Half Year 2021 Connect Biopharma Holdings Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the connect Biopharma first half 2021 financial results conference call.
At this time all participant lines are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press Star then one on your telephone. Please be advised that today's conference is being recorded if you acquire any further assistance. Please press Star then zero.
I would now like to hand, the conference over to your host today, Matt Steinberg of Finn Partners. Please go ahead.
Thank you operator, and welcome to conduct final form as first half 2021 financial results call.
With me today is Dr. Zane Wang co founder and CEO, Selwyn Ho Chief business Officer, and I recall interim CFO.
Today's call is being webcast and will be posted on the company's website for playback.
During today's call management will provide an update across our pipeline programs and review our first half 2021 financial results.
Following our prepared remarks, we will open the call to Q&A.
Before we begin let me briefly review our forward looking statements during.
During today's call we will make various forward looking statements investors are cautioned that our forward looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by our forward looking statements. Please.
Read the Safe Harbor statement contained in our press release that we issued yesterday afternoon as well as risk factors contained in connect Biopharma registration statement on form F. One for a more complete discussion of these risks and uncertainties.
Now I'd like to turn the call over to Wei.
Thank you, Matt and good day to everyone.
I would like to welcome everyone to our first financial results Conference call.
Before providing an update on each of our exciting clinical trials and recent progress let.
Let me first provide a brief overview of our company and the team.
Connect biopharma as a global clinical stage biopharmaceutical company focused on improving the lives of patients by developing therapies for the treatment of T cell driven inflammatory diseases.
Connecticut, the growing team of more than 80 full time employees comprised of seasoned industry leader with significant global experience in immunology drug discovery and development.
At quarter in China, we have ongoing clinical development and operations in the U S, China, Australia and Europe.
We specialize in designing and developing product candidates that modulate the immune system with.
We've had particular focus on T cells.
By leveraging our internal expertise and unique insights in therapeutics targeting the immune system.
I have always thought identify highly differentiated potentially best in class product candidate can validate your pockets as well as potential first in class molecules against novel targets.
When you focus on talking to any inflammatory diseases with significant unmet medical need.
Millions of patients worldwide.
Since our founding.
And then two internally discovered molecules into phase II clinical development.
The first being our lead product candidate that is designed to treat atopic dermatitis or a D severe persistent asthma.
Chronic rhinosinusitis with nasal polyps and other type two inflammatory diseases.
Our second clinical candidate is an immune modulator for the treatment of taking from a toy bowel disease, including ulcerative colitis and Crohn's disease.
We also have a molecule that recently entered in a phase one trial in healthy volunteers for the potential treatment of chronic if I might call rate rises.
Our innovative approach to drug discovery is designed to speed up the identification of potentially highly differentiated immune modulators.
Now, let me turn to an update.
Our recent milestones and pipeline updates.
In March we.
We completed an IPO listing of American depositary shares on the NASDAQ Global select market.
The operating raised net proceeds of approximately $209.0 million.
We significantly enhanced our cash balance, enabling us to invest in and advance our pipeline.
Armstrong Investor supports further underscored by the $440 million raised today from top tier investors.
Which includes $135 million from our series C financing.
Were completed in December 2020.
In addition to the successful listing.
We have expanded our executive leadership team.
We even stepped up their salary in hull, our chief business Officer.
Mr Yao and heal helix as our vice President Finance.
And Mr Champion as General Counsel, and Chief compliance officer are important steps in advancing our organization and our growth strategy.
Do you have a new team members have extensive experience in their respective fields.
And we look forward to the many contributions to our growing team.
In January we.
Established a scientific advisory board, which is comprised of clinical development program medication experts with deep experience in dermatology.
So I'm not talking about disease.
Asthma and other diseases that have resulted mainly successful drug approvals.
These seven world class experts have already provided invaluable insights driving our efforts in building a highly efficient discovery and development organization.
We thank them for their support as we continue to advance our clinical pipeline with I will now discuss in greater detail.
We have a pipeline of potentially highly differentiated product candidates against valid that destocking.
And for all of these connect high school global development and commercialization rights.
Starting with our lead product candidate <unk>.
<unk> is currently in a phase <unk> trial for the treatment of adult patients with moderate to severe atopic dermatitis.
The global market size for a cup of commentators is large and growing.
At the end of 2020.
