Q3 2021 Synthetic Biologics Inc Earnings Call
Yeah.
Good afternoon, and welcome to synthetic biology, 2021 third quarter Investor Conference call.
It's just those who've been in listen only mode should you need assistance. Please signal our cold for us, especially by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on your telephone keypad.
Draw. Your question. Please press the Star then two please note. This event is being recorded.
At this time I would like to turn it over to Vincent Perrone director corporate communication at synthetic biology Vincent.
Thank you Simona and good afternoon, everyone welcome to synthetic biologics 2021 third quarter Investor Conference call today, I'm joined by Steven Shallcross, Our Chief Executive and Chief Financial Officer, Dr. Michael <unk> Senior Vice President Research and development and Dr. Vince later head of product and corporate development.
Is that a biologics issued a press release this afternoon, which provided operational highlights and reported our financial results for the quarter ending September 32021.
The release can be found in the Investor Relations section of our website synthetic biologics dot com.
During our call we will provide an operational update on our Gi and microbiome focused clinical programs and will summarize our financial results. We'll take questions. After our prepared remarks. In addition to the phone line. This call is being streamed live via webcast, which will be archived on our website for about 90 days.
During this call, we'll be making forward looking statements regarding synthetic biologics current expectations and projections about future events generally the forward looking statements can be identified by terminology such as May should expects anticipates intends plans believes and estimates.
And similar expressions. These statements are based upon current beliefs expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in synthetic biologics filings with the SEC many of which are difficult to predict no forward looking statements can be guaranteed and actual results may differ materially from such.
Statements. The information on this call is provided only as of the date of this call and synthetic biologics undertakes no obligation to update any forward looking statements contained on this conference call on accounts of new information future events or otherwise, except as required by law with that I'll now turn the call over to Steve Steve.
Thank you Vincent.
Afternoon, everyone and thank you for joining our 2021 third quarter Investor Conference call.
We continue to make significant progress on our clinical programs and I could not be more excited by the outlook for our business.
Our balance sheet remains stronger than ever with $72 million of cash on hand at the end of the quarter, providing us with substantial runway to support our operations into 2023.
Within this time, we expect to execute on a number of key milestones related to our current therapeutic pipeline that we believe will drive significant value for shareholders.
In addition, our strong balance sheet has enabled us to actively evaluate a variety of strategic options, which could include potentially acquiring or licensing new therapies that could complement and further enhance our current pipeline.
We look forward to providing updates on our progress.
In terms of some of the near term milestones first we anticipate reporting data from the first antibiotic cohort of the Syn <unk> phase <unk> clinical trial during the first quarter of 2022.
We look forward to reporting the data readout from our ongoing phase one multiple ascending dose clinical trial of Syn <unk> 20 during the second quarter of 2022.
I'll discuss more about each of these in a moment, but as you can see we're in the midst of a very exciting period for our company.
Turning now to the quarter.
<unk> and Syn <unk> 'twenty, we previously announced that patient enrollment dosing and evaluation was completed in our phase one open label single ascending dose or sad clinical trial of Syn <unk> 'twenty, our proprietary formulation of intestinal alkaline phosphatase or IAP intended to treat local and systemic.
Vic diseases stemming from inflammation of the Gi tract and disruption of the gut barrier, including radiation or apathy and Silly Act disease.
Analysis of preliminary data from the Sad study demonstrated syn <unk> 'twenty maintained a favorable safety profile and was well tolerated at all dose levels.
During the third quarter, we initiated a phase one placebo controlled multiple ascending dose clinical study of Syn <unk> 'twenty.
I am pleased to report that the first cohort of eight study participants will complete final dosing and PK sampling. This week with dosing of the second cohort of eight study participants expected to begin shortly thereafter pending a safety review.
Importantly, both phase one studies are designed to support the development of <unk>, 'twenty and multiple potential clinical indications.
