Q3 2021 CohBar Inc Earnings Call
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Good afternoon, My name is Chuck and I'll be your conference operator today at this time I would like to welcome everyone to cobalt <unk> third quarter 2021 financial results Conference call. All lines have been placed on mute to eliminate background noise should you need assistance. Please signal conference specialist by pressing the star key followed by zero after today's presentation there.
There will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad and towards draw. Your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to MS. Jordan Suraj <unk> director of Investor Relations at Khobar. Please go ahead.
Thank you Chuck and thank you everyone for joining call by a third quarter 2021 financial results Conference call. Joining me on today's call is Joseph Goodbye as Chief Executive Officer, Ken Cundy, Chief Scientific Officer, and Jetblue and El Cubo, Chief Financial Officer called by financial results Press release was issued earlier today and they would be.
Downloaded from our website I'll call by Dot Com.
Joe will begin with an introduction followed by an update on our T. V 50, 138 deaths III program from Cat, Jeff will then provide an overview of the third quarter financial results, we will conclude with Q&A.
Before we begin I'd like to take a moment to remind listeners that the remarks on today's conference call May include forward looking statements within the meaning of the securities laws.
These forward looking statements include but are not limited to statements regarding the company's business and financial strategies plans and expectations for its pipeline product candidates, including its lead C. B 42, 11 drug candidate program, the therapeutic and commercial potential of the company's pipeline product candidates, including its lead drug candidates.
See before your 211 and other mitochondria based therapeutics.
Statements about the company's ability to provide patent protection for its program.
Potential lifting of the C. B 42, 11 patents in the Fda's Orange book statements regarding ongoing and planned research and development activities.
Including ongoing and planned clinical trials and regulatory status and strategies and the timing of announcements and updates relating to our clinical trials and related data.
Potential partnerships and our capital resources financial and operating performance and ability to fund our operations forward looking statements are based on current expectations projections and interpretations that involve a number of risks and uncertainties that could cause actual results could differ materially.
As anticipated by Cobra. These risks and uncertainties are described in our registration statements reports and other filings with the Securities and Exchange Commission and applicable Canadian Securities regulators, which are.
Are available on our website at cobalt I come at SEC, Gov, and SEDAR Dot com as.
As long as in the Safe Harbor statement included with today's press release.
You are cautioned that such statements are not guarantees of future performance and that actual results may differ materially from those set forth in the forward looking statements.
<unk> does not undertake any obligation to update publicly or revise any forward looking statements or information, whether as a result of new information future events or otherwise.
Now I'd like to turn the call over to Joe Stare at Cabos, Chief Executive Officer, Joe.
Thank you Jordan and thank you everyone for joining us this afternoon.
Last quarter for Khobar was quite eventful, we made significant advancements across many areas of our business, including the achievement of a major milestone the positive data read out from our first human study.
We also strengthened our human capital with the addition of two new Board members Carol mast and Dr. Joanne yet they each bring a wealth of relevant industry expertise and we were fortunate to have them as part of the Khobar team welcome Carolyn Joanne Nicobar.
In addition, we recently completed a financing that extends our operational runway and allows us to continue to advance our pipeline.
We believe that the fundamentals of our store you have never been better and we're excited for what lies ahead.
Cobalt is a leader in harnessing the power of the mitochondrial genome to develop novel peptide therapeutics.
Although people tend to think of mitochondria, primarily in terms of energy production. They also play a much broader role in the regulation of a variety of biological pathways.
As part of this process many of the peptides encoded in the mitochondrial genome are secreted outside of the cell and entered the systemic circulation, where they have important impacts on other organs and tissues.
We believe that our approach of tapping into the tremendous power of the mitochondria has the potential to provide valuable new treatment options for physicians and dramatically improve the lives of patients. Our purple line is focused on chronic conditions with significant unmet medical need and our most advanced programs are C. B 42, 11 under development for the treatment.
Non alcoholic Seattle, hepatitis or Nash as well as obesity and C. P. 50, 138 S. Three which we believe has the potential to treat a variety of fibrotic diseases with an initial indication of idiopathic pulmonary fibrosis or IPF.
With that background I'd like to discuss each of these programs in more detail.
In August we announced positive topline data from a multi centered randomized double blind placebo controlled phase one a one b trial of TV 42 11.