We estimate there was approximately $14.0 billion and is expected to grow to $22.0 billion by 2025.
GBP 201 is a novel human monoclonal ITT people antibody directed against IL for alcohol.
Comments up you'll need for all fall in all 13 receptors, which is a validated target for the only currently FDA approved biologic therapy.
In a randomized placebo controlled phase one trial in healthy volunteers.
Administration of a single dose of CVT 301 was well tolerated and led to a suppression of serum biomarkers of inflammation.
In a randomized placebo controlled phase one b trial in <unk> patients.
We observed meaningful results, which demonstrated rapid improvements in signs and symptoms of <unk>.
The writers.
Hey, D disease severity and patient quality of life.
Although no head to head trials have been conducted.
We believe that CBP Chihuahua may have three potential advantages over the current standard of care.
First.
It binds to a reason of alcohol.
How far that is distinct from that bound by two kilo bat and associated with high binding affinity and potency all alcohol alcohol, which we believe may lead to improve clinical response.
Second it.
It might have a faster onset of action as demonstrated by desktop and a phase one b trial.
And finally, it may provide a longer duration of drug exposure up to subcutaneous injection.
Evidenced by data from a phase one trial and unpublished stirred up I'm a phase one b trial.
In April we had.
We completed full enrollment of our phase two b trial.
This global randomized double blind placebo controlled trial to assess the efficacy safety PK and PD profile CVP tool. One was designed to enroll 220 patients and is being conducted at 60 sites across the U S, China, Australia and New Zealand.
And this trial CVP to alarm or placebo was administered to eligible adults with moderate to severe a D or 16 weeks eight weeks I'll follow up.
We remain on track to report topline results from this trial in the fourth quarter up 2021.
We also plan to initiate a China stand alone pivotal trial called CVP to along 80 patients in the third quarter of 2021 as part of our country specific development strategy.
In addition to atopic dermatitis, we are conducting clinical trials to assess the potential of CV pizza along in other diseases Cleveland by that this regulation milk th two immune response.
So Peter Matt has already demonstrated efficacy.
These include phase two trials of <unk> in asthma, and chronic rhinosinusitis with nasal polyps.
In May we dosed the first patients from the phase II clinical trial evaluating the GBP 201 in adult patients with moderate to severe persistent asthma.
We believe that the global market opportunity for asthma biologics is growing rapidly.
With a total market size is projected to grow to $7.0 billion by 2024.
These are small trial is a global randomized double blind placebo controlled trial to assess the efficacy and safety of two doses of GBP 201 administered subcutaneously to eligible patients.
It is expected to enroll approximately 300 patients across 80 study sites and.
They bought into a treatment period of 24 weeks and then falloff PRA top eight weeks.
With regard to our global phase III nasal polyps trial.
We remain on track to dose the first patient in the second half of 2021.
Now turning to our second molecule that's been faithful BD.
T V. P 57 is that potentially a differentiated only if ministry aneel modulator for the treatment of inflammatory bowel disease.
It's a small molecule modulator of S&P, one a record to the T cell mobilization auto claims until the periphery.
Looking at some key long lead to reductions in the level of these T cells in circulation and a reduction in besides inflammation.
And some people want is a validated therapeutic target with three drugs approved to treat multiple sclerosis.
The FDA approved one of these trucks for UC in May 2021.
The estimated global market for UC was approximately $9.0 billion in 2020.
And the estimated global market for C. D was approximately $11.0 billion in 2019.
We believe that Cvp's, we all serve them as an oral therapy has the potential to address these diseases due to its potency specificity.
And P D properties observed in our preclinical studies in early clinical trials.
We are conducting a global phase <unk> trial, and Youll see and anticipate reporting top line results in the first quarter of 2022.
In addition.
We intend to initiate a global clinical trial in C. D based on the preliminary clinical responses observed in a limited number of patients and then earliest VP of clinical trial.
Finally.
We initiated a phase one trial in healthy volunteers to explore the potential of CPP 174.
A peripherally restricted histamine three receptor antagonist for all of our administration.
To treat chronic itch associated with giving information.
We believe that the ability to quickly and Olivier it's in a setting up a D has the potential to complement the N type critical effect of disease modifying Alpha Alpha blockers.
Such as CVP 12, one auto Peter Matt.