Turning to sing for Washington University continues to screen and enroll patients for our phase <unk> clinical trial in allogeneic hematopoietic cell transplant or HCP recipients.
Prevention of acute graft versus host disease.
Data read out for the first of three antibody cohorts is anticipated during the first quarter of 2022.
As I've stated before we believe both thin for Ensign 'twenty may address very sizable in underserved markets and they have the potential to be foundational long term value drivers for our company and our shareholders.
With that backdrop I'd like to provide a more detailed update on our clinical development activities, beginning with our <unk> four or <unk> program.
<unk> is our first in class therapeutic intervention designed to protect the gut microbiome from antibiotic mediated <unk>.
We believe protection of the gut microbiome may play a pivotal role in improving health outcomes for patients administered long courses of intravenous beta lactam antibiotics as part of their treatment plan for bone marrow and solid organ transplantations.
We continue to advance this program in the form of a phase <unk> clinical trial in allogeneic <unk> recipients with our partner the Washington University School of Medicine in St. Louis.
Study is designed to evaluate the safety Tolerability and pharmacokinetics of Syn <unk> in this fragile patient population.
Earlier, this year, we announced that enrollment and patient dosing had commenced in the first of three sequential antibiotic cohorts that will each be administered a different IV beta lactam antibiotic to treat fever following conditioning conditional therapy.
In total eight participants in each cohort will receive syn <unk> and four will receive placebo.
At this time patient screening and enrollment over the first cohort remains ongoing. However, we are experiencing short delays in patient recruitment as a result of demand from competing trials and a lower number of transplant recipients, whose underlying disease warrants high intensity conditioning.
Despite these delays which are outside of our control. The trial is progressing and we look forward to reporting the data readout from the first antibiotic cohort during the first quarter of 2022.
Assuming these results are in line with our expectations and we observe that Singapore is not systemically absorbed in this first cohort will consider applying for orphan drug designation and begin preparations for our phase III program, while we complete the remainder of this clinical trial.
Next I'd like to provide an update on our syn <unk> intestinal alkaline phosphatase or IAP program.
We continue to view <unk> as a versatile therapeutic that has the potential to treat a number of clinical indications stemming from inflation of the Gi tract and disruption of the gut barrier, including Interop of peak secondary secondary radiation therapy used to treat certain cancers and celiac disease.
Both of which have a significant unmet medical need.
Importantly, we've overcome the manufacturing hurdles, which has previously hindered the clinical and commercial development of IAP to treat these diseases.
Since <unk> is our proprietary recombinant form of bovine IAP produced and chose cells and formulated for oral delivery.
It.
Is an endogenous enzyme expressed in the upper small intestine that plays an important role in maintaining good health through at least three important mechanisms.
First it diminishes Gi inflammation by Detoxifying inflammatory molecules second it acts directly on the intestinal wall to tighten the gut barrier to diminish leaky gut.
And third it functions to support a healthy gut microbiome.
In addition, we believes in 'twenty has the potential to diminish low grade systemic inflammation, which is believed to exacerbate metabolic syndrome and accelerate the progression of diseases associated with aging.
We previously outlined in detail our clinical development strategy for 2020, which includes the completion of safety studies before progressing into phase II proof of concept clinical trials in a targeted indication.
Earlier this year, we announced the completion of our phase one open label single ascending dose clinical trial, which evaluated safety Tolerability and bio distribution is in 2020 four healthy adult volunteers.
Analysis of preliminary data from this study demonstrated that's in 'twenty was well tolerated at all dose levels and no adverse events were attributed to study drug.
<unk> no serious adverse events were reported and as anticipated <unk> 'twenty was not detected in the stomach circulation.
During the third quarter, we initiated a phase one placebo controlled multiple ascending dose clinical study of Syn <unk> 'twenty.
This clinical study is intended to evaluate the safety Tolerability and bio distribution of <unk> 20, upon repeated dosing and up to 32 healthy adult volunteers.
