Q2 2021 Stealth BioTherapeutics Corp Earnings Call

At the feedback on the pre NDA questions. We had previously codes and we eventually make the decision to submit our NDA. Although there can be no assurance that the FDA will file the NDA, Jim will review the basis of the submission briefly in his slides.

Been closely partner throughout this process with Barth syndrome Foundation, which is the tended most of our FDA meetings with us and has gone to great lengths to educate the FDA about both of the unmet need in this disease for a patient focused drug development, it's petition to us of submit and for NV for F. D. A to file and review our NDA.

Its collaboration with the many Kols the wrote a letter of support for FDA and its recent first of its kind of listening session to educate F. D. A about of tolerance for lack of certainty of benefit.

Consistent with the history of our strong engagement with the patient community. The Barth syndrome Foundation is very supportive of our submission decision, we do ever of pediatric disease designation for Allen member tied for the treatment of force and we will be requesting priority review of our application.

We're also making great progress on the other element for tight pipeline expansion opportunities. So we've reached the alignment with the FDA on the rationale and design of our upcoming phase III clinical trial in patients with the mitochondrial myopathy do the nuclear DNA mutations and we're expecting to enroll our first patient in that program by year end.

Our principal investigator at the children's hospital of Pennsylvania is incorporating FDA feedback into the protocol for the Friedrichs ataxia trial, which we still expect to initiate by year end and Jim is actively partnering with the Duchenne and Becker muscular dystrophy patients and key opinion leader of communities as a member of the cardiac working group updating the.

For industry. This guidance the development of which was spearheaded spearheaded by the patient community with first published by FDA in February 2018 to provide recommendations for sponsors developing therapies for these devastating diseases.

We're also anticipating a very busy fall for ophthalmic development initiatives as we look forward to completion of our phase 2 clinical trial in geographic atrophy early next year.

The recent analysis of mitochondrial health and the medical Israel Rich ellipsoid zone of the retina supports the scientific rationale for our development initiative in the M D, where we hope to be the first therapeutic with the potential to actually improve vision for the more than 5 million people affected worldwide by the devastating and progressive the blinding disease, where.

Increasingly optimistic that our interim vitriol development initiatives will result in a less onerous dosing regimen for the elderly patients affected by this disease and also to potentially pay for the pathway for other retinal indications such as glaucoma.

Finally, we're making meaningful traction in our efforts to develop mitochondrial therapeutics to address the novel Neurodegenerative indications at the P. T 272 continues to show promise in various preclinical models and we're expecting to be back in the clinic in phase 1 dose ranging studies by early next year. Our S. E T 550 theory.

<unk> also offers the potential first in class dual mechanism of.

Of action to address the parents, who assist in complex 1 dysfunction observed across different neurodegenerative disease pathologies, we're anticipating numerous meaningful milestones in the coming months and we believe the success on these initiatives could potentially be transformative for the field of mitochondrial medicine I'll be turning over the call to achieve clinical development office.

Third Jim Carr to provide more color regarding our pipeline update Jim is going to start by walking you through how we reach sort of decision regarding the birth NDA submission before turning to our other and more commercially meaningful development initiatives. He's obviously include our upcoming dry and see data read out of phase 3 nuclear DNA myopathy trial and the.

Teaching and he's also represent near term, albeit much larger opportunities Jim.

Thanks, Randy good morning for those of the law.

Line.

We'll be focusing of flights.

As Rina mentioned, when we met with the division of of Cardiology, Neurology and the office of Cardiology Hematology endocrinology nephrology.

The request in early April we were advised of itself will approach the jewelry the digital data to support a portion of D. A.

B of phase III randomized withdrawal trial of 1 would push from put them thinking of element for tied for almost 3 years in the open label extension would receive either element for tighter of placebo until the middle of a member of the parents leading to treatment failures occur.

This was consistent with the price we receive from 3 prior FDA Review Division.

For the division of Cardiology for Ultra recently advised us that for further considering the trial design.

