Q3 2021 F-Star Therapeutics Inc Earnings Call
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Good day and thank you for standing by welcome to the S. Four therapeutics third quarter 2021 earnings conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
If you require any further assistance please press star zero.
I'd now like to hand, the conference over to your speaker today, Mr. Lindsay tricky basically I hadn't been.
Hi, Good morning, everyone. Thank you for joining US with me today is Elliott Forrester, our CEO and Darlene Deptula Hicks our CFO.
We announced financial results pre market today for the year ended September 32021, you can access the press release on the Investor Relations page of our website at <unk> Dot com.
Before we get started let's quickly run through the forward looking statements.
Please note that as a part of our discussion today management will be making forward looking statements. These statements are not guarantees of future performance and therefore, you should not place undue reliance on them investors are also cautioned that statements that are not strictly historical constitute forward looking statements such forward looking statements are subject to a number of risks.
And uncertainties that could cause.
The actual results to differ materially from those anticipated.
These risks include risks and uncertainties detailed in <unk> filings with the SEC. The company undertakes no obligation to update any forward looking statements in order to reflect events or circumstances that may arise. After the date of this conference call.
With that I'll hand, the call over to Elliot Elliot.
Okay.
Thank you Lindsey good morning, everyone welcome and thank you for participating in <unk> third quarter 'twenty to 'twenty one earnings call.
Great to speak with you today and provide a corporate update or more screen another positive plus three months.
As well as reviewing this past quarter I'll also reflect on our first just becoming a public company.
But first our progress in this past quarter further demonstrates the successful advancement of our clinical programs and an important expansion of our partnering activities all in keeping with our financial plans.
It was a demonstration of our growing confidence in our most advanced program <unk> one more rate.
We're initiating a trial in checkpoint inhibitor naive patients with non small cell lung cancer on diffuse large b cell lymphoma.
As highlighted in our last earnings update this reinforces our belief in the program and its potential impact in larger patient groups.
Progress this quarter in <unk> 'twenty or first in class dual agonist SB 11, 285, all next generation Sting agonist all clinically encouraging.
And we're excited to make further progress in their respective ongoing phase one trials.
And while I will not be providing a specific update today <unk> is also progressing well through its phase one trial.
Yeah.
As important and further validation of our platform we've entered into a new license and collaboration agreement with Janssen biotech one of the Janssen pharmaceutical companies of Johnson <unk> Johnson.
Under the terms of the agreement <unk> will grant Johnson, a worldwide exclusive royalty bearing license to research develop and commercialize up to five novel bi specific antibodies using <unk> proprietary platform technology the.
The deals worth up to $135 billion, including a $17 5 million upfront payment and as wireless potential tiered royalties on product sales.
We're delighted to have Johnson is our newest technology partner joining back a G. A a astrazeneca and Denali therapeutics.
It's been almost a year since F star was listed on NASDAQ.
Since then in spite of being in the Covid pandemic.
Been resolute in our commitment to generate transformative immunotherapies for patients with cancer, having added three new programs into the clinic and we've also leveraged our platform and established partnerships with Astrazeneca and Johnson.
For next generation immuno oncology therapeutics in the clinic are directed towards some of the most promising immuno oncology targets in drug development, including like three on C. D 137.
We continue to strengthen the protection of our programs and platforms with over 500 patents granted or pending.
And finally, we've established a strong shareholder base with a new group of leading biotech investors joining the company and from a standing start we've attracted a gang coverage from seven respected analysts.
As a reminder, all bi specific antibody technology allows us to create two new additional and distinct antigen binding sites in the FC region of a natural human antibody, giving us a two plus two or tetravalent binding.
These two new binding sites allows simultaneous targeting of two different antigens and importantly enable a unique set of pharmacology that we called the three CS.
Cross linking confirmed the bridge between two cells or not.
Our platform has architecture to perform this function with great effectiveness.
Clustering is needed for our chosen receptor targets to elicit that pharmacology and by balancing affinity with avidity, we believe our tetravalent bi specifics are amongst the best in class.
Finally, with respect to competition Ality, the third C for a potent bi specifics, we only want the pharmacology to happen in the right place. Therefore conditionally active molecules delivered that affects only where both of the cancer targets can be gauged simultaneously focusing their activity in the tumor.
<unk> environment.
All of this means our platform enables the prospective design of natural full length human bi specific antibodies for safe potent immune activation in the tumor.
And with so few changes to the natural human antibody format with the additional benefit that our manufacturing process is straightforward, giving antibody like yields instability.
