Q4 2021 Ibio Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and walked through the eye by fiscal 2021 fourth quarter and full year financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session. So I asked a question during the session you need to press star one on your telephone if you require any further assistance. Please press star zero.
I would now like to turn the call over to your host Stephen Kilmer Investor Relations you may begin.
Thank you good morning, everyone before we begin I would like to remind you that during this call. The company will be making forward looking statements regarding our current expectations and projections about future events that are subject to risks and uncertainty.
Reference to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U S Securities and Exchange Commission.
No forward looking statements can be guaranteed and actual results may differ from the results discussed in the forward looking statements.
The information on this call is provided only as the date of this call and we undertake no obligation to update any forward looking statements statements contained on this conference call on account of new information future events or otherwise, except as required by law.
On the call today, representing the company are Tom I bet, <unk>, Chairman and Chief Executive Officer.
But antibiotics by Bio's, Chief operating Officer, Martin Brenner, I Buyouts, Chief Scientific officer, and Rob what the company's Chief financial and business Officer.
With that said I'll now turn the call over to Tom.
Great. Thanks, Steve and good morning, all I am pleased to report another productive period cry bio highlighted by a major expansion of our oncology portfolio specifically.
Specifically in August we announced the acquisition of the rights to our T X 003, a novel antibody developed by rubric therapeutics for the treatment of solid tumors.
We also entered a strategic collaboration with rubric to provides us access to their proprietary antibody discovery platform.
This will fit nicely with our own recently established drug discovery capabilities.
In another recent highlight relates to our infectious disease area.
Timber we took another step forward with our Covid vaccine candidate development by submitting a pre IND package fried by O to O two the F D. A.
But before going into more details on these advancements I'd first like to take a step back and describe our structure and business model and explain why we believe I buy a represent such a unique and compelling investment opportunity.
Our company now operates across two distinct but highly complementary segments first biopharmaceuticals, which includes our therapeutics and vaccines businesses are.
Our areas of focus include oncology fibrosis.
Diseases as well as areas of unmet medical need where in those specialties overlap.
Our second segment is bioprocess, which houses our products and services business units.
The latter operators I buy OCD M O L. L C and offers contract development and manufacturing services to third parties as well as to our biopharmaceutical segment where applicable.
Areas of focus for the Bioprocess segment include the provision of recombinant proteins to biologics developers using our proprietary plant base fast party manufacturing system.
And that's not to mention development services for improved product quality without very technologies.
Randy will be describing the past farming system in more detail shortly but at the moment, it's worth noting that we intend to use the speed and quality of the platform to create strategic advantage for our proprietary drug development initiatives.
Beyond that however, we envision past farming has the potential to become the industry's preferred alternative to cause it to traditional mammalian cell culture bio production.
At speed scalability, and quality and sustainability can fundamentally change the paradigm of recombinant protein drug developments like taking manufacturing off the critical path, while making agree on at the same time.
Thus, we've created the biopharmaceutical and bioprocess segments in order to help fully capture the value of the platform.
To that end, we see significant synergy between the two specifically the advances, we're making with developing our own molecules using fast farming helps validate the platform.
Prospective customers of our bioprocess business.
Meanwhile, our working bioprocess helps create visibility opportunities for in licensing therapeutics and vaccines to enhance the value of our owned biopharmaceutical pipeline.
So thus far I have described the tremendous opportunities that we're beginning to unlock cry bio, but maybe more importantly, we're starting to see our business model work in practice.
Rubric is a great. Representative example, as with many companies trying to advance a monoclonal antibody therapeutic attempting to do so using traditional mammalian cell culture methods as daunting in terms of the time and cost required.
That's true whether building one's own production capability or having to wait in line for the services. It services are an establish C. D M L.
The antibody is special great constellation needs than developing costs and timelines only tend to increase spreads. So in the case of Archie egg 003 from rubric will not only be able to give this very promising therapeutic candidate a new life on the past farming platform, where it will be known as <unk> hundred one.
But we have the potential to enhance its potency also when I was like memory technologies.
So let me now turn to summarizing the significant progress we've made over the last 12 months around this time last year, we laid out an ambitious plan to expand our biopharmaceutical pipeline targeting three main areas oncology fibrosis and infectious diseases. Today, we have successfully executed on that strategy with programs.
All three areas.
With respect.
Back to oncology, we announced in fiscal Q4, the establishment of our San Diego based drug discovery team.
We followed that up with the addition of three not that disclosed any cancer targets and our partnership with Baird you already biologics.
Thereafter, we reached agreement with rubric for Archie eggs or is your three.