Our preclinical model have indicated that CBP, one seven Paul led to reductions in scratching, we've seen the first 30 minutes of dosing.
Which could potentially translate to rapid reduction in prices in the clinic.
This randomized.
Double blind placebo controlled single ascending dose trial in healthy volunteers AML.
<unk> to evaluate the safety Tolerability and PK of CPP 107 fall given orally.
Following dosing.
He's volunteer will be followed for up to seven days.
We expect to report top line results in the second half of 2021.
To summarize.
The first half of 'twenty or 'twenty, one it's been a period of significant progress for connect.
Highlights include our initial public offering in March.
And execution against our objectives and strategy. Despite the uncertainties stemming from the global pandemic.
We now have several important upcoming data readouts expected in the second half of 2021 and into the beginning of 2022.
We believe our growing body of evidence will validate our approach in developing differentiated therapies for T cell <unk> in inflammatory diseases with significant unmet medical need.
Now I would like to turn the call over to Eric Hall.
Overview of our first half 2021 financial results.
Thank you Wade and good morning, everyone.
Yesterday, we filed our form 6K for the six months ended June 32021, which contains detailed financial results and is available on the SEC and connect websites.
Although I'm not going to review our detailed results during today's call I will briefly discuss our cash position and the strengthening of the balance sheet.
With the successful listing of our American depository shares or <unk> on NASDAQ in March 2021.
Raised net proceeds of approximately U S dollars, and a $9.0 million or RMB.
$1320.0 million.
Supported mainly by these proceeds we had cash and cash equivalents of RMB.
2000, $25 million or U S dollar $318.0 million.
As of June 30 of 2021 compared to RMB $1011.0 million as of December 31st 2020.
During the period ended June 30 of 2021 net cash used in operating activities was RMB $260.0 million or U S. Dollar $40.0 million compared to RMB $53 million in the prior year period.
The increase in the use of cash was due primarily to increased R&D and administrative expenses as well as the expansion of our clinical trials and development of additional pipeline therapies.
We believe based on our core operating plan and expected expenditures their existing cash cash equivalents and short term investments and wealth management products.
Be sufficient to meet our anticipated cash and capital expenditure requirements for at least the next 12 months.
That concludes our prepared remarks, operator, you may now open the call for questions.
Thank you.
As a reminder to ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.
Our first question comes from the line of Kelly <unk> with Jefferies. Your line is now open.
Hey, Andy this is Hal.
<unk> four <unk>.
Thanks for taking my questions and congrats on the progress. So maybe two questions from my side first is for the phase to be CDP to align cost.
What.
Based on maybe your feedback on the count out what efficacy and a safety profile.
CPP <unk> 10 out of the 2% and lets the efficacy premiums that CDP until one needs.
Needs to demonstrate Tucson stand out and the second question is look even a stand alone PDP tool and ties initiating China could you help us to understand.
The development plan of CDP to align China, and what may be local high for a potential BLA submission in the future. Thank you.
Yes.
Thank you so much for the question.
The CVP tool one phase II trial actually.
I mentioned earlier today that it's already.
We have completed the enrollment of we're expecting data readout.
For Q.
<unk> is a full quarter of this year and we're looking forward to that very exciting time.
Time to share.
Better now.
As we mentioned earlier that CVP 201 does have a number of characteristics that gives the competition. So.
To expect they will produce.
Positive data going forward and I'm going to.
Then this to selling to address the question and also the question on the time of stand alone starting selling.
Thank you and thank you all for the questions.
So three three parts of that so the first question you had was regarding what to Kols thing.
Two.
The degree of differentiation required to be successful, which was related to your second question about how we felt that it was that was that correct.
Yes, that's correct.
Okay. So.
With the trial design for the Phase III study.
Really three objectives. The first one is we are doing dose ranging and therefore want to establish between the three doses that we have which is.
600 milligram loading dose followed by.
Q2.300 milligrams.
Dose every two weeks.
The 600 milligram loading dose followed by a 150 milligrams every two weeks and then the 600, what I am looking dose followed by a 300 milligrams every four weeks.
So with those doses, we hope to be able to replicate what we see what we've seen in phase one because we believe that we have a signal for potential superiority. When you look at it side by side or greater efficacy at least.
We also hope to be able to replicate the demonstration of rapid onset of action as we've seen in all of Facebook.
The study.
And finally this is the first time that we will be dosing Q4 doesn't dosing regimen and so.