As you can see on slide six we continued to expand our intellectual property estate, which now includes over 500 granted and pending patents all relating to our possible in technology and product pipeline.
We have an exceptional team that has the experience to deliver with our existing differentiated and protected technology.
On slide seven we show the whole portfolio, including our two new partners Astrazeneca Johnson.
Bringing the total potential remaining value of our.
Our partnerships to over $2.2 billion.
Moving to slide eight and starting with our most advanced asset the first in class F. S woman eight.
You'll recall that when I talk to clinically validate it inhibitory checkpoint.
P D L. One on luxury.
As proof of concept trial is ongoing and checkpoint failure patients with PD, one and PD L. One acquired resistance in head and neck cancer. This study is progressing well and despite the pandemic, we're anticipating a preliminary clinical efficacy readout in mid 2022.
Additionally, we're initiating a clinical trial and checkpoint inhibitor naive patients with non small cell lung cancer in diffuse large b cell lymphoma to expand the opportunity for F. S woman eight we're excited about the prospects respiratory culminate in both checkpoint failure on checkpoint naive patient settings and look forward to updating.
And due course.
<unk> two is designed to target a wide range of patients, including those with low PD lone expressing tumors and benefits from all of the differential it's just about platform technology.
Our first two tier twos Chew truth agency against both the co Stimulatory C D 137, and the inhibitory PDL one targets.
We believe this will provide clinical outcomes that separates us from the competition.
Phase one trial continues as well and will provide a clinical update at the end of this year.
F S. One 'twenty angst to improve checkpoint inhibitor and chemotherapy treatment outcomes for patients and it's tumor type agnostic.
Stimulates ox 40, CD 137, two key targets found on the surface of T cells.
In preclinical studies <unk> hundred 20 generates a triple immune response in the tumor microenvironment that includes C. D. Four C D eight in T Reg cells.
During the asthma obesity as Paas.
October we provided a phase one trial in progress update on F. S 120.
Today, we're pleased to report that <unk> hundred 20 has cleared the accelerated dose titration phase and is well tolerated to date.
And Moreover, whilst we're not ready to share data details, we're encouraged by Uli emerging pharmacology in patients from the ongoing clinical trial and.
And these are in line with the Triple immune response mechanism of action.
We're excited to continue the progress of <unk> 20 in the clinic, we plan to initiate a study of <unk> in combination with pepper listen about next year and will present preclinical data on this mechanism of action at city later this week.
Earlier this year, we provided an interim update on safety Tolerability and pharmacokinetics of SB 11, 285 on next generation intravenously administered a novel Sting agonist.
Alone and in combination with tissue listen mob S. P. 11, 285 was well tolerated across five dose levels as a monotherapy and the three dose levels as combination.
Based on these positive emerging clinical data, we've continued with dose Escalations and further clinical update is planned for next year.
Before I hand over to Darlene.
Slide nine shows the multiple programs in multiple clinical Readouts. This coming period continues to promise to be one of the opportunities for both patients and shareholders alike.
Let me give you some highlights.
OXXO or around the end of this year, we anticipate the clinical trial update on F. S 222.
Next year, we plan to shake date or on F. S. Formulated in the acquired resistance patient population further updates on F. S. One 'twenty as you move towards a combination with keytruda preliminary efficacy data with <unk> two to two and.
An update on the continued clinical progress of SB 11 to eight five.
As you can see it's been a year full of accomplishments and we have an exciting period ahead of us made possible by the team at <unk>, who tenaciously pursue our goals in order to keep to the promises we make.
We're committed to continuous outreach to all the investment community and grateful for the Investor support that we've received to date.
It's been a pleasure to share this corporate updates you another good quarter and a good first year as a public company.
And with that I'll handover to Austria foe Darlene to give you an update on our financials Darling.
Thank you Elliot and good morning, everyone.
I'll now go through the financial results for the third quarter of 2021 as.
As Elliot stated, it's been another positive and productive quarter, we're confident our effective financial management provides a solid platform for executing on the company's strategy, including our significant clinical milestones in our expanding partnership collaborations we will be happy to take questions at the end.
Cash and cash equivalents as of September 32021 were $71 1 million. Additionally, we expect in Q4 can received a $17 $5 million upfront payment from Janssen biotech, resulting from our very recently announced collaboration.
We expect this will provide sufficient cash to fund our currently projected operating plan.
Multiple clinical milestones across all our programs through mid 2023.
Revenue for the quarter ended September 32021.