We're truly excited about the prospects for this second generation anti CD 25, monoclonal antibody and Martin will be explaining why it a little bit more in detail later.
But this isn't even a half of it is part of our relationship. We also gained access to the rubric discovery engine, which uses artificial intelligence to aid in the development of new antibodies against epitopes that have proven difficult to target using standard approaches.
It all together, we believe we now have access to key drug discovery and development platforms that will enable us to sustainably move multiple cancer immunotherapy candidate into our pipeline over the coming years.
Now regarding fibrosis, we continue to advance our work on I buy a 100 molecules in <unk> peptide that has demonstrated strong anti fibrotic activity in preclinical models of disease for systemic scleroderma and idiopathic pulmonary fibrosis.
A quick reminder, the FDA has granted <unk> orphan drug designation for <unk> hundred for systemic scleroderma.
We remain on track to initiate IND, enabling studies by mid 2022.
With regards to the infectious diseases and COVID-19, specifically, we continue to believe that a nucleocapsid subunit vaccine may have the potential to address the growing mutational threat of the Sars Covid two virus, while addressing other unmet needs associated with the current vaccines displays spike protein.
We announced in July the successful results of our preclinical unionization studies on bio to owe to where do we observe robust memory T cell responses.
We've continued to advance our development efforts with the submission of a pre IDE package to FDA earlier. This month, unless again Martin will add a little bit more color on that program as well.
Finally, we also have an initiative in animal health with <unk> 400, our classical swine fever vaccine candidate.
We believe 400 addresses the current unmet need is most swine flu vaccines cannot differentiate infected from vaccinated animals and those that can are relatively expensive.
Classical swine fever has been designated a priority U S agricultural bio threat to the $7 billion U S. Pork export market. So we believe there is a significant commercial opportunity to develop an improved less expensive vaccine for this underserved market in animal health.
So I'd now like to turn the call over to our COO ready Maddox, who will explain in greater detail. Our fast farming platform helps us expedite discovery through the R&D process and ultimately accelerating the concept quite a timeline.
Andy.
Thanks, Tom I'm happy to be here on the call with you all today.
On past calls, while we have focused on the many benefits of our fast farming system, we haven't laid out exactly how they are derived.
Like to take a few moments to do that now.
And some of you may know our fast farming system allows us to produce biopharmaceutical using plants.
What you may not know is that greener options for the pharmaceutical industry are surely needed in fact, one surprising study showed that the pharmaceutical sector.
The 5% more emissions intensive than the automotive industry.
There are other benefits to our platform to such as reduce time and cost to move from concept to clinic easier scalability and lower contamination risk from a million viruses and <unk>.
This E S. D based platform is at the heart of what we do.
The process itself is straightforward.
First we start by growing our plants indoors using vertical farming techniques, which include advanced hydroponics and controlled led lighting systems.
The plants, we use have a weak immune system and they are particularly susceptible to infection.
Certain types of bacteria more on that in a minute.
Next we synthesize the gene encoding the protein we want to make a clone it into one of our fast farming vectors.
The vectors are then loaded into a species of agrobacteria. So that the microbes are armed deliver the gene of entrance to its ultimate destination.
We then create a solution of the agro bacteria.
<unk>, our eye bio plants into the Bath.
Fly back in.
Infiltrate the bacteria into the elite tissue.
With the bacteria infecting the plants and they deliver the gene vectors.
The plant sales essentially turning each plant into a little bioreactor.
The target protein continues to be expressed in the leaves us plants grow.
I buy it then harvest the lead and isolate and purify the protein.
It can then be formulated into the desired final product.
Plant based production saves months, an initial setup time compared with traditional methods.
In large part because there's no need for expensive labor intensive sell on engineering the.
Risks and delays associated with scale up are also reduced.
Since we're transiently transfected the plants at scale, if we want more product, we simply grow more plants.
Thus the material produced in small quantities during development.
Highly comparable to the material produced at commercial scale.
And there are notable notable differences between protein expression implants versus traditional mammalian cell culture system when it comes to sustainability.
At scale traditional methods, commonly utilized thousands of liters of specialized waterborne injection.
A large energy intensive bioreactor operation.
Often deploys the use of large quantities of single use plastic disposables.
In contrast, the main consumables in the fast farming operation.
Seeds bacteria and purified water.
As Tom mentioned earlier.
The Bayou business model is built on delivering speed scalability and sustainability to change the paradigm of drug development and manufacturing.
And fast farming allows us to execute on this strategy.
Both for our proprietary biopharmaceutical development programs.
And for our bioprocess customers.