As was mentioned, we hope that we'll be able to show.
An extension of the dosing interval with a similar type of efficacy profile.
Less frequent injections.
When we've spoken to Kols regarding.
This type of study design.
Appear to be different it does really depend on the measures that you were looking at the outcomes, but generally speaking a 7% plus difference.
On something like you see 75 or the easier one would start to convince people that there may be some differences.
Put these properly in a head to head study clearly there will be doing this on the side by side basis, and I think that's all that's all philosophy as well.
Much in line with what the goal is the same so 7% plus would be something that we would hope to demonstrate.
Demonstrate now of course, there's multiple scenarios.
We are obviously looking at not just efficacy superiority, but as we said demonstrating a rapid onset of action and also demonstrating central greater convenience by using Q4 W.
So that's kind of the way we're thinking about the study.
Clearly, we'll have the results we have a good quarter for this year and we'll be able to talk about that more.
Your other question around the China study.
As we've always mentioned we plan to initiate that study in the second half of this year.
You may have seen that the study has now been posted.
Clinical trials.
And so the study design.
Has been demonstrated.
It's basically.
Multi center randomized control clinical study again looking at patients with moderate to severe atopic dermatitis.
We estimate that the potential enrollments required will be around about 250 patients and the initial 16 week phase we'll be looking at.
A dose of CDP to one versus placebo.
The idea of this study as we've described before is that.
We believe that this combined with the evidence that we've generated from the global Phase II study.
In atopic dermatitis, which does have Chinese patients recruited.
To live.
A package of evidence that we believe may.
Hope to advance and accelerate.
The submission and then ultimately hopefully the approval in China.
Great. Thank you so much and congrats again.
Thank you.
Our next question comes from the line of Thomas Smith with SBB Leerink. Your line is now open.
Okay.
Hey, guys. Thanks for taking the questions and congrats on all the progress a couple of questions on our end.
On the upcoming so you see the atopic derm data for 201.
Trial sites in the U S, China, New Zealand and Australia.
At this point do you have visibility into the regional makeup of patients who are in the study are most of the patients coming from the U S or from Asia or if you don't have visibility can you talk about your expectations for.
The regional makeup of our patients in the study.
Thank you so much.
Yes, and I think.
We can share a little bit about what we know so far this is a first of all a global study.
And you've already in patients in four countries.
The study as we said earlier has been going well and we have completed enrollment.
Our expectation is that the majority of the <unk>.
In this study will come from the U S.
Probably no that we started.
Study from the U S side and then.
And then some other countries.
Follow that initiation. So in the end, we expect to have the majority of patients from the U S. But each of these countries will have some contribution.
So I wouldn't have anything to add to.
No that's exactly right way.
Okay got it and then.
On the pathway for <unk> hundred one in China in atopic derm.
Can you just give us an update on your recent regulatory interactions and.
Do you think is it possible to seek breakthrough therapy designation with your kind of dataset or is that perhaps something that you would look to do once you have the phase can be dataset.
So let me quickly.
I kind of addressed this firsthand turn sour income.
Expand if need to so again this is a trial we call it a pivotal trial because we.
So the model the started design with.
While we understand them.
Previous examples of trial size and.
And design that would allow products to be approved in China, and so we will be able to get our top our topline data for <unk>. The global trial that has all the different different dosing regimens.
And as you know that that study also include.
Significant number of patients from China, and so the China Standalone study will then expand on the observation.
Well.
So that is sort of the the idea going into this.
With respect to the breakthrough therapy status, certainly we do not have to wait until.
The completion of the China Standalone study to apply.
I think if we.
Steve.
Significant signals that pointed to a directional.
Excellent efficacy onset or some other parameters, yes, we do have the ability to apply for breakthrough status as you set that to appeal that you understand that to appeal right now is the only.
IL four receptor alpha antibody available in China.
Do you have additional comment.
Thanks, Tom Thanks for the question I think the only thing I'd add is.
The regulatory pathway for accelerated trial and approval in China as you've mentioned.
This route.
Could be considered would be breakthrough therapy and.
In terms of qualification criteria.
Yes, we would.
Probably have to demonstrate it.
So some clinical superiority.
And therefore looking at the data timelines and the cadence is waste that we don't need to wait.