Well, we review the results in detail during our last quarterly call I think it's worth reiterating the key takeaways from the one b portion of the study.
First the study met its primary endpoints are safety and Tolerability with no adverse events occurring in more than one subject in the C. V 42, 11 group other than transient injection site reactions.
This clean Tolerability profile is not only an important derisking outcome for this program, but it is also a validation of our broader hypothesis that analogs of naturally occurring mitochondrial peptides will have fewer off target effects than drug candidates developed from non natural sources.
In terms of efficacy, we saw robust and significant improvements in both L. T N. A S T which are markers of liver damage in subjects treated with C. B 42, 11 compared to placebo.
And these key biomarkers are reflective of decreased liver inflammation and improved liver health.
5% reduction in a L. T seen with C. B 42, 11 treatment versus placebo compares favorably not only when compared to other four week studies of potential Nash products, but also when compared to similar time points from longer longer studies of assets currently in phase III development for Nash.
In fact, the level of L. T reduction seen in 27% of the subjects treated with C. B 42, 11, how do we use the level of reduction that is predictive of potential Nash resolution.
Very encouraging result, after just four weeks of treatment with C. B 42, 11th.
We also demonstrated a significant decrease in glucose in the C. V 40 to 11 group compared to placebo, even though only one of the 20 subjects in the trial with diabetic.
We believe that this results combined with our preclinical data unapproved insulin signaling is particularly promising in light of the fact that almost 50% of Nash patients who have diabetes is a comorbidity.
Additionally, subjects treated with CB 42, 11 exhibited a trend towards weight reduction.
Finally, we saw substantial reductions in liver fat content in both the active and placebo groups.
We believe that similar level of liver fat reduction in the placebo group is due to the fact that subjects were confined for the duration of the trial and were provided a healthier diet then they were eating prior to enrolling in the study.
Keep in mind that is slowing and reversing of the liver damage related to inflammation and fibrosis, not decreasing liver fat in and of itself that is the ultimate objective in treating Nash patients.
Notably despite the similar reductions in liver fat between the two groups only the C. B 42, 11 arm demonstrated the improvements in markers of liver inflammation and glucose metabolism that I mentioned earlier.
After we announce these results we were selected for a late breaker poster presentation at the American Association for the study of liver diseases or a S. L D, which was held last week.
Lead author on the poster was doctor where heat limber, one of the leading key opinion leaders in the Nash field and the poster provided additional data in context for the study.
Finally, our C. B 42, 11 program gained additional momentum on the IP front due to the issuance in September of our foundational U S patent covering the composition of matter of our peptide and related peptides as long as the methods of use including me used to treat Nash.
Determined this new patent extends to at least 2037.
And the events that CD 42, 11 is approved as a therapeutic in the U S. The new patent would be eligible for listing in the FDA Orange book, which is an important further barrier to generic entry.
There are also a foreign counterparts of this patent that are currently in the patent prosecution stage in multiple countries throughout the world.
Taken together these developments reflect significant advancement in our Nash program. We believe that the study results clearly demonstrate that C. B 42, 11 has a meaningful impact on disease and shows great promise in the treatment of patients with Nash.
We have been meeting with key opinion leaders and other experts to determine the most appropriate design for a longer duration phase Iia study in an outpatient setting.
We have additional formulation and preparatory work to do before such a study could begin.
Given the large expense and long lead lead long timelines associated with developing assets for the treatment of Nash our preferred path forward with this program would be in the context of a partnership and we have been discussing our recent clinical data with potential partners.
Now this represents a very large opportunity for co bar and is estimated to impact up to 30 million people in the U S alone with the potential market size in the tens of billions of dollars.
Well no drugs have been approved to date. Many expect the combination therapy is likely to become commonplace due to the complexity of the disease.
We believe C. B 42, 11 is well positioned for use in combination regimens due to its unique mechanism of action and demonstrated synergistic effects in preclinical models with other potential classes of Nash drugs, including G. L. P. One agonists.
I'd now like to turn to our second clinical candidate CB 50, 138 S. Three which is a peptide with broad anti fibrotic and anti inflammatory properties that we are initially developing for IPF.
Idea, if it's a progressive respiratory disease of unknown cause that generally impacts adults over the age of 50 and it's more common in men.
Initial symptoms typically include a persistent cough shortness of breath and fatigue.