We have intellectual property and deep interesting know how to use plants to produce biological medicines.
Best farming allows us to more quickly deliver our drug portfolio from concept to clinic, which saves time and allows for faster cycles.
When testing innovative medicines.
In addition, bass farming also provides the opportunity for I buyout to capture significant value throw out licensing of select pipeline assets.
In exchange for development and commercial rights I bio consign, a tractor supply agreements for clinical stage materials with partners.
The economics surrounding such agreements are significant with later stage clinical trial supplies likely to capture multi million dollar opportunities.
And with that I'll turn it back over to Tom.
Great. Thanks, Randy.
So having provided a review of our business segments, I think it's appropriate to give a little bit of perspective on how we plan to build value for our shareholders with our business model.
For instance, the deal struck with rubric to secure rights to an anti CD 25 antibody was based upon a multitude of factors not the least of which was recognized in the external value placed on next generation Immunotherapies.
To that end, we think its important to remind investors that there's already been significant external validation for our molecule with the mechanism of action like higher by a one on one.
Specifically there was a recent M&A transactions centered around an anti CD 25 monoclonal antibody that with.
With attainment of various milestones could reach a value of over $750 million.
As we evaluate future opportunities we want our investors to know that we are not only looking for first in class or best in class therapeutic potential, but also external third party validation by highly reputable organizations.
Of note by taking those fast follower approach. We also have the added benefit of learning from a competitor or maybe slightly ahead in clinical development, we intend to use their learnings in the clinic to our advantage as we think about how to formulate our clinical development plans.
Now, let me turn the call over to Martin Brenner, our CFO for more detailed review of our pipeline Martin.
Thanks, Tom I'm excited to share some updates on I, Bios biopharmaceutical pipeline and drug discovery activities, particularly in the area of oncology.
In August I bio significantly expanded its immuno oncology pipeline and R&D capabilities in a partnership with rubric therapeutics.
Tom mentioned earlier, so this strategic collaborations with rubric extended its pipeline by licensing it next generation anti CD 25 antibody immuno oncology asset.
T X series, three which we will refer to it as I buy a one on one as we bring it onto the fast farming platform.
CD 25 has emerged as a promising target for cancer therapeutics. It is expressed by immune suppressive regulatory T cells or T Rex, which in lung cancer cells to evade the immune system response, but also by tumor ticking T effector cells or T. S first generation anti <unk>.
Anti CD 25 antibodies potently blocked CD 25, but unintentionally also suppressed the IL two signaling pathway, which resulted in the depletion of both the immune suppressing T Rex as well as the cancer, killing T S.
Depleting both types of T cells, and therefore had no impact on the tumor microenvironment, while blocking IL two signaling also lead to unwanted toxicities how's.
However, second generation anti CD 25 antibodies like high value one one have more refined epitope binding which enables them to block C. D 25, well preserving IL two signaling which leads to preferential depletion of immunosuppressive T Rex, while allowing the T S to attack tumor cells, thereby creating a tumor micro environment.
Highly and hospitable to cancer cells.
Preclinical data showed that this molecule generates a strong anti tumor response, when administered as a monotherapy or in combination with checkpoint inhibitors.
Indeed, enabling studies five by a one on one I expect it to begin.
2022.
Beyond <unk>, we aim to bring additional new immuno oncology candidates the clinic faster and more cost effectively for our discovery collaboration with rubric rubric.
Rubrics robust discovery engine uses proprietary predictive algorithms to generate meso scale engineered molecules on Mems, which of antigens that steer antibody discovery towards very specific epitopes that have proven difficult to target using standard immunization and screening strategies.
As Tom noted earlier in the call. We also anticipate pairing rubrics platform with I'm biased, but I can nearing technology, which implies transgenic plants to optimize protein glycosylation patterns.
To increase cancer cell, killing potential.
In a major step towards establishing our own in house drug discovery capabilities, we have signed a lease for a new drug discovery site in San Diego, California, which is expected to become fully operational in the first quarter of calendar 2022.
And then three oncology targets to our pipeline of therapeutic candidates in July.
In addition, as part of our plan to collaborate with best in Class Technology Partners. We entered into a research services agreement with Fuji only biologics leader in antibody discovery and optimization.
Under the accord <unk> gained access to novel display technologies and proprietary antibody libraries.
Finally, turning to our work on COVID-19, I would like to elaborate on our Debbie strategy. The acronym stands for our approach that focuses upon the signing of next generation vaccine and interest of stiefel durability, a for access N V I feel they're meant inclusion.
