Q3 2021 Brickell Biotech Inc Earnings Call
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Greetings and welcome to the Brickell Biotech Inc. Q3, 2021 financial results Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.
I will now turn the conference over to your host Garth Russell with lifestyle Advisors you may begin.
Thank you and good afternoon, everyone. Joining me on today's call are <unk>, Chief Executive Officer, Rob Brown, Chief Financial Officer, Marshall, Chief Medical Officer, Monica, Lewke, Chief R&D Officer, Deepak Chadha.
And Chief operating Officer, Andy Squalor.
Before we begin I would like to remind everyone that this conference call and webcast contain certain forward looking statements about the company. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially.
Please note that these forward looking statements reflect our opinions only as of the date of this call. We will not undertake obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information.
Or future events.
That could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filings on Form 10-K, and other periodic reports on Form 10-Q, and 8-K filed with the SEC.
I would now like to turn the call over to the company's Chief Executive Officer, Rob Brown, Rob the floor is yours.
Thanks, Gar good afternoon, everyone and thank you for joining our call today.
Past couple of months has been an exciting period in our company's history as we successfully delivered on several key milestones that we believe position us to execute.
Against our future growth strategies and create long term value for shareholders. Just last month, we announced positive data from our two phase III pivotal clinical studies of <unk> bromide gel, 15% S V gel for sure for the treatment of primary axillary Hyperhidrosis also known as <unk>.
Underarm sweating.
In both studies, all primary and secondary efficacy endpoints, achieving statistical significance and SP gel was generally well tolerated over six weeks of treatment.
To briefly summarize the key takeaways from the Phase III Cardigan studies top line results.
Starting with the co primary efficacy endpoints that.
That's V gel resulted in a statistically significant greater proportion of subjects achieving at least a two point improvement on the H D. S. M. A X seven patient reported outcomes scale from baseline to end of treatment as compared to vehicle.
And S V gel resulted in statistically significant greater reduction in sweat production from baseline to end of treatment when compared to vehicle.
The results of all three secondary efficacy endpoints were statistically significant favoring SB gel over vehicle.
S. T gel was generally well tolerated the majority of treatment emergent adverse events in the S. V gel group were mild or moderate in severity and transient in nature no treatment related serious no treatment related serious adverse events were reported.
We appreciate the commitment from everybody that contributed to these two phase III pivotal studies, including the patients study investigators are crows partners in the Brickell team.
Looking forward. These results will form the basis for a new drug application or NDA to the U S FDA, which we expect to submit in mid 2022.
In addition, the results of these studies further support the potential for SP gel to be a best in class treatment option, we will evaluate all options as we plan for the potential commercialization of S V gel and will face any strategic decision on what we determined to most likely to maximize the value of the asset.
For our shareholders, while positioning the company for growth.
Turning to our new pipeline programs that jerk, one <unk> inhibitor platform.
In September we announced the acquisition of a phase one ready Dirk one eight inhibitor and cutting edge platform of small molecule precision N cen with broad potential to treat autoimmune and inflammatory disorders.
There are several key reasons, we are excited about this platform technology.
First this is a novel mechanism that comes with the potential to target both the adaptive and innate immune responses in patients whose immune system is imbalanced due to an underlying disease.
Targeting Dirk one eight aims to restore this immune balance.
Notably achieving immune homeostasis is an emerging field in the industry with real potential completely changed the way, we think about treating autoimmune and inflammatory diseases.
We believe there exists a significant market opportunity here for the <unk> program under development, which is covered by strong IP position, including composition of matter patents in the U S, Japan, China and other countries through at least 2038.
The initial lead program that we will be advancing with this platform is <unk> zero two.
Which is a phase one ready highly selective orally bio available Dirk one eight inhibitor <unk>.
<unk> zero two has a scientifically robust data package that includes a thorough characterization of the molecule and its proposed mechanism action as well as a non clinical data package that we believe supports the initiation of a first in human study.
In addition, we have preclinical efficacy data and over 10 different animal models of various autoimmune diseases, which confirm that the b is zero two.
<unk> best in class potential to target autoimmune disorders.
With respect to the next steps we plan to initiate a phase one study for <unk> zero two in Canada in the first half of 2022 with with top line results anticipated by the end of 2022.
This study picks up on the planning board and why the company we acquired the asset from had started so we believe it is the most efficient path forward to initiate this first in human study.
