following the completion of the phase 1 safety studies, we anticipate conducting a placebo controlled phase Iia gluten challenge study and as many as 40 celiac patients who present with predominantly Gi symptoms.
Followed by a phase <unk> proof of concept clinical trial and a similar patient population.
Assuming successful completion of the phase 1 studies in healthy volunteers, the phase Iia study and celiac disease patients may begin as early as the second half of next year.
And as expected that these 2 studies will provide information on safety potential efficacy and therapeutic dose to support subsequent pivotal studies.
We may also seek to initiate clinical trials of <unk> and 'twenty to evaluate its therapeutic potential for non alcoholic fatty liver disease as well as for metabolic and inflammatory disorders associated with aging the latter of which are supported by our exclusive option license agreement with Massachusetts.
<unk> General Hospital.
We are excited about this versatile program and its potential to become a platform therapeutic for our company, we believe and <unk> will play a major role and delivering long term value to our shareholders, while targeting a large underserved markets, including celiac disease.
With that backdrop I'll review, our financial results for the second quarter ended June 32021.
Our balance sheet remains very strong and we are well capitalized to support our operations.
Foreseeable future as we reported approximately $74.3 million of cash on hand at the end of the second quarter.
Our strengthened financial position and current cash runway provides more than sufficient funding to achieve a number of major milestones, including the completion of ongoing phase <unk> clinical trial of Syn <unk> as well as the completion of clinical trials of <unk> and 'twenty through proof of.
<unk> and other key value drivers for the company.
Turning now to the second quarter financial resort results.
General and administrative expenses decreased by 2% to approximately $1.2.6 million for the 3 months ended June 32021 from approximately $1.2.9 million for the 3 months ended June 32022.
This decrease is primarily due to lower legal costs and vacation expense offset by higher insurance cost audit fees and registration fees.
Research and development expenses increased by 21% to approximately $1.9 million for the 3 months ended June 32021 from approximately $1.6 million for the 3 months ended June 32020.
This increase is primarily the result of increased clinical trial expenses as we began dosing patients and the phase <unk> clinical trial of <unk> and 4 and the phase 1 sad study.
And once that clinical study of Syn <unk>.
These costs were offset.
This increase and cost was offset by lower indirect program costs for the 3 months ended.
At June 32020, including salary and related.
Expenses reductions.
And a decrease and manufacturing costs per cent and 'twenty and market research.
To wrap up 2021 continues to be a very exciting year for synthetic biologics and we look forward to providing further updates as developments unfold.
Now I will turn the call back to Vincent to open the call for questions.
Thanks, Steve, Let's say wed like to open up the phone line for questions can you. Please describe the procedure for those online.
Thank you we will now begin the question and answer session.
To ask a question you May press Star then 1 on your telephone keypad, if youre using a speakerphone. Please pick up the handset before pressing the keys.
Your question. Please press Star then queue at this time, we will pause momentary.
Your line with symbol and roster.
Your first question comes from James Molloy with Alliance Global Partners. Please go ahead.
Hey, guys. Thanks for taking my question just a quick.
Checkup on Syn <unk> 60, IMD for CRE.
Is that still.
And where that stands and then I think on this hurdle and sets the ensign and sad study for 'twenty and that was from <unk>.
And in 2000 and that was.
24 was 6 zero.
I'm sorry, your first question, Jim is on and since 6.
Yes oral enzyme.
Sorry.
Right Vince you want to take that question first.
Yes.
6 and as I'll cover Panama is formidable and casino floor and that product is actually at the preclinical stage. The discussions we had around cinema and 6.4 and fundamentally directed to a potential.
Clinical trial that benefited markets, where CRA cobre, Panama is a standard cost side.
And that was predominantly in China.
Sales product.
That didn't.
And with the single and do they haven't gone ahead, given everything thats going on but also and I'll focus on our other assets to move them into the clinic.
<unk> is still in the preclinical stage.
Still and opportunity for CRE, but its been it hasnt advance.
And Jim just to follow up on that part of that as well.
We had to focus and obviously the priority was to advance.
Our 2 programs there.
<unk> are in the clinic as rapidly as possible. So that's.
And that's the position and we've taken and <unk>.
Probably when we do our strategy review near the end of the year, we'll take a look at it and figure out if there's a place for it on a go forward basis, if we had an opportunity to partner that that compound with somebody we'd certainly consider advancing it that way.
Okay understood and just through focus on the near term and if you can and partners has there been any movement.
And then to speak to on to the partners for <unk> 4 for C. Diff.
Nothing nothing at this point and again the strategy there is to continue to develop additional clinical data.
And I think once once we get finished with this ongoing trial and acute graft versus host disease will have additional data on and C. Diff prevention as well as.
Perhaps to prevention of vre and.
And I think we'll have more to talk about with potential interested parties on that.
Understood and then last question on <unk>.
4.4.
4.
<unk> HCC.
The phase 1 first cohort data do you expect the fourth quarter, we would anticipate sort of.