While the current vaccines that used to spike protein are effective recent data suggest the durability of the immunity conveyed appears to be waning over time also access to these vaccines continues to be problematic in several regions of the world because of the expense and cold chain requirements associated with some products or due to challenges with intramuscular.
Injection or simply continued demand. Additionally.
Additionally, the emergence of the Delta variant and others of concern suggests that there may be value in designing a vaccine that can provide better assurance of immunity against future variants and be less susceptible to the risks of the spike protein escaped me.
It is with this strategic approach in mind that we designed <unk> two to it deploys the use of a sub unit the nucleocapsid protein of Sars COVID-19, two rather than the spike protein because the end protein is more highly conserved in the spike we believe it may have advantages as the vaccine antigen towards providing immune.
From prospective future variance.
With respect to durability. The preclinical data we observed suggest that I biotech two has the potential to drive long lasting memory T cell responses and lastly, with regards to axis a protein subunit vaccine like our candidate would be unlikely to have special cold chain requirements, and we could scale up manufacturing in a fast farming for some.
Okay.
While there's still much work to be done to continue to advance to two it is worth noting that in protein vaccine has the potential to be complementary to existing S. Targeting vaccines, we look forward to providing more updates on this program as developments occur.
With that I'll hand, it over to Rob who will cover our most recent financial performance.
Thanks Martin.
Rather than reiterate the details of the company's financial results, which are available in the press release and the 10-K I will simply speak to a few financial highlights.
Revenues for the fiscal year ended June 30, 2021 were $6.0 million, an increase of 50% over fiscal 2020.
We expect further growth in revenue in fiscal 2022, as our bio processing business continues to attract interest from companies, who wished to sustainably and quickly develop biologics implants.
However, significant quarter to quarter revenue variability with commonplace for early stage pharma service companies like ours.
Even the relatively small number of contracts and the timing of revenue recognition.
Based upon our current outlook, we expect a sequential decline in revenue during the first half of fiscal 2022 compared to the second half of fiscal 2021.
All of them by higher growth in the second half of fiscal 2022.
Both our R&D and G&A expenses for the fourth quarter and full year of fiscal 2021.
Up significantly over the comparable period in fiscal 2020.
This reflects our strategy to invest in our proprietary biopharmaceutical pipeline.
And our platform technology.
Across R&D and G&A, we invested in staff and external spend and implement our strategy.
We expect R&D and G&A will continue to grow in fiscal 2022.
But at a lower growth rate than we saw in fiscal 2020 one.
You will also note in fiscal 2021, but I buy a recorded $12.0 million in settlement income.
This reflects the value of our settlement of litigation with Fraunhofer.
While we recognize the income in fiscal 2021.
Bahnhof Roses, two cash payments of $6.0 million each one in March of 2022, and one in March 2023.
<unk> also agreed to pay off.
$9.0 million for a license to <unk> intellectual property.
Revenue for that license will be recognized when front hopper pays for the license in two installments of $900000. Each March 2022 and March 2023.
In terms of liquidity.
About $97 million in cash marketable securities and investments and debt securities.
As of June 32021.
Based on current plans, we believe our cash position.
Fishing to fund operations through the first quarter first calendar quarter of 2023.
However, if we find more opportunities to in license assets like Arctic 003, or cash needs could change.
With that I will now turn the call back over to Tom.
Thank you Rob so to summarize we are proud of all that the <unk> team was able to accomplish in fiscal 2021 and as much as we were pleased with the pipeline growth and development of our biopharmaceutical candidates to date, we remain committed to scaling this growth with additional new candidates and partnership opportunities going forward, we're confident in our strategy.
<unk> seen that already.
Our talent and capabilities are better than ever along with further demonstrating and proving out the platform a comparability to traditional mammalian cell culture.
Platforms that are out there only with many additional advantages.
We're also optimistic about the continued growth of our bioprocess business for that reason and it remains a core segment or by buying.
These aspects combined with our strong leadership team and board should ensure our continued growth as a developer of next generation Biopharmaceuticals and a pioneer in sustainable plant based biologics manufacturing.
Thank you all and with that concluding our highlights we are happy to take any questions you might have operator.
Ladies and gentlemen, if you have a question or comment at this time. Please press. The Star then the one key on your Touchtone telephone. If your question has been answered or you are seeing with yourself from the queue. Please press the pound key.
Our first question comes from Christian Kosuke with Cantor Fitzgerald.
Hi, everyone. This is Rick on for Christian This morning.
I just have two questions for you now that you have access to the rubric computational platform do you believe that this technology will be most useful for development in the new oncology pipeline or do you envision this sort of being broadly applicable throughout <unk> pipeline.