They do not since the trial would be informative, while we recognize the fda's advice, we should generate additional data supporting the NDA over.

Over the course of our multiple subsequent communications with office and divisional leaders of the FDA, we were unable to identify the feasible trial designs to turn to the additional data.

This is largely due to the fact, the sort of is it sufficient available patients for this ultra rare disease. The forward in the trial.

Despite the advising that we need to generate more data to support of decision to review our NDA.

Yeah. It did provide feedback from our various pre NDA questions in June.

We have since completed the additional analyses of the FDA requested during our February neither of which we hope could support of decision to review.

The accordingly decided to submit the NDA and we have notified the FDA that our submission should be affected this month, although there can be no assurance of the FCA will file the NDA.

I'd like to spend a few minutes reviewing our thoughts regarding potential approval pathways.

Obviously, our thoughts and we are not fully aligns with the FDA and he has given its continued requests that we generate more controlled data.

However, the hopes with the thorough assessment of our submission, including the new analysis, we're including the FDA.

Well appreciate the persuasiveness of the regulatory arguments.

On slide 7.

I'm showing the slide summarizing the data from fever, or 1 which was the phase III retrospective natural history control study.

Turning to the long term interventional cohort from the all the with natural history controls.

It was designed and conducted in accordance with FDA guidance for use of retrospective natural history controls for rare disease drug development and meets the definition of and the FDA regulations have been adequate and well controlled study.

You'll note that the primary endpoint of change in just some sort of 6 months.

Walked us was met at multiple time points.

Improvements in 6 minute walk far exceed those seen in multiple published cardiovascular trials for which have supported of proven indications like pulmonary hypertension, which are typically in the 30 to 40 meter range.

Notably the left ventricular stroke volume, which is inherently for.

Inherently objective endpoint so it should not be influenced by the patient's knowledge for the treatment declines of natural history controls versus the improvement observed for flooring turbulent remember the time therapy.

We believe the that the speed of a 1 day that could provide the basis for approval supported by efficacy data from the placebo controlled portion of the supposed to be the 201 or April kind of teams, which are prognostic markers of cardiac function improved as did echocardiographic parameters for 10 of the 12 patients following the El merk filling them up for the third.

Yeah.

Data from numerous other preclinical and non clinical studies in person related indications as well as clinical data for related indications provides additional support.

The big for the other potential approval pathway as an accelerated approval pathway.

Recently explained by senior FDA officials in the context of another recent approval. The accelerated approval pathway was created to the earlier access to potentially valuable drugs for patients who have a serious disease with limited or no treatment options for these patients are often willing to accept to some degree of uncertainty of clinical benefit.

Generally speaking this approval pathway it turns on changes and surrogate endpoints for intermediate clinical end points that are considered reasonably likely to predict clinical benefit and sort.

Diseases.

Typically although not always as the recent approval of illustrates the surrogate endpoints should be validated.

In our situation, we have several potential surrogate endpoint several of which are well understood although not validated in bars.

On slide 9.

First lesson shirts, the stroke volume was extremely low in all patients enrolled in the state patrol 1 stroke volume of heart rate.

Craig cardiac output resolved, resulting in the mean cardiac output of any of these patients. So low that almost meets the definition of cardiogenic shock from each of them Boys, who had a median of the age of only about 17 years old.

Stroke volume is known the continued to decline year over year and young men with borrowers as we've demonstrated since the the old 1.

This left ventricular dysfunction of the sudden reported to contribute to the progressive skeletal muscle myopathy and birth, which makes sense since muscle is highly dependent on the increased cardiac up for drawing exertion.

We have now demonstrated that the element for tide mediated improvements in left ventricular function of the speed. The 12, 1 improve the myopathic symptoms as was the increasingly correlated to improvements in the 6 minute walk test.

We believe the improvement in stroke volume as we observed is reasonably likely to predict clinical benefit consisting of the improved exercise performance.

This has also been shown and published data from other cardiac indications where improvements truck families to improve exercise tolerance.

What is also logical.