Our second program from this platform <unk> zero three is a topically applied <unk> inhibitor that is currently in the preclinical stages of development like <unk> zero to <unk> zero three has been tested in several preclinical efficacy models and has displayed promising preclinical efficacy.
And various debilitating diseases, such as psoriasis and atopic dermatitis.
Our team expects to conduct formulation development activities for the <unk> zero three program next year.
Lastly, the platform, we acquired provides us with the possibility to expand efforts in immunology from immunology to your own Fleming neuro inflammation.
To this end, we aim to select and initiated development of a lead next generation candidate comes up a lot.
Formed in 2022.
I want to take this opportunity to remind everyone that we recently hosted a webinar featuring a presentation by key opinion later leaders Doctor Bernard Core Center Roy a research Institute.
During this event Dr core discuss the latest findings on the novel Dirk when a target its role in autoimmune and inflammatory diseases and the broad therapeutic potential of restoring immune homeostasis by inhibiting Dirk one at.
A replay of this event is available on the investors section of our website.
We believe this webinar offers a wealth of information about our novel therapeutic platform and I invite everyone to listen to the events.
Before I hand, the call over to Bert for funding update I'd like to highlight two other recent events for the company first we expanded our leadership team with the appointment of Dr. Monica Nicky as Brookfield, Chief Medical Officer, Dr. Lewke brings over 20 years of immuno therapeutic in drug development experience to Brickell and will lead our.
Clinical development and medical affairs functions.
Second we strengthened our balance sheet with the recent completion of an equity offering resulting in net proceeds of approximately $8 $9 million, which Stuart will discuss in more detail in a moment with that I'd like to turn the call over to Bert to provide a financial overview.
Thanks, Rob and good afternoon to everyone on the call.
Before I provide a summary of the third quarter financial results I want to encourage you to read our full consolidated financial statements and M. DNA contained in our quarterly report on Form 10-Q.
Which can be accessed through the investors section of our website once filed with the FCC.
Starting with cash the company reported $21 4 million in cash and cash equivalents as of September 32021.
As noted by Rob subsequent to the end of the third quarter, we announced the completion of an all common stock equity capital raise.
Net proceeds totaling approximately $8 9 million.
We intend to use these proceeds from our offering for research and development, including clinical trials.
Working capital business development and general corporate purposes. Most importantly, we believe our current cash position will support our operations beyond the potential SP gel NDA submission to the U S FDA.
Which is expected to occur in mid 2022, as well as the receipt of phase one topline results for BVI zero, two which are anticipated by year end 2022.
Revenue for the third quarter was approximately 0.1 million, which consisted of royalty revenue we recognized from the sales of the clock in Japan by talk him.
This was similar to the total revenue reported for the comparable period in 2020.
Which was driven by collaboration revenue recognized for R&D funding provided by Kotkin to Brickell back in 2018.
R&D expenses were $10 2 million for the third quarter of 2021 compared to $1 3 million for the third quarter of 2020.
This increase was primarily due to higher expenses of $4 8 million.
Weighted to upfront payments to bore annoying, Inc. In cash and shares of our common stock in exchange for exclusive worldwide rights to the proprietary Dirk one a inhibitor platform as well as $3 8 million related to the clinical costs for SB gel.
Moving forward, we expect our R&D expenses for the coming quarters to decrease as we focus our R&D efforts on the earlier stage Dirk one eight inhibitor platform.
G&A expenses totaled $3 3 million for the third quarter of this year compared to $3 2 million for the third quarter of the prior year.
Lastly, our net loss for the third quarter of 2021 was $13 3 million.
<unk> $4 3 million for the third quarter of 2020.
And with that I'll turn the call back over to Rob for closing remarks, Rob.
Thanks Bert.
As I stated at the beginning of the call. We were very excited about all that we've accomplished over the past few months with several positive events that have expanded our long term growth prospects as we turn our attention to the next year, we have a promising set of near term value creation milestones on the horizon, such as the phase one study for <unk>.
Zero to further development of our <unk> inhibitor platform as well as the NDA submission for soft Permian broke.
In addition, we will continue to explore business development opportunities, including ways to generate meaningful value for our current programs and further expand our pipeline of products that we believe have the potential to become a transformative therapies for patients we look forward to providing additional updates as appropriate.
This concludes our prepared remarks I'll now ask the operator to open the call up for questions operator.
At this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question.
You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Our first question is from Thomas Flaten with Lake Street. Please proceed with your question.
Hey, Thanks, guys for taking the question.