Was that $751000 as compared with $9 2 million for the same period in 2020. This decrease in revenue was due primarily to a reduction of $7 7 million of licensing revenue and point 7 million reduction in R&D services revenue.
Our revenue consists of collaboration revenue under our license and collaboration agreement with Merck K G. A a denali therapeutics Astrazeneca and most recently Janssen biotech which include amounts that are recognized relating to upfront payments milestone payment option exercise payments and amounts of <unk>.
Dorothy due to last for research and development services. Currently we do not have any ongoing R&D service reinsurance partners at those parts of the program have come to the end of the research phase and now transition to the milestone pace as expected. This is consistent with our collaboration strategy.
Research and development expenses were $5 1 million for the third quarter of 2021 as compared to $5 3 million for the prior year third quarter.
At this point $2 million decrease was due to an increase in clinical CFO costs of $1 $6 million, resulting from a full quarter of phase one clinical trial costs for <unk> 122.
Two T to SB 11285 in 2021 and at that point 9 million dollar increase in R&D staff related costs and point $3 million increase in lab consumables.
All of which were offset by a $2 3 million dollar reduction in the U K R&D tax credit and decreases in manufacturing costs of <unk> 4 million and other allocated costs of $23 million.
R&D expenses include $1 1 million of noncash based stock compensation expense for both the third quarter of 2021 and 'twenty 'twenty.
Total general and administrative expenses were $5 $2 million for the quarter ended September 30, 21, compared to $7 2 million payable third quarter of 'twenty 'twenty.
This approximately 2 million.
Dollar decrease is primarily due to a decrease in legal and professional expenses of $2 6 million, resulting from costs incurred in Q3, 'twenty 'twenty relating to the share exchange transaction with spring Bank Pharmaceuticals and.
And a decrease in staff related costs of <unk> 6 million offset by increases in rents and repairs at <unk> 5 million, which were primarily due to the cost of lease buildings acquired in the spring Bank transaction and increase in insurance costs of <unk> 5 million and other general administrative costs of $22 million.
G&A expense also included $4 million and $59000 of noncash stock based compensation expense for quarter, three 2021 and 2020, respectively.
Turning to net loss net loss for the third quarter of 2021 was $10 8 million or <unk> 52 cents per basic and diluted share compared with a net loss of $3 5 million or $1.88 per basic diluted share for the third quarter of 2020.
In closing.
Effective financial management continues to underpin the significant milestones for our programs in the clinic Elliott highlighted the multiple upcoming milestones with more exciting updates to come as we look ahead to the fourth quarter and beyond.
Courage by the interest and engagement from the Investor community and our unique bi specific platform.
We will continue to build on the really positive relationships. We've established during our first year as a public company and focus on delivering the potential of our tetravalent bi specifics for patients and investors.
With that we'll now open the call for question.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question first if alky. Please standby, while we compile the Q&A roster.
Our first question comes from the line of Hart H C from Oppenheimer and company. Your line is open.
Great. Thank you and thanks for a couple of questions on a very busy very nice update.
Oh wait I guess.
First one's progress.
It really is not just how you're doing against your own expectations, but other competitors around you by specifics are getting very busy but you know Bristol has presented more data when it's combination.
Telematic gave a little map. So can you just talk a little bit about what the insights gained from that in terms of FX 118.
And has that added to your certainty around adding non small cell lung cancer and <unk>.
Or I guess.
Fairly different tumor types.
118, and then in Fas 120, you indicate that you got past the accelerated.
Dose escalation pretty quickly.
Could you just sort of give us an update as to you know aside from data presentations what will be the next steps there in terms of your clinical.
Strategy and when we could expect an update there. Thank you.
Hey look thanks, very much for the questions and for joining US today, So with respect to our first one yeah sure I mean, we as you know has got a twin tracks chatterji with with Walmart. The first is is it kind of fast track to market through that.
Refractory group of patients who've been pre treated with a checkpoint inhibitor and as we were looking at the emerging data not just from BMS, but from Regeneron and others and of course continue to look at data internally we.
Grew in confidence that we can find a route.
Into the checkpoint naive marketplace.
It will allow us ultimately potentially to leapfrog some of the other players in the space and in particular as you'll recall from prior conversations we're focused on the co expression of luxury and PDL, one and not being a marker for activity and we continue through non small cell lung cancer and <unk>.
Large b cell lymphoma to believe.
To a potential route to success in these much larger patient populations. So yes, we and of course, we continue to monitor.
And we're excited to see any updates.
