Q2 2021 Caladrius Biosciences Inc Earnings Call
[music].
Please standby.
Welcome to collateral Biosciences second quarter, 'twenty, 'twenty, 1 financial results and business update conference call.
Currently all participants are in listen only mode. Following management's prepared remarks, we will hold a Q&A session to ask a question at that time. Please press the star key followed by 1 on your Touchtone phone. If anyone has difficulty hearing the conference call. Please press star zero for operator assistance.
As a reminder, this call is being recorded today Thursday August 5th 2021 I will now turn the call over to John Mindy do Vice President of Investor Relations and corporate communications at collateral.
Please go ahead Sir.
Thank you operator, and good afternoon, everyone. Welcome to <unk> second quarter 2021 conference call to discuss our financial results and provide a business update.
Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer, and James <unk>, Vice President Finance and Treasury.
Earlier today, we issued a press release announcing our second quarter 2021 financial results.
Which is available under the investors and news section of the company website.
Along with the webcast replay of this call. If you have not received this news release or if you'd like to be added to the Companys distribution list. Please email me at Jay Mindy do at collateral Dot com.
Before we begin I remind you that comments made by management. During this conference call will contain forward looking statements that involve risks and uncertainties regarding the operations and future results of <unk>.
Encourage you to review the Companys filings with the Securities and Exchange Commission, including without limitation. Its forms 10-K, 10-Q, and 8-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statements.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast Thursday August 5.2021 collateral Biosciences undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call.
Please keep in mind that the company continues to conduct calls from different locations. During the COVID-19 pandemic. So we appreciate your patience should we have any technical difficulties with that I'll now turn the call over to Dr. Mazzo Dave.
Thank you John and good afternoon, everyone I hope that you're all well and people are experiencing the adding of the COVID-19 pandemic and any effects that it may have had on you or your family.
For joining us on our call today to discuss our second quarter 2021 financial results and recent business highlights.
The second quarter and first 6 months of 2021, we've continued to advance our clinical development programs and strengthen our financial position, which we believe gives us the means to fund our operations for the next several years based on our current development plan, while also allowing us to explore additional pipeline expansion opportunities.
Notably we delivered on a number of strategic priorities.
In support of our autologous <unk> 4 cell technology based clinical pipeline about which I will further discuss following the prepared remarks, covering the financial results and with that I will now turn the call over to James <unk>, Our Vice President of Finance and Treasury, who will review and provide commentary on our quarterly financial results.
James.
Thanks, Dave and good afternoon, everyone I'm pleased to join you today and provide a review of our first quarter financial results, starting with our operating expenses.
Research and development expenses for the 3 months ended June 32021 were $4.3 million compared to $1.8 million for the 3 months ended June 32020.
Research and development in the current year period focused on the advancement of our ischemic repair platform and related to <unk>.
Expenses associated with efforts to advance C. L. B F 16, and the phase II B Freedom trial, which now has multiple sites actively screening and enrolling patients and.
Expenses associated with the planning and preparation of an eye on D and proof of concept protocol for <unk> 201, as a treatment for diabetic kidney disease and.
Ongoing expenses for Han address and critical limb ischemia and burgers disease in Japan for which we continue to focus spending on patient enrollment and Japanese rolling NDA preparation.
General and administrative expenses, which focus on general corporate related activities were $2.8 million for the 3 months ended June 32021, compared to $2.5 million for the 3 months ended June 32020.
Representing an increase of 14% as a result of an increase in directors and officers insurance premiums as experienced throughout our industry and strategic consulting expenses.
Overall net losses were $5.7 million for the 3 months ended June 32021, compared to net income of $6.6 million for the 3 months ended June 30th 2020.
Turning now to our balance sheet on cash flow.
As previously announced in January 2021, we successfully closed on a $25 million capital raised through the sale of the company's common stock and warrants to several institutional and accredited investors and a private placement price at the market under NASDAQ rules.
Shortly thereafter in February 2021, the company announced that it closed a $65 million capital raised through the sale of its common stock and warrants to several institutional and accredited investors and 2 registered direct offering priced at the market under NASDAQ rules.
In addition in May 2021 we announced that we received a $1.4 million and non dilutive funding as an approved participant of the technology business tax certificate transfer program sponsored by the New Jersey Economic development Authority.
The program enables qualifying new Jersey, based biotechnology or technology companies to sell a percentage of their new Jersey, net operating losses, and research and development tax credits to unrelated qualifying corporations.