The study is divided into four sequential cohorts of eight participants with four doses of Syn <unk> given orally twice daily for 14 days.
As I mentioned earlier I am pleased to report that the first cohort of eight study participants will complete final dosing and PK sampling this week and dosing of the second cohort of eight study participants is expected to begin in relative short order pending a safety review.
We expect top line data readout from this clinical study during the second quarter of 2022.
Assuming successful completion of the phase one Mad study, we anticipate conducting a placebo controlled phase Iia clinical trial as early as the second half of next year.
In one of our initial target indications and <unk> secondary to radiation therapy used to treat abdominal and pelvic cancers for celiac disease.
Looking ahead, we are also considering potential phase II clinical trials was in 'twenty, two evaluated therapeutic utility in additional indications, including non alcoholic fatty liver disease diseases stemming from disruption of the gut barrier as well as metabolic and inflammatory disorders associated with aging.
The latter of which are supported by our exclusive option license agreement with Massachusetts General Hospital.
We are excited about these virtual about this personal program and its potential to become a platform therapeutic for our company. We believe in 'twenty will play a major role in driving long term value to our shareholders, while targeting a large underserved markets, including celiac disease.
With that backdrop I'll review, our financial results for the quarter ended September 32021.
Our balance sheet remains very strong and we are well capitalized to support our operations for the sale for the foreseeable future as we reported approximately $72 $1 million of cash on hand at the end of the third quarter.
Our strengthened financial position and current cash runway provides more than sufficient funding to achieve a number of meal major milestones, including the completion of ongoing phase <unk> clinical trial of Syn for completion of clinical trials for Syn <unk> 'twenty through proof of concept in <unk>.
Other key value drivers for the company.
Before reviewing our financials for the quarter I'd like to mention that in addition to the 10-Q, we will be filing a registration statement. This evening culinary covering warrants associated with our 2018 public offering of common stock.
The registration statement filed this evening will supersede and expiring registration statement and should be viewed simply as a housekeeping matter.
Now turning to the third quarter financial results.
General administrative expenses increased by 9% to approximately $1 3 million for the three months ended September 32021 from approximately $1 2 million for the three months ended September 32020.
This increase was primarily due to higher insurance cost audit fees and registration fees offset by lower legal costs and vacation expense.
Research and development expenses increased by 116% to approximately $2 million for the three months ended September 32021 from approximately $900000 for the three months ended September 32020.
This increase is primarily the result of increased clinical trial expenses as we continue dosing patients in the phase <unk> clinical trials in four and by higher indirect program costs for the three months ended September 32021, including an increase in manufacturing costs for Syn <unk> 'twenty.
We anticipate research and development expense to increase as our ongoing clinical trials continue to enroll patients.
To wrap up.
The remainder of 2021 promises to be a very exciting time for synthetic biologics, we are very happy with our progress and remain focused on executing on our strategy.
As I previously stated I'm more confident than ever in the outlook for our business and believe we have the financial strength to execute and deliver on our clinical strategy.
At the same time, we continue to actively evaluate a variety of potential opportunities that could further expand our clinical development pipeline through licensing acquisitions or other strategic options, where we believe we can further enhance value for our shareholders.
I'm proud of the progress we've made and even more excited about what lies ahead.
Like to thank our shareholders for their ongoing support and we look forward to keeping you updated on our progress.
Now I will turn the call back to Vincent to open the call for questions.
Thank you Steve Good morning, we'd like to open the phone line of questions can you. Please describe the procedure to ask questions for our listeners.
At this time well begin the question and answer session trace quick question you May Press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing dickies Chase try your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Jim Molloy with AGP.
Yeah.
Hi, Thanks for taking my question.
I was wondering you talked a little bit about.
The areas of potential acquisitions and potential assignment I know.
It's hard to know on timing on on deals.
Is there any.
Any framework may be able to give you and then what makes most sense for what areas you might be targeting please.