The final also enroll cohort data.
And sort of a final presentation of complete the complete data set.
So when when we discussed the design of the trial with the team at Washington University. It was anticipated that the total trial will take about 18 months long.
As of today, we are on target with where we expected to be in terms of enrollment.
We will do and evaluation of that data at the end of the year and.
And there are some discussions on how we may.
Speed up the trial.
But <unk>.
Right now the best guidance, we can give you is that.
From start to finish it should be about 18 months.
Excellent. Thank you very much for taking the questions.
Thank you. Your next question comes from Jason Mccarthy with Maxim Group.
Please go ahead.
Hey, guys and Michael <unk> on the line for Jason Thanks for taking the question.
And Mike.
So I wanted to ask you for the phase <unk> and specifically that data read out that you have coming ahead in the fourth quarter and is expected to provide the absorption data and not and efficacy readout per se.
And so it would be proof of concept for the Gi restriction of buyback debate could that be viewed as a derisking event for when you actually proceed into beta lactam.
Yes.
Yes, and in fact.
Yes sure.
And.
And as you know.
The study was set up to do exactly that and take the lowest risk antibiotic for the for this trial, which was in our opinion and because thats not broken down by Rob maximize and use that as a way of looking at a patient population who are receiving full but we will have had the transplant is intestinal tract is probably.
Damage from the.
And from the chemo and the radiation and just looking to see if we can if we get any absorption and that circumstance and so what we will be on a daily and looking forward is exactly what you said that we see low to <unk> and these patients and that will definitely make it and give us a great deal more content moving into the next population where right.
And <unk> can degrade in Brazil and <unk>.
Okay.
Alright, Thank you and.
I wanted to follow up on that without getting.
Too presumptuous from looking too far ahead.
What would be what would be the next steps. After this 1 be 2 after you've.
Scott and that proof of concept.
And to say that.
And exactly what we said it does it breaks down the beta lactam and they got.
Protect the microbiome, but doesn't impact the efficacy of the antibiotics, where would you go from there would it be.
Would you be moving into something like a phase II could you jump straight into a phase 3.
And do you have any indication.
And what you would need to get this to approval after the phase <unk>.
So the way we're looking at it is is basically by comparison and so all the other products.
And in this space.
And what we would hope for and this obviously is completely and double underline and big bold letters and discussion to be had with the FDA sales to make sure that they are on board, but we would like to get FDA agreement that we can move straight into a pivotal trial.
And in prevention of Gvhd and with end points are related also it wasn't that secondary or primary related to.
And CDI and back to Amy I've said that looking at that.
As many of these endpoints as a feasible to support the use of the snow and unfold.
But there's probably not a lot of reasons and do an interim phase II study and let's say it was a safety signal and we don't anticipate that there will be we would really like to get to the FDA and have a discussion about going forward into a pivotal trial and ideally some form of both.
Designation and whether that's an open and this would certainly qualify based on the number of patients well somehow the designation that facilitates moving forward into a clinical trial, but again and I can't emphasize this enough until we have to adopt and we havent had that conversation with the FDA and we need to have that conversation with them, but that would be our jail.
Yes of course, thank you very much and then I.
I guess, just 1 more from me I wanted to ask it.
The emergence of the delta variant across much of the country, particularly in.
And the sales.
Do you have any indication from Washington University as to whether there is any increased risk right now although delay to the ongoing study.
So if I haven't said that there is an increased risk of delays the ongoing study.
And I don't think we saw and then isn't to St. Louis was putting back and some modest mandates and things like that but by and large Washington University and assortment cancer center and have implemented their own strategies and as far as dealing with COVID-19 and preventing the dissemination of Covid, which I.
From there and that happens to pay and they will continue with those processes and implement those to ensure that.
Charles around slightly and the hospital is around cycling I think the patient population and we're in a time decide to put off.
Transplant and so while I think there may be more.
Changes to their ability to do things and a certain timeframe.
And Don indicated to us that there is a growth.
Inhibition of <unk> ability to get patients into the study or a slowing up their ability to do clinical trials.
Alright, Thank you very much for taking my questions.
Thank you.
We have reached our allocated time for the question and answer session I would now like to turn the conference back over to Mr. Steve Shallcross for any closing remarks.
Thanks Lindsay.
In closing I'd, just like to say that we're just very very happy with our progress and I Hope you see that we remain very very focused and executing our strategy.
<unk>.
And the more I see the progress before us I'm more confident than ever and the outlook of our business and believe that with the financial strength that we currently have advancing these clinical programs.
And to unlock the value and generate the long term growth for our shareholders.
And is clearly in my opinion on the horizon.
I am very proud of the progress we've made and even more excited about what lies ahead for us I'd like to thank our team here at synthetic for their tireless efforts to advance these programs and our shareholders for their ongoing support and again, we look forward to keeping you updated on our progress.
Have a great weekend.
Okay.
The conference has now concluded.
You for attending today's presentation you may now disconnect.
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Yes.
And.
And then.
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