Even at the tail end of the COVID-19 pandemic, while many small biopharma companies continue to experience difficulties and competed for capital, we successfully and Opportunistically secured $90 million in new capital gross proceeds year to date in 2021.
These resources have afforded us the financial security to focus on the execution of our business plan.
As of June 32021, collateral had cash cash equivalents and marketable securities of approximately $106.1 million.
Based on existing programs on projections, we remain confident that the current cash balances will fund operations for the next several years, notably through the study for the for study completion for the phase 2 B freedom trial of <unk> 16.
Through the registration eligible study completion for hone address.
And through the phase 2 proof of concept study for <unk> hundred 1.
While still providing capital to explore additional pipeline expansion opportunities.
That completes the financial overview with that I will turn the call back to Dave.
Thanks James.
It's been my habit on previous calls I will begin by providing a high level summary of what we are doing at collagenase and then further expand on each of our clinical program.
At <unk>, we are focused on the development of autologous cellular therapies designed to reverse disease. We have late stage clinical programs underway based on a large database of human clinical data.
Our therapies have shown signs of effectiveness and durability with a positive safety profile. Unlike many allogeneic therapies and we believe.
Present, the possibility of substantial clinical economic benefit.
Most importantly, we remain focused on the development of personalized curative cell therapy products that can restore human health and improved quality of life with a single administration of the therapy, rather than 1 that requires frequent re administration.
Our CD 34 cell therapy technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia, a condition in which the supply of oxygenated blood to healthy tissue is restricted.
Previously published preclinical and human clinical studies have demonstrated that administration of CD 34 positive cells induces angiogenesis of the micro vasculature that is these sales prompt the development of new blood capillaries, thereby contributing to the prevention of tissue death by facilitating blood flow.
To the area of ischemic insult.
We believe that several chronic conditions caused by underlying ischemic injury can be improved through the application of our CD 34 cell technology, including but not limited to coronary microvascular dysfunction or CMT.
Limb ischemia or CLI free.
This disease.
Diabetic kidney disease, or <unk>, and no option refractory disabling angina or noida.
I will now speak to each of our development programs kicking off with <unk> 16, our promising CD 34 cell therapy product for the treatment of coronary microvascular dysfunction.
In May of 2020, the company announced the full data results from the escape <unk> trial at the society for cardiovascular angiography and interventions are Skye 2020, scientific Session's virtual conference.
On a highly statistically significant improvement in coronary flow reserve correlating with symptom relief for patients with coronary microvascular dysfunction. After a single intra coronary injection of <unk> 16.
DMD is a disease that continues to be under diagnosed and potentially afflicts millions annually, a vast majority of whom are female with no current treatment options the company.
Is committed to raising awareness this growing womens health crisis, and finding an effective treatment and consequently, the company recently initiated and is currently treating patients in a rigorous phase II clinical trial known as the freedom trial, which to our knowledge is the first controlled regenerative medicine trial in CMV in.
The United States.
Investigator and subject response to the freedom trial has been favorable and early enrollment proceeded. According to plan. However, the continued impact of the COVID-19 pandemic, including the resurgence of cases occurring in select areas throughout the United States has contributed to a general slowing of enrollment in <unk>.
<unk> further work with investigators and prospective subjects feedback led the company to propose to the FDA amendments to the freedom trial protocol to enhance the breadth and speed of subject enrollment. These changes include expanding the techniques that are acceptable for diagnosing CMV. Nevertheless, given.
The uncertainty that persists surrounding the future impact of the COVID-19 pandemic on potential patient recruitment and the accessibility of investigator sites. The company now projects enrollment completion for the freedom trial to occur in the third quarter of 2020 with final data based on the 6 month assessment of all subjects expected by the SEC.
Quarter of 2023.
Turning now to <unk> 12, known as <unk> in Japan, our product candidate for the treatment of critical limb ischemia and burgers disease.
On Azure was awarded a sakigake designation from the Japanese regulatory authorities for the treatment of critical limb ischemia and burgers disease, an orphan sized subset of CLI.
<unk> designation is akin to an <unk> designation in the United States and affords the recipient prioritized regulatory consultation a dedicated review system to support the development and review process, including the option of a rolling registration submission as well as reduced review time of 6 months for the registration application.
Once filed.
On the <unk> is also eligible for early conditional approval and possibly full approval in Japan based on the compelling nature of the complete data from our ongoing prospective randomized controlled open label Multicenter study in CLI and burgers disease patients, which was designed and Si and direct collaboration.
The Japanese TDMA.