Yeah, Great question. So the initial focus really will be on oncology, that's where we see a lot of opportunity the whole category of immuno oncology.
As you know is really attractive space and when we pair up this capability the targeting capability that the rubric discovery engine brings along with the Antelope antibody libraries that we have access to and then or like an eerie technology, where.
We can control look like constellation patterns, well, a monoclonal antibodies there is a tremendous amount of value there. So.
And I'll ask Martin to comment on this a little bit further here in a minute.
But also too in the in the field of immuno oncology there are a lot of combination therapies wherein you.
Got a monoclonal antibody that can be paired with a checkpoint inhibitor.
To really drive some favorable anti tumor responses.
And so for those reasons, we see the most value coming from the oncology side of the portfolio that said.
There are other epitopes targeting benefits in other areas of the portfolio that we.
We will turn a blind eye to but Martin would you like to comment a little further.
Absolutely.
So and as Tom mentioned already it is it is absolutely our priority to drive the rubric discovery platform and collaborate with Rubicon immuno oncology targets. As you know there are several epitope several targets that have hard to target epitopes and dose would be kind of initial a high priority sparse.
But as Tom also mentioned this is applicable to other target classes.
Not just.
You know your traditional immuno oncology targets, which we will definitely explore export going down the road.
Understood. Thank you and maybe just one more question could you. Please discuss a little bit about the discontinued east to see project and whether there were any significant learnings to come out of the program. Despite the discontinuation. Thank you.
Sure.
The molecule, we were able to bring that into our portfolio at an interesting time and this is a little bit similar to what we're doing but in a very different way with anti CD 25, where you get a you get another player in the space and sort of a free look at how they are clinical trials for <unk>.
So when we brought that molecule in <unk>.
There was the opportunity to pursue a certain pathway with it and we were closely watching.
Purion Biologics, who also had an ace two FC in the clinic.
Following their phase two readout.
And our review of the regulatory landscape as well as the clinical trial pathway.
That.
<unk> had.
Commented on we simply felt that.
The opportunity for that particular strategy as a treatment.
For COVID-19 disease.
It was risky.
Yes.
And the two companies in addition to appear and I believe also Sorrento, what others had ace two FC molecules that were in their portfolios and similarly discontinued those offerings and the ultimately the costs.
Benefit of continuing with the molecule, we deemed to not be worth it.
That said others may still continue to go forward. So we've returned the asset back to its originator and.
It's quite possible.
That someone else may choose to move forward with it if that was to be the case.
We still have the manufacturing capability, we've been able to produce the molecule on our platform. So we'd be available as a contract manufacturer or somebody else just to pick up the asset.
Martin did I did I Miss anything there.
No Tom I think I think you've covered everything specifically.
Her on data that did not meet every all of the primary endpoints was kind of disappointing.
To see.
Alright, I guess in the end.
Yeah, you bet and just in terms of learnings I think it was one of those where there was a.
The good news was it was a low cost asset to bring in.
In hindsight it was it was worth doing.
At the moment had things gone a different turned out a different way and has some of the regulatory agencies gone a different route.
We would have been very well positioned to take it forward. So I think if anything.
It kind of goes to our model and strategy, it's biologics drug development not everything works out.
But that was a low cost low risk way to be poised to move forward and prospectively create a high value asset, but it's just not.
Turns out so.
Thanks for the question.
Again, ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone.
Our next question comes from Matthew harm with Matthew Herm LLC.
Good morning, everyone. Tom I appreciate you sharing the information with US this morning.
My question has to do with that San Diego facility I'm, specifically wondering if you can get off of any detail with regard to the budget for that facility and kind of most importantly is the extent factored into your declared cash paying.
Yes. It is.
Matthew in and in terms of the spending that were associated with it it's not only going to be the lease for the facility of course, but then also the staff that we're hiring.
In that location. So it's a in terms of the capability that we're getting we get we get a nice bang for the Buck, especially with the synergy associated with what we have in for rubric. So.
In fact in.
In our.
Cash burn estimates we had previously also factored in the potential for the.
The collaboration with rubric and in license of the molecule. So that's all fairly well baked and Rob anything I missed.
No that's correct Tom.
Yeah.
Yeah.
And I'm not showing any further questions at this time I'd like to turn the call back over to Tom for any closing remarks.
Great just want to thank everybody for your time and attention where can.
<unk> to be bullish on the platforms as we have it and as well as the you know the growth of our biopharmaceutical pipeline. So just pushing everyone.
A great rest of the Monday and the week.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
Yeah.
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