Just back to your comment on R&D expenses going down could you give us a sense of maybe a little bit more granularity on how long do you think they'll get and then what your cash runway looks like.
Yeah.
Sure Hey, Thomas This is Rob Scott Berg and I don't know if you've got you've thrown off do you get feel free to answer the question.
Well I'll, let you address it because it's going to be there.
Early stage work requires a lot less money.
This is phase one so I'll, let Rob continue on that one.
Yes, yes. Thanks, so it's almost like you know obviously the last few quarters have been burdened by the phase III trials Fortunately.
We've tried to represent here the vast vast vast majority of those expenses have been has been expensed already.
Often where theres been kind of a.
Phase III tail, if you will that kind of goes oftentimes is but that's not the case in this in this situation.
Phase one studies are.
[laughter] are exponentially less expensive to do in the early development work as well so we feel pretty good about that and obviously, that's why we feel like this.
It gives us more than enough resources to get through the NDA submission, which does take some obviously cost and efforts as well as all the way through the topline data from the phase one at the end of next year.
Got it and in speaking of the NDA.
Critical path items that you still need to check off as CMC done I'm, assuming the preclinical is all set can you just walk us through kind of what those components look like.
Yeah on the critical path is really frankly, you have to finish the final study reports for the phase III data.
Remember, we provided top line data, but it takes a while to close out the the writing of those reports.
In signing off on on the phase III. So that's probably the most important thing.
All the other critical items that need to happen in a submission or done except for the REIT and then it's a matter of putting the writing together et cetera.
As we go forward. So so I mean, we're targeting mid mid next year to get all that done.
So we feel good about that timeframe, but theres not.
If there isn't some big.
Concerning thing out there that we're worried about needing to get done in order to meet that timeline as we go forward.
Great I appreciate you guys, taking my questions. Thanks, so much.
Thanks Thomas.
Our next question is from Leland <unk> with Oppenheimer. Please proceed with your question.
Hey, good afternoon Robin team, thanks for the update and for taking my questions. Just a question for me just a follow up from.
The the Kols webinar, you had undergone a I didn't think you had mentioned.
That target is implicated as a potential rescue mechanism interest me 21 or down syndrome, I think the company had planned to do some preclinical investigations around that in that setting since he with them.
With the compounds just wanted to know if you can give us a sense of when we may see that preclinical data emerge perhaps sometime next year. Thank you.
Sure why don't why don't I have Monica answer that question moniker. If you could if you could help leland out here.
Sure absolutely. Thanks.
Thanks for the question.
Determining right now which are the preclinical models, we're going to be conducting with duck may we haven't called choices are clearly with doctor coursework in down syndrome, that's very intriguing and potentially.
That's the other neuro inflammatory conditions I can't tell you anything about the timing of that yet because we're still determining what our prioritization is going to be for the.
Clinical models are going to be running them, but I expect we'll probably be starting those next year I just don't know what the timing would be in terms of when you might expect.
Great. Thanks.
One more question for me just strategically as you look to do additional.
Business development type of deals and bring and perhaps are there other technologies and assets obviously the circle in a you know there's a dermatologic.
Component to that and obviously self peroni and is in the derm space just wondering to what extent you want to stay within derm is a focus.
For additional deals or you know to the extent you may be agnostic to Durham.
For applications for further deals going forward. Thank you.
Yes, thanks Leland for that.
Obviously.
<unk> has been our home, but as we looked at assets. The two in licensed this first round when we when we acquired the dirt.
We saw a lot of innovation, that's actually happening outside during that you might be able to apply in the dirt and so because of that we chose to take a wider scope and really saw immunology auto immune diseases.
Is it maybe a little broader frame for the company as we go forward.
We think that's the right approach for us as we go forward to not limit ourselves to dermatology, but rather look for assets that might play in dermatology, but playing that broader that broader immunology space. So that's where we that's where we will focus that's where we are focusing on our on our work.
Work to look for additional assets in and we're pretty excited about that theres. Some interesting things out there we can be excited about.
Terrific. Thanks, Thanks, so much and congratulations on the progress.
Hey, Thanks Leland.
We have reached the end of the question and answer session and I will now turn the call over to Mr. Robert Brown for closing remarks.
Thank you for taking the time this afternoon to listen to our update I wanted to close the call out by thanking everyone for joining us today and for your continued interest in Brickell as always feel feel free to reach out to US anytime you have questions and have a great afternoon.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
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