Note that conditional approval of Osaka Darkey product only requires the demonstration of a trend toward therapeutic effect together with acceptable safety.
The company's registration eligible study of <unk> in Japan for the treatment of CLI and burgers disease has shown positive results to date. The initial responses observed in subjects, who have reached an endpoint. In this study are consistent with a therapeutic effect and safety profile reported by previously published clinical trials in Japan.
In the United States.
The study's enrollment continues to be slowed by the COVID-19 pandemic impact in Japan, including multiple state of emergency declarations by the Japanese government. However, the company is encouraged that less than a handful of patients on needed to reach steady completion. The exact date of which is impossible to predict given the continuing.
Impact of the pandemic on clinical trials in Japan.
While the final outcome of the trial will depend on all data from all subjects the data to date isn't correct.
Nearly 60% of subjects.
Cohort, having reached a positive CLI free endpoint, despite a natural history of such patients that predict continuing disease progression to amputation.
Regarding commercialization our strategy remains to license a partner <unk> in Japan and to that end our conversations continue with prospective partners and we continue to seek to consummate a deal in concert with the completion of the study if not before.
Earlier. This year, we were pleased to report that the U S. FDA granted orphan designation to <unk> as a treatment for burgers disease. However, any potential development in the U S will be decided after further discussion with FDA on the requirements for registration all expected prior to the end of this year.
Moving on to our most recently proposed development program <unk> 201 for the treatment of diabetic kidney disease the.
The company has prepared an initial development plan for the clinical study on <unk> to zero on the CD 34, investigational product for administration via the renal arteries to show the material to slow the deterioration alright, yielding reverse the decline of renal function.
Kidney disease.
Though still pre dialysis exhibit rapidly progressing disease.
Progressive kidney failure is associated with attrition of the micro circulation of the kidney preclinical studies in kidney disease and injury models have demonstrated that protection or replenishment of the micro circulation results and improved kidney function a phase II proof of concept randomized placebo controlled study.
For the stage 3 chronic kidney disease patient population is planned to initiate in the next few months. The protocol calls for a sixth subject open label treatment run in on and which patients will be treated sequentially to be completed evaluated and cleared for continuation by the study's data safety.
Monitoring board prior to initiating the 40 patient randomized placebo controlled double blinded portion of the trial.
The company is projecting that safety data from the sixth subject running on will be completed by the end of the second quarter of 2022 and.
And lastly, I'll ago for the treatment of no option refractory disabling angina or northern.
As disclosed on previous.
<unk> acquired the rights to data and regulatory filings.
For our CD 34 cell therapy program for northern.
Yeah.
Based on the clinical evidence from our from completed studies that a single administration of all ago reduces mortality improves angina and increases exercise capacity in patients with otherwise untreatable angina. This product received regenerative medicine advanced therapy.
Designation from the FDA better known as on that.
Discussions with the FDA have resulted in a rejection of the company's efforts to reduce the FDA requirement of a 400 patient phase III study for registration, including and on a 50 standard of care patients and an arm of 150 placebo patients despite data showing that the northern <unk>.
Appalachian is orphan inside.
Because the enrollment of the study of this magnitude and design is projected to take many years if executable at all the company has decided not to pursue a phase III program for olive garden on its own but we'll continue to seek a partner to execute the study and advance the program.
So in closing we are very pleased with the corporate and development achievements made in the second quarter and first half of 2021 without.
Throughout the balance of the year, we expect to advance our clinical development pipeline and we will strive to execute on a number of important development milestones more than ever our experienced dedicated and passionate team remains committed to the advancement of our programs as we work to bring innovative treatment options for patients in need and with that operator, we're ready to take.
Questions.
As a reminder to ask a question. Please press the star key followed by the 1 on your Touchtone phone.
First question is from Joe Gomes with H C. Wainwright. Please go ahead Sir.
Hello, Joe.
Hi, This is Sarah on for Joe Thanks.
Hi.
First question is with regard to the freedom trial in particular on your protocol in place in the event that patients who test positive for COVID-19.
Yes, there is Sarah in fact, we've had several patients who have passed screening and we're either scheduled for treatment or.
For a further follow up and they tested positive for Covid and when that occurs if it is prior to treatment their treatment is postponed until they can test negative and that usually takes several weeks. If if it's been after they have been given the treatment then they only get their follow up visits.
When they are also able to test negative although some of the some of the follow up can be done over the phone and not all of it. The other is physiologic testing involved but most of the patients that have been impacted have been impacted prior to the.