Arise as we go forwards.
With respect to FX, one 'twenty, you look where I'm as I noted.
We're excited to see the emergence of some really interesting pharmacology data in the clinic.
Very much in keeping with that we showed at ESMO and our recent posted and we'd expect it to come along from those preclinical data we've been establishing so PK isn't keeping on the in the data. We have seen is very much in keeping with that.
Triple immune response that I described briefly in the in the presentation.
The next steps for it of course, our expansion into the three plus three cohorts and we're moving as quick as you call them and certainly over the next six to nine months to start a combination study with pepper. This is Bob.
Because although non clinically F. S. One 'twenty did certainly have some mono therapy benefits, we saw a real synergies either in the combination with the PD L. One and really interesting and some of this thinking has begun to emerge very broadly through ESMO.
The use of a combination with chemotherapy and so we're excited about both of those but we're going to start with with Pembroke Keytruda.
Keytruda, which is supplied under agreement with MST.
In the.
And next in 2022, so we're moving forward to that but but really I'm really excited about what we're seeing so far.
Great. Thanks, and then just a quick follow up for Darling in terms of your Opex.
Tight this quarter your programs keep on wrapping up I'd tell you any thoughts of how we should be thinking about next year, I mean, not guidance, but just any kind of color.
On the Opex evolution. Thank you. Thank you for all the questions.
Yeah, I think the way I would think about that hi, Charles. Thank you for that question is you know as we get as these programs move along through the clinic, we've got one in a phase two three in phase one.
As we move into kind of the latter half of next year. The towards the end I would expect to see some of these expenses start to ramp as we are as we move these things along further.
But I think for kind of the 12 months timeframe is here, where we're yeah, we won't quite see that ramp yet as a kind of start next year.
Great. Thank you.
Your next question comes from the line of Dana Gray Bosch from SBB Leerink. Your line is open.
Hi, Thank you for the question I Wonder if you guys had a chance to review the Merck lack data that's going to be in an oral at city are they saw pretty interesting signal if they're lagging hambro.
Frontline lung cancer T M B hi.
And I just wonder if you had any reflections and if you've been looking at T. M D and your previous studies are planned to look at it in your S. One when he said he's going forward.
Hey, Dana nice to speak with you and thanks very much for the question.
So we haven't taken a close look actually at those Merck luxury data yet.
But we certainly obviously would be interested to see that correlation with with Pembroke and.
See how it.
<unk> is out.
And in terms of.
And a mutation button of the different patient populations, we look at.
They're all.
There are groups of patients that were that we are interested in from a specific T. M b set but we've not disclosed.
They all and.
And we are continuing to look at them.
In what ways in which we can examine patients from from that.
Different subgroups.
Not to give the game away by saying anything so for instance, as we've moved towards non small cell lung cancer.
And with the L. P C L.
We're looking for particular pez of Biomarkers in in those settings that would directly to those patients as opposed to the kind of more agnostic T. M. B high patient set that we would that we would typically.
Think about in immuno oncology.
So it's it's a kind of more precise approach with respect to the Merck data frankly, you catch me a little bit Cold Mountain and we will just need to take effect as we see it.
Well I think we'll all see more detailed data actually got so I'll have to ask you alright. Thank.
Thank you.
Next week.
Right.
Thanks, Dana nice to talk to you.
So that weekend.
Your next question comes from the line of Justin Walsh from B Riley Securities. Your line is open.
Hi, Congrats on the progress and I think we've all seen companies claim plug and play versatility, but whats your pipeline in collaboration agreements. It seems that the platform is delivering on the promise of rapid drug discovery can you provide some additional color on how you approach early discovery efforts and how your platform facilitates this.
Yeah sure so I mean.
I think we.
I have not made as much as we should in the past about the adaptability.
And versatility of the platform, but I think.
To some extent the the Johnson at deal, adding to Mark Hey, Jay and Denali I'm really speaks to the wide range and in particular of course Denali.
In CNS versatility, we've got three programs.
In the clinic from the platform.
Leave Mark Hey, Jay about the publish on.
Something that will emerge from our collaboration with them at Citi.
And we're really excited about what's coming in.
In the future I think the real benefit however is not just the kind of volume.
Programs that we produce but we continue to be able to deliver more.
Closer to like a scaled in terms of manufacturing really stable molecules.
Through that natural IGT formats as you know.
And then one of the things I think is becoming really important and the Bispecific world is a relative affinities versus avidity.