Well of course of disease varies considerably between individuals'. The mean survival. After diagnosis is only two to three years, which is worse than most cancers.
Unlike Nash there are two currently approved drugs to treat IPF, but many patients are unable to tolerate them theater, gastrointestinal and photosensitivity side effects.
Current treatment can delay some of the loss of lung function outcomes remain poor and patients continue to experience significant morbidity and mortality. So there's a pressing need for novel therapeutics with better efficacy and improved safety profile.
Despite the limitations of the drugs currently on the market each has annual sales exceeding $1 billion per year.
Ken will say more about our C. B 50 months or D. H S. Three program in a moment, but we believe that this peptide has the potential to address the significant unmet needs that IPF patients currently face.
Yeah.
Given the tremendous promise of both of our clinical candidates. We recently completed a $15 million public offering which added much needed capital to our balance sheet to enable us to continue to advance our pipeline.
Our recent positive clinical data from C. B 42, 11 gives us even more confidence in the power of the approach that we're taking to novel drug development.
With the additional funds combined with our previous cash balance we are now well positioned to continue to progress our pipeline and are particularly excited about our plans to initiate our first in human study for C. B 50, 138 S. Three next year.
I'll now hand, it over to Ken who will review, our IPF program, including an update on our current thinking regarding the potential study design Ken.
Thanks, Joe.
50, 138 analogs are a family of peptides that are showed strong anti fibrotic and anti inflammatory properties in multiple in vitro and in vivo models of I P F.
So the studies conducted in cultured human lung cells. These peptides appear to work by reducing the production of key proteins involved in fibrosis and by inhibiting the pathological fibrotic process of cell transformation from healthy low cells to fibrotic cells.
We've also demonstrated that several of these improved analogs have clear anti fibrotic and anti inflammatory effects in an in vivo animal model of Ips.
In the more challenging therapeutic mouse model, we showed that treatment of animals, beginning one week after induction of fibrosis with bleomycin had positive effects on all study outcomes, reducing the low fibrosis levels of collagen cytokine secretion and the inflammation.
A number of these study effects were greater than the effects seen on those parameters in the same study following treatment with Nintendo.
Of the two approved drugs for I P S.
C. B 50 138, three is based on a natural peptide. It has the potential to have an improved safety and tolerability profile, which as Joe mentioned would be an advantage given the relatively poor tolerability of the currently approved drugs.
Since we announced the selection of C. B 50, 138, three is a new clinical candidate in March we've been conducting the necessary I N D, enabling activities in preparation for filing an IND D in entering the clinic in 2022.
Once we submit the final M D and get approval from FDA to proceed our initial goal will be to examine the safety Tolerability and pharmacokinetics of <unk> 50 138 three in.
In healthy adult subjects, we expect that will involve testing several ascending doses of CB 50, 138, three given subcutaneously as single dose and seven day multiple doses.
Our objective will be to identify the most appropriate dose to take forward into subjects with Ips.
And we continue to discuss the most appropriate development path for CBE 31, 38, three for IPF with key disease area experts like Doctor Toby Mayer Professor of Medicine, and director of interstitial lung disease at the Tech School of Medicine at the University of Southern California.
And ducked enough totally kaminski, who is chief of pulmonary critical care and sleep medicine at the Yale School of Medicine. They are on the cutting edge of studying the IPF disease process and waste slow its progression.
Been involved in the development of other IPF drugs and have a clear understanding of how to design proof of concept studies.
Based on their input we believe it may be possible to conduct an initial all week proof of concept study of <unk> 50, 138, best III in IPF patients.
Well that was studied design cannot be finalized without input from FDA. This type of early proof of concept study in IPF may look at certain key biomarkers of the disease as well as biomarkers related to the effects of <unk> 50, 138 deaths free seen in animals.
The details of the potential Biomarkers, it's still under discussion dose selection in healthy subjects and a proof of concept in IPF subjects could potentially be evaluated sequentially in one single phase one two a study design.
We will be working to further define our study protocol and plans to request FDA input on our proposed design.
In summary, we believe the preclinical efficacy data for <unk> 50, 138, that's three look promising. This is the second program to be nominated for clinical development from our novel Technology platform.
And it would be a major milestone for the company we have two clinical stage programs next year.
We look forward to updating you on our progress with this program on future calls.
With that I'll return the call to Joe.
Thanks, Ken.