The administration of the treatment and so its just put off treatment for several weeks.
Pandemic is also closed or slowed down the enrollment in a number of our sites for some period of time as those sites experienced an influx of especially Delta variant COVID-19 patients and they're using more of their emergency an operating room staff to help out with those seriously ill patients in the short term.
<unk>.
Yeah.
Alright, and my my second question is that how do you envision the regulatory paths at first day on the extra 1 assuming the positive outcome on the error proof of concept study.
Well there are 2 I guess.
Perhaps even 3 positive outcomes from this study.
The <unk>.
Going from maybe lease positive to most positive the first would be that we demonstrate that the product is well tolerated.
And that the patients.
<unk> a trend.
Toward some sort of therapeutic effect, but but nothing that is yet definitive which would mean, we'd probably need to do a larger trial to get to some therapeutic efficacy or effect measurement.
The next would be that we're able to show safety again and also <unk>.
So that the product can slow the progression.
Of the decline of Egfr in these patients and that would be.
A very nice result, but because this is akin to what some of the more recent treatments that have been approved have been able to do but they have to do that with multiple administrations of product and the best case scenario would be if we can demonstrate safety and demonstrate that we can actually reverse the decline of egfr.
Essentially regenerating.
The kidney and depending upon whether it's the first second or third it will determine whether they are <unk>.
More than 1 additional trial necessary, how big those trials will be and whether or not the product will be eligible for an <unk> designation and the consideration of a possible path to an early conditional approval.
Okay. Thank you.
Thank you Sir.
Next we go to the line of Shubin do cents ROI with Brookline. Please go ahead.
Yeah.
Thank you plan on Shahbandar, calling in for Mark from Brooklyn Price should then I appreciate the hi, I appreciate the update thank you.
Congratulations on the successful line you're filing for <unk> 1.
I was just wondering if you could provide some color in terms of patient recruitment for the planned phase scoop or <unk>.
Terms of age gender et cetera.
Sure so the.
On the real needs, while the patients will all be.
Adults for there'll be 18 years.
Of age or older and I think they would have to be less than 75 years in age and they and they have to have rapidly progressing stage <unk> kidney disease with it along with their diabetes, but other than that there are no gender or other kinds of restrictions for all day.
The inclusion and exclusion criteria that the protocol is now available on clinical trials Dot Gov that so you can see all the details there if you'd like.
That is useful thank you.
1 more question you did touch upon you know.
The COVID-19 situation underwriting on the rising Covid cases.
Was wondering if you could just provide some additional color on the impact of these rising cases on the on Edgar trial in Japan.
On the last day.
That inform that.
There are only a handful of patients on <unk>.
So just wondering if they're on.
And what is your outlook in terms of site reopens.
Generally on low when.
When you look at the share should Linda I'm happy to yeah happy to Scott. Please.
Please go ahead.
<unk>, sorry about that but no.
The.
Recruitment in Japan has all but been shut down from about the last 18 months when when the.
On the Japanese government declared a state of emergency.
1 of the impacts of that state of emergency is that all major hospitals have to.
Allocate all of their available facilities to treat COVID-19 patients and.
Non COVID-19 patients and especially the clinical trials on <unk>.
Moving extremely low priority and so as a result.
Patients in our protocol in Japan require.
Overnight hospitalizations day after the treatment.
Debt.
There had been no beds available because of the ongoing.
On a state of emergency and so we haven't been able to recruit.
Our expectation is although this is.
Just speculation we don't have any official word yet, but our expectation is that.
After the Olympics and towards the end of the summer that the Japanese government will begin to lift the states of emergency and as they do we have a number of people who have been screened and are in the queue waiting to be treated and so im hoping that hospitals, then are able to allocate resources.
Reopening sites.
<unk> the clinical trials that we'll be able to get these people in and get them treated and as I said with only a handful to go it shouldnt take us very long once.
We're up and running again to complete the enrollment for the trial and then we just have to finish the 1 year follow up on those finally enrolled patients.
Thank you so much sounds great. Thanks for taking my questions.
Thank you.
Next we go to the line of Pete Enderlin with mass partners. Please go ahead.
Good afternoon, and thanks for taking my questions.
Dave You said that you expect to initiate a diabetic.
Kidney disease trial.
Second half would you.
Refine that down to either the third quarter or the fourth quarter cash are telling you.
Well, it's probably going to be somewhere on the cusp of the 2 that's why we haven't been specific so it could be.