Cross linking and clustering setting and and one of the real strengths that we have which of course, we've protected with around 500 granted or pending patents is our ability to create those finely tuned molecules.
And the molecule Havent give much of an update on today F. S. 222, I think exemplifies that tuning really really well and as we see data emerging I'm sure, we'll be able to reaffirm the.
Power of the plug and play mechanism and we continue to be excited by the occasional partnership which is right for us and rightful for a third party like the one we just announced with with Johnson.
Johnson.
Got it and one more quick question from me are there any specific takeaways that we should be looking for in your city presentations I know, we want to have any new clinical data, but what should we be on the look out for.
Yeah, I think I think that's more of a kind of a forward look.
As you know just because we've talked to you. Many times about this one of the things that we do is we model using whole immune systems are all of the programs and we look at you know immune response PK P. J relationship we're looking at Biomarkers.
And and so on.
And.
We look to reflect that in F. S. One 'twenty has really begun to reflect.
Progress with respect to to those models, we've seen a as I've kind of hinted that during this presentation. So the city poster we've got relates to a forward looking.
Our plan with respect to the combination with Penn religion mob in F. S 120, but I cant help and not use the opportunity to kind of advertise.
F S. One minute a project leader in head of Biology, Michelle Morrow is at a roundtable discussion.
Unlike three a city as well.
And those of you who are there or can tune in a police do it'll be something excellent to go with your Sunday.
Sunday roast.
Perfect. Thanks for taking the question.
Pleasure, Thanks, Justin I Sylvia.
Again, if you would like to ask a question press Star one if you would like to meet you. All your question press the pound key.
Your last question comes from the line of Yale Jen from Laidlaw and company. Your line is open.
Yeah.
Okay.
Hello.
Yes.
Yes, well if you're speaking you may be on mute.
Hello can you hear me.
Got you yeah, yeah, sorry about that.
I apologize.
And in terms of all one thing that.
In non small cell lung study have you got to reveal.
Will it be die.
A little more color on that.
Yeah.
No we haven't to date, where we're in the process of initiating that.
That study in Europe, and I think as soon as we are through.
Some of the regulatory.
Processes, which are going very well it will we'll declare it will expose them as we usually do with respect to clean trials Dot Gov.
At the level that we that we post that but but no. Other details at this time I'm afraid Joe.
Okay. That's fine and then maybe a question for Charlie.
Third quarter R&D expenditure, certainly was much lower than the second and the first.
Year.
What has been the major differences in there and if you anticipate or in the third quarter.
The figure could be a norm heading into.
The last quarter of this year.
Yeah. So thanks for that question, maybe let me take G&A expenses for first I guess, if you are comparing them quarter over prior year quarter. Just remember this time last year was when we were working on this spring bank transaction. So we had a lot of professional fees.
Fees associated with that so that that's clearly not the norm, where more and more of them going forward.
So you kind of look at Q3 in 2021, that's more the norm going forward.
So again, a lot of a lot of sort of one time expense a year ago.
The other thing earlier this year in Q1 of this year manufacturing costs were higher because we had our R&D costs were higher because we had a light manufacturing batch in there those don't happen every month, but they do happen you know.
Periodically so there'll be some there always be a little bit of up and down.
In different quarters, but I would think that.
Kind of annualize this year to date that would that's how I think about it as far as the next couple of quarters out.
It is out.
Does that help okay.
Oh, yeah, absolutely that's very helpful.
So again, congrats on the progress and look forward to speaking to you guys soon.
Great. Thanks, so much.
Yeah.
There are no questions at this time I would now like to turn the call over to Mr. Elliott Foster for any closing remarks.
Great well. Thank you everyone for joining us this morning, and thanks for those questions. We've had another good quarter and a good first year as a public company as promised we've delivered on our corporate goals Ottens clinical strategies, and then U S woman I trial has huge potential for patients.
I'm personally excited about the emerging pharmacology data from patients in F. S 120 trial and the other two clinical stage programs have progressed well over this period to new partnerships with Astrazeneca Johnson highlighted highlights and our strategy for capitalizing on non core assets.
With a strong cash runway, we're excited to be on track to deliver many more clinical milestones over the coming months.
And finally, I'd really like to thank the <unk> team our partners and our shareholders for your support I would also like to thank the patients participating in our trials and our expert clinical investigators.
We're United behind our mission to develop next generation Immunotherapies to transform the lives of patients with cancer and I look forward to sharing our successes with you every step of the way. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Okay.
Okay.
Okay.
Okay.
Right.
Yeah.
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