Expect that given the co dependency with the ejection fraction for the stroke volume May also lead to improved outcomes such as reduced the incidence of debt for heart transplants.

We've already shown the correlation with clinical benefit with the 6 minute walk test data.

Second the 6 minute walk test while the itself the clinical endpoint could also meets the definition of the intermediate clinical endpoint reasonably likely to predict the improvement in the progressive irreversible morbidity instead of effects for patients as they age the sound voice of the stars for only walking a mean of 395 meters of baseline which is.

The impaired relative to the reference of standard of the mean of 725 minutes for housing of 16 to 18 year old boys and even below the mean of 430 meters reported for middle age patients with mild to moderate symptoms of heart failure.

You can see from the slides that all patients from proof of longer treatment and the improvements were large for most patients. Although there was not of placebo control for the more than 1.

100 meter improvement of observed in the speed of the 201 open label extension, we do have data to report any assumption that patient's knowledge of treatment influence. The after the extended on this assessment leading to them for more than 25 per cent medium getting from baseline.

The slide 11.

The third point is the MLC L. The Ci ratio with the diagnostics of the disease improve for every patient from their first of all of their last visit.

Those improvements were statistically significant from baseline during the open label extension of a portion of the trial well. This is not a validated surrogate endpoint. It does represent the pathophysiology of basis of the disease and is directly related to the element.

The old amortize proposed mechanism mechanism of action.

As Doctor would factors recently commented ultra rare diseases, such as borrowers are a place for a mechanistic reasoning they really play a major role.

As we have to stop just thinking the empirical evaluation of its the only way of determining truth.

Yes.

Finally, and this is on slide 12 recent commentary by the FDA in the context of the accelerated approval pathway suggests the patient acceptance of uncertainty of benefits of an important consideration.

Notably the Barth syndrome commodity met with the FDA in March of 2021 for listening session dedicated to their thoughts regarding acceptability of uncertainty of benefit.

We've summarized some of the resulting messages on the slide but also encourage you to visit the <unk> syndrome Foundation for a comprehensive report on.

This listening session.

Brian to say a few words about the launch planning in the face of these expedited submission timelines Brian.

Thanks, Jim and thanks for those on the line for joining today, we're certainly making progress in bars commercial launch planning in terms of broadening disease awareness among kols from prescribing doctors payer of education and distribution planning.

That said, we will be cautious about ramping commercial spend until fda's decision on filing the NDA for more prudently manage our financial resources.

We think given the size of the disease. We can quickly recoup time once we have a better line of sight to FDA decision, making.

1 area, we do plan to push forward its expanding our expanded access protocols into more of a treatment AMB. So that we can broaden access to element per type of therapy for boys and young men with force.

We're pleased to report that the FDA approved this intermediate expanded access protocol for bars patients of June.

This will also put us in a position to execute more efficiently on any post marketing commitments. The FDA may request in the context of an accelerated approval.

I'll turn the line back to Jim to discuss our other clinical programs Jim.

Thanks, Brian.

As Rodney mentioned, we recently received constructive feedback from the Fda's division of rare disease in medical genetics regarding your phase III protocol for the subgroup of patients with primary mitochondrial myopathy responded in a previous trial.

I'm showing the slide showing the 6 minute walk test results for the patients who meet the criteria for a primary efficacy analysis of the upcoming trial as agreed with the FDA.

By focusing on patients of the nuclear DNA mutations affecting the amount of tonnage of rest of the film and by enriching for patients with predominantly myopathic disease presentation in which the ophthalmic Felicia is a clear clinical marker. We believed that we meaningfully derisk the heterogeneity of which we've struggled with in a previous the developmental efforts.

FDA agreed with the all major aspects of our proposed phase III trial design, including increased dose to the observed exposure response relationship the.

The 1 year trial duration and the proposed the endpoints, which are depicted graphically on the slide.

We're working now to get sites up and we hope to be enrolling patients by year end.

We're also actively engaged in supporting initiation of the free drug study for FDA proposed and instead of conducting an open label studies of the investigator consider either of placebo control.