I'd now like to ask our CFO, Jeff <unk> to walk you through our third quarter financial performance Jeff.
Yeah.
Thank you Joe and thank you everyone for joining us. This afternoon I will now provide you with a summary of our financial results for the third quarter ended September 32021, compared to the third quarter ended September 32020.
Total operating expenses in Q3, 2021 were $3 $4 million as compared to $2 $6 million in Q3 2020.
An increase of approximately $800000.
Research and development expenses were $1 $6 million in Q3, 2021 compared to $1.2 million in the prior year period, an increase of approximately $400000.
The increase in research and development expenses was primarily due to the costs associated with the continuing development of our peptides.
Partially offset by a decrease in stock based compensation costs.
General and administrative expenses were $1 $8 million in Q3, 2021 compared to $1 $4 million in the prior year period, an increase of approximately $400000.
The increase in general administrative expenses was primarily due to higher stock based compensation costs.
For the quarter ended September 32021, cobalt reported a net loss of $3 4 million or five cents per basic and diluted share compared to a net loss for the quarter ended September 32020 of $3 $2 million or six cents per basic and diluted share.
Net loss included noncash expenses of approximately $700000 for the quarter ended September 32021.
And $900000 for the quarter ended September 32020.
Excluding the noncash expenses Cobalts net loss was $2 $7 million for the quarter ended September 32021.
As compared to $2 $3 million for the prior year period.
Moving to the balance sheet as of September 32021, Gabor had $15 million in cash and investments compared to $21 million as of December 31, 2020.
The cash burn for the quarter ended September 32021 was approximately $3.3 million.
During the quarter during the third quarter of 2021 and subsequent to the quarter end cobalt realized gross funding of $19 $6 million from its recently completed public offering sales of its common stock under its ATM program and from exercises of warrants and stock options.
We estimate that based on our cash and investments balance as of September 32021, and the proceeds from the recently completed public offering we have sufficient capital to finance our operations into the second half of 2023.
And I'll now turn the call back over to Joe Joe.
Thanks, Jeff.
Before we take your questions I'd like to highlight our key areas of focus for the remainder of this year and the beginning of 2022.
First we are continuing to optimize the formulation for C. B 42, 11, while also working on the design of a phase Iia study.
In addition, we continue to have discussions with potential partners, who have an interest in the Nash space and we'll be speaking on a panel at the fifth annual Nash Summit next month.
Are there major focus is continuing to advance the ongoing IMD, enabling studies for <unk> 50, 138 S. Three for IPF.
We remain on track to file the IND and begin our initial clinical study for this program next year.
As Ken discussed we are also working with Kols to finalize the design for this first human study.
As you can see from today's discussion the fundamentals of the company have never been stronger.
We have been leveraging the extraordinary power of the mitochondria and the broad role. It plays in biology to develop a whole new class of drugs that have demonstrated potential therapeutic activity in a variety of disease models.
With the recent positive clinical data on C. B 42, 11, our expanding IP position the progression of C. P. 50, 138, gosh three towards the clinic and a strengthened balance sheet. We believe that we are well positioned to continue to advance our goal of developing novel products with clear clinical benefits.
I would like to thank our shareholders for their continued commitment and support which has been instrumental in enabling us to make the progress that we have made to date Chuck.
Chuck can you. Please open the line for questions.
Yes, Sir we will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
And the first question will come from Kristen <unk> with Cantor Fitzgerald. Please go ahead.
Hi, good afternoon, everybody. Thanks for taking my question, maybe just to start with your late breaker at a a S. L. D could you walk through some of the new findings you presented and it looks like on the poster you provided a lot more details around baseline assessments. So curious if you plan to evaluate some of the Chi.
Angel across these additional measures with CB 42, 11 post treatment to see how this may correlate with some of the other effects observed.
Ken you want to take that one yeah sure. This is Ken yes, the I S. L. D poster started with.
Really reiterating what we had announced before with respect to the substantial reductions in the L. T. N. Asp's. So that was the total we clearly provided in depth information all including the time courses there, which are obviously are supportive of a continuing decline in L. T N. A S T that one might expect too.
Go further as we do longer studies. In addition, we also of course are presenting the data on the glucose change and the trend towards body weight reduction in the CD 42, 11 treated group compared to placebo the new data in the poster is basically the additional information on the characteristics of the subjects that baseline.