So Jim.
Thanks for the question good to hear from you.
The only thing I can say at this point is that we have been very very active in evaluating a number of exciting opportunities.
We are in various stages of diligence.
These things take time.
And outside of that.
I, just really cant give any specific details on timing.
There are always unknowns that come up along the way as you're evaluating ideas and.
I can assure you that our team is working very very hard I can I can tell you that.
Yes.
Over the last year or so up until today, we've probably evaluated several dozen ideas and we do have a short list we are.
Again.
And our process and as soon as we are ready to to to talk publicly about it we'll get that news out.
Understood would there be a way to characterize the stage of development of the products that youre looking at Brian.
What we did is when our teams started evaluating opportunities we sort of set of criteria out there.
And one of those criteria is that we we were interested in clinical stage assets.
So anything phase.
Phase one phase II phase III. So our primary interest is in clinical stage asset item not in preclinical stage assets.
Yeah.
Excellent and then the.
Oh, four let's take a move back from fourth quarter to first quarter next year.
And the Cobra related or just.
It is taking longer than perhaps previously disputed.
For the <unk> cohort data, yes, yes. Thanks for the question, let me hand, it off to Vince. He just recently had an update from wash U. This week, so I'll, let him handle that.
Thanks, Tien tsin.
Yeah.
It's not part of it related to that.
Washington give us even when we spoke to them said than the <unk>.
Number of transplants is not dramatically impacted by Covid things have settled down somewhat on that regard.
Those are in place.
Two things one is the <unk>.
Competing clinical trials, so there's multiple investigators.
Tremendous institution like Washington University, and then competing for patients.
Is that all patient population is required to have what's known as Milo ablative conditioning, which means that's the most intense conditioning regimen.
If patients come in and done.
You bet.
Thank you referred to a reduced intensity conditioning regimen and ethically you must do that you're going to have the best outcome for the patient.
Have a bit of a spartan velocity.
Well, we have three to four patients come in they're Oracle paas.
<unk> intensity conditioning and eligible for our study so far.
Those are the two things at all.
Impacting on the enrollment will have impact on the NIM Robyn the velocity of bumps.
Typical of this area.
And people that are working in the space with transplant.
And having spoken to.
Our principal investigator.
Okay.
We expect to have enrollment timing wise, we'll get several people on a row that will be eligible and dwell study and then there might be a month, whether it's a patient or two that will take.
Against all of ethanol isn't going to get.
Alright conditioning, so it's really down to the underlying disease and the therapeutic modalities that are used to treat them.
Yes.
Got it understood.
Clinical trials.
Our challenge is to take a little longer sometimes one quarter's movie deal.
Yes.
Then on other indications for <unk> beyond celiac.
The novel novel D and the others any any thoughts on timing on when.
Well it might.
You start over.
Which which are indications youre going to target.
So I'll handle that Jim.
We're we're looking at a number of opportunities we.
We know we want to hopefully be in a phase II trial in the second half of next year.
We have a short list we've engaged a number of.
Experts in various areas.
And.
I think once we understand what the the full clinical program would need to look like for each of the possible indications.
We'll make a decision about how we're going to approach the clinic, obviously, we'll need to understand the cost of of what it's going to take.
Take to advance these programs and.
And we'll talk about this.
I'm, hoping that we'll be able to give an indication to our investors some time, probably the first quarters.
No later than the second quarter of next year, and how we plan to advance into a phase II program, we've given some indication on <unk> and radiation neuropathy already but.
Fatty liver disease, nonalcoholic fatty liver disease were still evaluating that as well as.
Additional possible.
Inflammatory disorders that.
We have an opportunity to consider.
That's helpful. Yes.
Yes. It is thank you very much. Thank you for taking my questions.
Yeah.
The next question comes from Jason Mccarthy with Maxim Group.
Hey, guys, it's Michael <unk> on the line for Jason Thanks, So much for taking the questions.