For comparative dose that is low and the high dose of Illinois for tied to help inform efficacy signals.

The investigator opted to incorporate the comparative dose and the.

The treatment goal.

The increase from 10 to 16 patients.

We are studying both ophthalmic and cardiac endpoints from this trial as you can see from the depiction of the slide.

I've also been honored to join the group of highly knowledge of knowledge for external experts patient advocates and the other industry luminaries in the cardiac working group organized the update guidance for industry for Duchenne and Becker muscular dystrophy cardiovascular drug development for.

We're still planning to meet with the FDA later this year to discuss our proposed development efforts for Duchenne cardiomyopathy.

Shifting to our ophthalmic franchise, the upcoming phase III readout in our geographic atrophy study is the significant upcoming milestone, which could be of highly disruptive relative to other therapeutic approaches for dry AMD.

The progressive nature of dry AMD, and the fact that retinal cells do not regenerate, meaning the most therapeutic approaches are speaking.

The slowdown the of course of progression of the disease delaying the inevitable.

The March towards blindness.

We saw their analysis of the let's say zone health recently presented at ARVO is at all stages of the disease.

And Youll see drews and on the left and geographic atrophy for in the right baseline the lift so zone baseline ellipsoid zone health predicted improvement in visual function and our phase 1 trial.

That offers 3 key takeaways the first met of Concho function, the integral to visual decline in dry AMD.

Treating earlier may be key to improving clinical outcomes and third in line.

Out of country of targeted therapeutics like element for Titan may actually a lot of patients to reclaim some of their lost visual acuity rather than simply slowed the inexorable decline in for blind of.

I'll ask Brian to expand a bit more on commercial ramifications Brian.

Thanks, Kim our market research suggests that patients with slowly progressing somewhat silent disease like dry AMD are not always enthusiastic about coming into the clinic every month or 2 to get an injection in their eye directly into the retina, just the slowdown that subtle disease progression.

Frankly patient willingness to put up with this inconvenience is likely related to their degree of progressive visual dysfunction and its impact on their lifestyle.

Conversely, we presented data at ARVO, suggesting that intervening earlier is better.

How do we get patients to comply.

Our market research suggests that if patients are deriving tangible benefits such as seen better when they were driving at night of reading and low lead restaurants, the 1 more yeah.

But more likely stick with of course of therapy.

We also think it's important to lower the burden of therapeutic intervention for these elderly patients.

Moving to ask Marty Rodman, our Chief Research and development officer to speak on how our intranet trio target product profile is designed with this patient focus goal in mind Marty.

Thanks, Brian.

So I'm speaking the slide 28.

Brian mentioned, our data and the industry data show the retinal specialists prefer income vitriol administration for the treatment of their patients all of the once daily subcutaneous injection, while using reclaimed too.

Not for elderly patients we've already progressed of the what stage of the A&D and are having to go in monthly or every other month for injections.

Yeah Jack therapy.

The struggles to keep up with the need for such frequent injections into the rise we take the answer for element for time might be the design of matrix to release more slowly and of the retina from the window between doses to be extended the every 3 to 4 months rather than every other month for every month.

We're making progress with early product development as you can see some slight <unk>.

<unk> net the rate of the release of drug is controlled by the dissolution rate of the salon surround the matrix, which met our feasibility criteria.

We're hopeful of that Tolerability and pharmacokinetics studies using the prolonged release for.

Product prototypes as well as our ongoing pharmacology work will give us a fairly robust data package to support potential partnering discussions for them is the ability of reclaimed to date of that.

So I'll hand, it back to Jim.

Thanks, Marty just quickly we're progressing the SBC 272 of them back into the clinic early next year.

We continued to see truly promising data with this kind of fun and various for neuro degenerative models, and we expect to be presenting some of that day to this fall.

Our work on SBC true 550 series and are targeting platform remains on track.

We remained very enthusiastic about the scientific potential of our approach to help patients suffering from diseases of the mitochondrial dysfunction.