To start the study, but once we do the phase II B data from the global study given that there are numbers of trial the patients within that study.
Can review that data and if applicable.
Place for that based on that criteria.
Yeah.
Okay got it really helpful commentary. Thank you guys.
Thank you.
Thank you.
To ask a question you will need to press Star then one on your telephone.
Our next question comes from the line of Joe Qantas Zoro with Piper Sandler Your line is now open.
Hey, guys. Thanks, so much for taking my questions here and congrats on all the progress.
Just wanted to follow up on the expected phase III data.
Later this year could you maybe help set expectations around what we should expect to see in a topline release should we expect to see details on absolute number of Iga responders easy 75 responders insight into other secondary endpoints week four time points I just wanted to get a sense of what we should expect to see thanks, and I have a follow up.
Yeah.
Thank you Joe. Thank you for the question and I'll have <unk> address.
Address this question.
Thanks, Joe for the question so expectation wise.
At the moment, we're still clarifying.
Exact readout timelines for the study and working with our partner <unk> to determine what will be available of which points.
Places that we'd like to study.
The minimum we will obviously say whether or not we've hit the top line or not.
Youre aware that primary endpoint.
Just on baseline change from BC at week 16.
We hope to be able to demonstrate and reveal other secondary endpoints.
Pretty much similar.
We discuss these phase one b readouts in January last year, but at this point in time, absolutely confirm that because we're still in discussions with the CRA.
Okay got it fair enough that's helpful and then my follow up.
We think about China, I think Sanofi had commented earlier this year that the early launch for <unk> within China was exceeding its early expectations I'm wondering if you've heard anything or learned anything around that launch that you could speak to that as we think about a potential future launch for <unk> hundred one thanks.
Yeah.
Thank you and selling well also.
This question.
So Joe obviously, we believe that the entry of a biologic.
In China.
Great for patients.
Certainly.
Bill amount being in the same class as ourselves we feel that a lot of work is being done now bye.
Sanofi to develop the marketplace to get access.
Four to bring that to patients.
We recognize and reflecting the same information that you've probably seen and heard.
Which is that the launch has met or even exceeded our expectations.
<unk>.
The patient access is gradually improving.
Given the recent <unk>.
We hope to be able to leverage that because they will be doing.
Some grades.
To provide you our success.
Getting the product out to patients through the hospital systems or into the various channels.
In terms of additional information I would say that.
We are monitoring this closely we expect them to.
I know, it's the results overtime and call out the China.
<unk> because it's so <unk>.
Expanding market.
We hope that our success is clear basically for the benefit of patients, but also allows us to confirm the potential for <unk> hundred one in China.
Should we be able to demonstrate.
For efficacy in our phase II trial.
Okay got it that's helpful.
And just one thing to add too is that now.
<unk> news is obviously.
So a very good news I think for.
A company like connected developing.
Alpha receptor Alpha blockers, Paul Chinese patients and I think that.
From what we see on the ground.
We do have a sense that there are a lot of patients that really are looking for efficacy of <unk> therapy.
Like IL four receptor alpha blockers, and we can see that from the enthusiasm.
Patients coming to participate in clinical trial Central I think the signal that we're seeing here is fairly positive.
The other thing we are.
We are pleased to see is that.
Unlike some other therapies well.
Already has been a quality space into the same category of products.
Competing.
In China.
The ifr receptor alpha blocker.
Yes.
<unk> is still right right right now there's only one approved drug available and given the number of patients in China. We are really optimistic about what we can do it with.
Product like <unk> in China.
Okay got it thanks, so much for taking my questions.
Thank you.
Includes our question and answer session.
I'd now like to turn the call back to <unk> for closing remarks.
Thank you.
Well, it's been an exciting first half of 2021 for connect Biopharma.
The transition to being a public company and strengthen our financial position with our IPO complete.
Complete enrollment of our phase two b trial in AAV.
She added two clinical trials and expanded the talent the law.
<unk> leadership team.
Looking ahead, we have multiple clinical milestones anticipated in 4043.
Including data readout for CVP 12, one GBP <unk>, seven and CVP, one Kevin Paul.
Our patient centric focus gives our team the motivation to develop.
Potentially best in class and first in class product candidate targeting inflammatory diseases with significant unmet medical need.
We look forward to updating you on this important readouts in the coming months.
Thank you for joining us today and thank you for your continued support.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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