Hey, Mike.
So I'd like to look at as we're moving into that first.
One b to a readout with mirror, Panama, one where youre getting the absorption data.
What is the DSM see looking forward to progress to the second cohort is that just the absorption or are there any other signals.
That we'd be looking for that wouldn't have been uncovered by the previous body of data.
And infection control.
Let's go ahead Vince.
Okay.
The southeast.
Primary is the number one thing, but then looking at are we seeing things that puds.
To the drug in this population model pain observed in love and they have a population understanding that this population is very different the bone marrow transplant population.
Is the number one thing the absorption if they when they look at that information if there's any absorption that will help to determine whether that could be sufficient to potentially impact the pharmacokinetics and efficacy if the antibiotic in the next cohort because as we've talked about before it's not metabolized.
<unk>.
We've actually just recently.
<unk> had some in vitro data.
That in pause mode, that's absolutely it doesn't do anything to my opinion.
The <unk>, primarily and then whether or not the levels of four would be sufficient to degrade.
The next antibiotics.
And the same set of in vitro experiments that we've done we've looked at this.
But antibiotics and so we have a sense of what level.
I have an effect on antibiotic and at the moment the levels that we've observed previously.
And.
In clinical trials, all exceedingly low and the levels that we would anticipate if any.
Population in bone marrow transplant population.
And that they should not be a problem.
But that's what we need to and that's why we're running this first cohort to evaluate that to make sure that in this patient population would be impaired barrier function, but we still have low absorption in that won't affect the efficacy of the systemic antibiotics.
Alright, thank you.
And then so following that readout, which we're expecting in the first quarter.
What are you thinking on the timelines for the subsequent two cohorts.
So the timelines or the subsequent two cohorts of patients in this cohort.
So it is being driven so we're going to have to evaluate over the course over the next few months, what we can legitimately you expect in terms of the.
The enrollment rate at Washington University for the patients that are coming in.
Now the critical piece that Theres, obviously since the next antibiotic.
And the study is something that can be metabolized by us in a hole.
And so we want to make sure that we are able to get in MF patients.
Number of patients to make sure that we can actually see if there is one.
So I think.
It's hard to give an answer because we cant pin down exactly the enrollment why.
Go through on a bone marrow transplant is very much dependent on the patients and the needs, but I would not expect it to go significantly faster than the current cohort.
We want to use the current cohort I think because as a baseline for the projected enrollment.
Alright, Thank you very much and then just.
Wanted to ask one more.
Follow up on this.
On the <unk>.
Specifically about <unk>.
What sort of.
That side in those later cohorts, where you might get some initial efficacy data.
What effect size, you would consider sufficient that you would be able to bring this to the FDA and discuss moving straight into a.
Pivotal because I know, you've previously mentioned that as a target.
So we want to leverage not just the delta here, but all previous Tor.
And all.
All the patients that will be in your mind and looking at the city Hall.
It is really to look at the microbiome outcomes safety above all on pharmacokinetics, because together an effect size on something like a GBP I'd stay obviously, we made significantly more patients from 12 per cohort.
It's going to be to drive us, but it's going to be very much I think safety PK and to some degree biomarker driven and also leveraging our previous experience, where we can show that.
<unk> stops the metabolism of antibiotics simultaneously stops preserves the microbiome things are the kinds of information that will be needing to put together I think to the FDA to make that argument because we won't have enough patients in this one.
We absolutely stop Gvhd. Its model study that's designed to give a catheter alcohol comments a study that's designed to give us indications on safety and utility moving forward.
Alright, Thank you very much for answering my questions.
Okay.
Thank you now I would like to turn the conference back over to Steve Shallcross for any closing remarks.
Thanks again, everyone for joining us on the call today, where as you can see very excited about the progress we've made and I can assure you. There is there is a lot more excitement to come.
We look forward to keeping you updated have a great night and have a great weekend.
[music].
Yeah.
[music].