With that I'll turn the floor over to Rob to discuss our second quarter results.

Thanks, Jim and thank you all for joining US today as we issued our press release. This morning with our full financial results I will try to be brief and focusing on the highlights from the second quarter, which are summarized on slide 22 caching.

Cash and cash equivalents with $30.8 million of June 30th 2021, and May 2021 of the company received $8 million under the development funding agreement with Morningside expects to receive an additional $22 million during the fourth quarter of 2021. The company is also eligible to receive an additional 5 million.

Upon submission of the sparse NDA, which is currently anticipated to be in August 2021, the <unk>.

Company expects from its cash cash equivalents and investments as of June 32021, together with the $22 million in expected proceeds to be received under the amendment to the zone funding agreement will be sufficient to enable it to fund its planned operations into the second quarter of 2022.

R&D expenses were $5.9 million for the 3 months ended June 30 of 2021.

Moving to $7.4 million for the same period in 2020.

The decrease was due to a net decrease of $2.2 million in clinical costs, primarily driven by the close out of our P. M. M development efforts offset in part $5.5 million increase from preclinical costs, an increase of 0.1 million of employee related costs, an increase of point of 1 million from manufacturing cost.

G&A expenses were $5.1 million for the 3 months ended June 30 of 2021 compared to $4.5 million for the same period in 2020.

The increase was primarily attributable to 8 zero point for million increase in professional services is your point 3 million increase in pre commercial cost.

Zero point of $1 million increase in cost of insurance offset by a <unk> 2 million decrease in facility related costs.

Other expense was $7.4 million for the 3 months ended June 30 of 2021.

The other expense of zero point for millions for the same period in 2020.

Other expense in 2021 consisted of the $7.2 million loss due to the change in fair value of the derivative liability 0.2 million and interest expense.

Other expense in 2020 consistent of the zero point for a million and interest expense.

Net loss was $18.4 million or the <unk> basic and diluted net loss per ordinary share for the 3 months ended June 30 of 2021 as compared to $12.4 million or 2 cents basic.

Basic and diluted net loss per ordinary share for the same period in 2020.

I'll now turn it back to really to conclude.

Thanks, Brad.

We remain incredibly enthused about our of science and we're deeply grateful for the commitment of our team. We believe are on the cusp of milestones that may make a truly meaningful difference in the lives of the patients were committed to serve and which have the potential to find more broadly from any other therapeutic areas in which you mitochondrial dysfunction is implicated as the key driver of human disease.

With that I'll turn the call over for any questions.

Thank you if you'd like to register a question. Please press the 1 followed by the for on your telephone you'll hear of 3 Tom prompt to acknowledge of requests for.

My question has been answered and you'd like to withdraw your registration. Please press the 1 followed by the 3.

And once again to register for a question. Please press the 1 followed by the for on your telephone.

And our first question comes from the line of Matthew Luchini with BMO. Please go ahead.

Hello, Hey, this is jen on for Matt. Thanks for taking my questions. So just 2 for me Hum.

I'm just trying to understand more on what net to the change in submission plans.

Order of like so for the cause of it at the last quarter you guys plan on doing randomized withdrawal.

So with the OLED portion are there like are there no remaining patients and the trial is that what led to the change in the trends and the commission plans from there.

And how much do you like do you guys think you can leverage the patient advocacy group disappoint the big deal.

So great questions and thanks for jumping on and asking those.

So in terms of the change in the submission plans as Jim explained them FDA has actually had actually encouraged us to do the randomized withdrawal of the patients N O L. Lee.

Several times over the past 2 years and in the rest of patients that still 8 patients in the open label extension.

And so we submitted the protocol.

The FDA had been requesting and when they actually for us.

And reviewed the protocol the.

The basically came back and said that they didn't think that that trial will provide additional evidence of benefit so basically the reverse their thinking on the utility of that trial design.

With that collectively with the back and forth the pad with the agency, we really haven't been able to identify another trial design that's feasible given the ultra rare nature of this disease and that's really what led to our change in the submission plans. It. It's just that the trial design that you know again FDA had been pointing to for a couple of years.