And their baseline biomarker values across a longer list of additional biomarkers evaluated in this study there is ongoing analysis for the study of these additional biomarkers and any correlations there might be between those we'll obviously update when we have more to say about that.
Yeah.
Great. Thanks, and as you're looking ahead at next studies wanted to ask if you anticipate making any protocol changes related to the healthy diet confinement in light of the liver fat effects that were also observed in the placebo arm and even if that's not the case as you are potentially looking for the trial to be much longer.
Is there a time, where you might expect to see a separation if at all from these two arms.
Yeah with respect to the next study we would do we would not be using and find that subjects. The way. We did in this or study. This was really the product of two things one is the the need to observe injection sites. Following the initial phase of the study where we had improved our formulation to a.
Overcome persistent local injection site that position, but also because of Covid and we envisage any you know future studies phase two design, we would embark haul would be an outpatient setting.
Oh, Hey, thanks for taking my questions.
Sure.
The next question will come from come from Kumar Roger with Brookline Capital markets. Please go ahead.
Thanks for taking my questions.
So with regard to the partnership for the Phase two trial.
How far are you in those.
One of the considerations thumbs up.
Protruding part of it the thought partnership part of moving forward.
But by yourself.
Okay.
Thanks Gar great.
Great question. So you know in terms of the partnership discussions you know as you know we announced the positive data from our see.
Before that you'll have in trial in August and were now coming off the heels of the S. L. D. A poster presentation that that Kansas was speaking about so we think that combined with the developments on the IP front.
<unk> positions us well to continue to progress discussions with interested parties.
You know as you as you know it's always kind.
Difficult to predict sort of how long those discussions are going to take so it's hard to provide a whole lot more context than that other than to say that we're we're having those discussions in terms of the considerations about you know partnering now versus moving forward on our own you know again that that really it's a complex decision that that is.
Is related to you know how those discussions are going what potential you know terms might be available in a partnership and in sort of weighing that and what the partner might bring versus the risks of moving.
Forward on our own as we've mentioned earlier in the prepared remarks, just given the complexity of Nash as a field. We do think Ah you know all else being equal that the preferred path forward here would be a in the context of a partnership.
Okay announced or Youre seeing some cranes hearing obesity and Nash and also you have some preclinical data where do you have like.
Synergistic efficacy the G L P. One.
So how does that fall in in terms of like you know who would be a potential partner in.
And what kind of buyers.
We kind of get some more data in terms of obesity.
Yeah. So is the way we think about that are currently is is you know we did see though as you noted the trends in weight reduction in the 40 to 11 trial, which you know was it was just a four week study. So we didn't expect with just such a brief duration to see massive changes in body weight.
We think the best way to evaluate obesity.
At least at this stage is likely in the context of a subsequent trial in Nash, where there would be a longer duration of therapy, and a better opportunity to sort of see the effects of a body weight changes in the context of that sort of subsequent trial, which would then I think hopefully give us some additional data to figure out how to how to pursue our obesity.
You know I think that people that are looking at you know Nash it is as a space as you know it's you know Nash is a.
<unk> a disease associated with a variety of different metabolic are sort of just regulation, including obesity. So many of the you know people who are interested in Nash. We believe are also potentially interested in obesity as a as a potential indication, particularly you know people with Nash assets that are looking at.
You know drugs that have a potential impact on body weight and so.
You know there are some you know obviously people there are drugs currently on the market like shale. If you Wanna agonists that are being targeted for for obesity and so those those would be obvious.
You know potential opportunities for synergy in and partnerships as well.
Okay and in terms of why.
Why 13830, what did that remain to be done in terms of.
Filing Diane B.
Yeah.
Ken do you want to comment there.
Yeah. So as you as you're aware right. There's a process of a box checking with respect to construction of an R&D from a F. D. A review purpose then so we're in the midst of that we're not going to kind of parse that out and give updates on individual pieces, but I think on the next goal would be able to give you a better sense of where we are in that process.
Yeah.
Thanks, so much.
This concludes our question and answer session I would like to turn the conference back over to Mr. Joseph <unk> for any closing remarks. Please go ahead.
Thank you everyone for joining us. This afternoon, we look forward to updating you on our continued progress on our next call. Chuck would you. Please conclude the conference call.
Yes, Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Okay.
Yes.
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