September October ish is our is our is our goal, but certainly before the end of the year. We expect to have our first patients enrolled and remember this will be initiated with the sixth patient run in and to be a bit more specifics. So everyone understands this the way that this has been set up with FCA and the DSM V. Because this is the.
First time that we'll be making injections of our cell therapy products into the renal arteries is that.
The first patient has to be treated and then that patient has to be followed for a certain amount of time to ensure that day.
Have no no adverse events than the SMB will review that patients file.
Agree that it's safe to proceed and give us the green light to then enroll the next patient and we will follow that sequential approach until all 6 patients have been treated and evaluated by the DSM V. So we're expecting that it will take somewhere between 6 and maybe 8 months.
Actually do those 6 patients because of the stop and start debt.
Associated with that and then we'll be able to move on to the 40 patient blinded randomized trial and of course that will be enrolling multiple people simultaneously across a variety of sites and so we hope that that will evolve obviously much faster.
Okay. Thanks.
Yeah.
So on a sort of a general question about the FDA.
They're always difficult to deal with but do you think that they are state of engagement. These days.
Worse, because theyre distracted us preoccupied and relating to that.
Not being able to agree with them was that mainly just.
Where they are on.
Operationally or were there more specific disagreements regarding.
Ill, let go that debt.
Could you just couldnt get them to budge on.
What were those.
So let me let me be very clear when I provide the sensor I do not speak for the FDA.
Alright.
<unk> can speak for themselves I do not speak I can only comment on our experiences in dealing with them. So first it goes without saying that FDA is overwhelmed with work at the moment like like many employers. They are they are understaffed.
And they've experienced staff shortages because of COVID-19 on 2 fronts, because lots of treatments, including the vaccine needs to be reviewed.
On a number of their employees have also been sick and have missed work. So they are having a tough go of it like everybody else and trying to keep up with workload.
That's part of it.
And that's reflected in the fact that when our experience and I won't be too specific here, because I don't want to see.
Like I'm Criticising the agency, but just to say that typically when you request. The meeting the meetings are scheduled in the 90 day window now meetings are for us at least are being scheduled and 180 day window. So, they're obviously backlog and thats a bit of the issue.
Relates specifically to all ago I think our issue comes down to as I pointed out here that.
They are requiring us to perform a large phase III trial 400 patients that in and of itself is a challenge given that the patient population for nor debt in the United States is orphan insights, which means there is less than 200000 patients. Our best guess is that there is somewhere on the order of 30% to 50.
Patients nor to patients here in the United States. So to try to do a trial of that size in that patient population is already challenging than what makes it more challenging as their requirement that we have a 50 patient standard of care on which means the patients basically don't get they get the treatment that they have now which.
As already not working otherwise they wouldn't be interested in the trial or they get randomized to placebo.
So there is a 50.50 chance that somebody with Noida and these people could be having as many as 7 debilitating angina episodes per day.
All of us would much prefer to work in a country, where there's an F D. A.
Rather than 1 where there wasn't so you know <unk>.
Most of the time, we come to very good very reasonable agreements with them and you know and they base their decisions on the science that they say so that's important.
Yeah fair enough on hold on.
But there are only a handful of patients left and the the 30 person cohort and it's an open label truck and give us some.
Idea of what the what.
What the results look like I mean, you said and the the burgers piece it's.
Roughly 60 per cent so how does it look for the.
Twenty-five or so or whatever it is and the other part of the trial.
Well you know remember this is a a a controlled trial so in the burgers cohort. It was all burgers patient in the.
Standard CLI cohort there, there's a random mutation between treatment and standard of care, Okay with a label right.
It's open and label, but what I'm, saying is that at any point during the 12 year follow up a patient could convert from having CLI to being CLI free and then.
After becoming CLI free they could also.
Convert back before the follow up period is over that's why we're reluctant to provide any data on that cohort, even though it's open label until the whole patient population is done because it could change and it's it's very confusing for investors and others to hear a changing data set.
With burgers that is done so I have no problem, telling you what their myself talk with that.
Cause I'm looking at what might be a avenue towards inorganic growth, which would be.
<unk> acquisition of assets for the pipeline what partnering on development for for products. So the pipeline.
This concludes the question and answer portion of the presentation and now I will turn the call back to Doctor Mazzo for closing remarks.
So again, thank you all for participating on today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements in progress and we remain grateful for your continued interest in in support of collages Biosciences stay well and have a good evening.
This concludes today's teleconference. We thank you for your participation you may disconnect. Your lines at this time have a great day.
[music].