In the end you know once they really kind of load in of review that they they just didn't think it would add value in terms of how much you can leverage for the advocacy I mean, I think you know the ability of patients to influence. The yes is obviously very interested in hearing from patients 1 of the things debt has really become quite a <unk>.

Parents and some of the guidance recently issued the other contract by the FDA about the accelerated approval path on.

Pathway is patient tolerance for uncertainty of benefit on in serious diseases, and certainly in an ultra rare disease like parts of that becomes more important and so there was the first of its kind of listening session held with the Barr syndrome Foundation in March where the community made their tolerance for risk of uncertainty of the benefit quite.

Clear.

And there is more information on that list in the recession available on the Barr syndrome Foundation website I encourage you to take a look there.

Okay. That's helpful and then for G H.

It sounds like you guys are looking to partner that out has there been any early preliminary discussions with potential partners in the Ta and bands for IV formulation is it do you do you like expect potentially a better but my exposure that's up 2 tenths of potentially.

<unk> efficacy.

Yeah, and that and then when the data readout in first half of what are your expectations in the data all debt.

Okay sure So Brian do you want to.

Jumping first.

Yes, so on the business development from front, we have and are having very early discussions with the folks that are interested in partnering with us.

We are looking at.

More of a worldwide probably partnership where we may keep a piece of the U S in conjunction with the partner.

And then I think for the IV T question, Marty do you want to take that.

Sure, Yes, we do expect that we're going to get higher exposures from IV administration.

<unk> designed the sustained release dosage form so that it provides what we believe to be an efficacious concentration continuously.

So we do expect that we're going to get a continuous and and relatively high level of them drive disclosure in the retina.

So that's the Jim I mean, I know you've done work on retinal exposure with sub Q and maybe your thoughts on that and expectations for the data.

Yeah.

So yes, it's consistent with the book with what Marty said theirs.

There's no question that we will see better drug exposure by introducing the drug into the vitriol versus subcutaneous.

The expectation for the data is.

Similar to what we saw in phase 1 so the expectation is that we will see.

An increase in the number of of letters of right under load the conditions and if that's true.

Expect to reap the fruits of that also from reading speed should also increase as well so our expectation again is consistent with what we observed previously.

Got it that's helpful I'll hop back in the queue. Thank you.

Okay.

Yeah.

You know when a when an NDA submission is received.

We'll evaluate it and in fact, you know I'm told us that they would evaluate any additional analyses that we are able to provide some additional analyses were requested by the FDA and we have completed those so that would be you know new data in our submission that hasn't yet been seen.

But again I think you know given the feedback is as you noted.

There is the there is a bit of a disconnect in terms of whether FDA thinks theres sufficient data to review based on what they had previously reviewed.

Okay. Thanks with respect to the phase 3.

In PMT.

Starting by the end of this year can you comment on the number of patients that you would like to enroll and how soon you can robust of patients.

Jim you want to take that.

Sure and thank you for the question the true.

So for the primary analysis, which again will be comprised of.

Patients with nuclear.

The nuclear mutations.

Also the have evidenced the PEO that'd be 90 patients. So we need 90 of evaluable patients for Hudson to enroll approximately 130 and again 90 of those would be the word.

These are the permanent analysis population.

We expect to enroll the trial within the year. So again, we hope to commence enrollment at the end of this year and.

By the end of next year, we should be fully enrolled.

Yeah.

Got it got it.

Okay. Thank you.

Thanks for the questions each of them.

As a reminder to register for a question. Please press 1 for.

Yeah.

I'm showing no further questions at this time I will turn the call back over to the presenters.

Great. Thank everyone again for joining this morning I'm, we're looking towards the updating you on our continued progress in the coming literally weeks and then months and appreciate again that during the call today.

With that we can conclude.

Thank you that does conclude the conference call for today, we thank you all for your participation and ask that you. Please disconnect your lines.

[music].

Okay.