Q3 2021 ZIOPHARM Oncology Inc Earnings Call

Greetings and welcome to the diaphragm oncology third quarter 2021 earnings 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 Alex Lobo Stern Investor Relations. Thank you you may begin.

Thank you good afternoon, and welcome to XI pharma oncology third quarter 2021 financial results Conference call and audio webcast with me today are Kevin Boyle Senior Guy from Chief Executive Officer, and Raphael, a boffo, Jonathan <unk>, Chief Medical Officer, and Executive Vice President of research and development.

Earlier this afternoon <unk> issued a press release announcing financial results for the three months ended September 32021, we encourage everyone to read today's press release as well as <unk> quarterly report on Form 10-Q for the third quarter 2021, which has been filed with the SEC.

The company's press release and quarterly report will also be available on <unk> website at <unk> Dot com.

In addition, this conference call is being webcast through the Investor Relations section of the company's website and will be archived there for future reference.

Please note that certain information discussed on today's call is covered under the safe Harbor provisions of.

Private Securities Litigation Reform Act of 995.

Participants are cautioned that this conference call contains time sensitive information that are accurate only as of the date of this live broadcast November eight 2021.

Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the Companys business.

Information on potential risks and uncertainties are set forth in our most recent public filings with the SEC.

SEC Doc.

The company undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this webcast, except as may be required by applicable securities law.

With that said I would like to now turn the call over to Kevin Boyle, Kevin you may begin.

Thank you, Alex and welcome everyone to XIAFLEX <unk> third quarter 2021 earnings call.

When I joined XI farm, just over two months ago, I promise to be transparent with shareholders and share my observations and perspectives at the next opportunity.

Today, I'd like to do that and highlight some of our recent accomplishments and lay out my vision for the next year.

A month ago, we made the decision to strategically restructure the organization and focus our efforts on advancing our differentiated TCR T cell platform.

As a result, we took immediate action to rightsize the organization with a focus on generating clinical data, while maintaining a robust R&D discovery engine.

I'm impressed by the quality dedication and resiliency of our team at Sarnia farm and I'm confident we possess the internal capabilities to advance our innovative scientific research into the clinic.

We appreciate the importance of generating clinical data to validate our TCR T platform and are making excellent progress in that regard.

We realized the fastest way to the clinic was not to rely on an external contract manufacturer, but to operationalize our in house cgmp clinical production unit or CPU.

I am very proud to announce that we completed the necessary engineering and process qualification runs in October at our CPU.

The XI farm team did an excellent job working together in a cross disciplinary manner to accomplish this important step.

We remain committed to begin treating patients in the first half of 2022.

Our TCR T platform is predicated on a robust research and development lab and team based in Houston.

The R&D team is working on several different programs.

First we continued to support the lead program, our TCR T Library trial and are working to incorporate additional tcr's into this IMD.

Second we are advancing the development of our membrane bound IL 15 program and expect to have further updates on future calls.

Third we have devoted significant resources to generating our own TCR discovery platform.

These activities will allow us to generate our own intellectual property and have exclusive use of the tcr's we identify.

I am impressed by the breadth and depth of our R&D team and TCR T platform, which holds the potential to meaningfully improve the lives of cancer patients.

I will let Raphael he take a deeper dive into our upcoming TCR T Library study, but I want to elaborate briefly on our rationale for this program.

Our TCR T Library platform is enabled by our versatile non viral sleeping beauty technology combined with our extensive library of Tcr's.

This gives us an advantage as we can target multiple solid tumor indications within this single trial.

This enables a timely and cost effective approach to potentially identifying several indications that could benefit from our TCR T platform and give us multiple paths forward. Once we have generated this initial data set.

This is critical to our go forward strategy and we are focused on dosing our first patient in this study.

I would now like to turn the call over to Raphael Lee, Our Chief Medical officer to provide an update across our manufacturing clinical and R&D efforts that will support our future growth and bring value to our stakeholders Ross Aly.

Thank you Kevin.

This past quarter, we have continued to make progress across all our manufacturing development program and R&D activities and like Kevin said, all of Auckland, Biopharm committed to execution and generating clinical data in the next year.

Let me start by highlighting the progress we have made that analysis.

The manufacturing facility in Houston, Texas.

We have built and are opening our own.

Can you cut production a union CPU.

Commissioning of the part D V D I realize that the broker validation were completed in the second quarter.

And we recently completed engineering and product qualification in the CPU.

We are committed to having manufacturing capability operational.

Okay.

The first patient dosing in the first half of 'twenty two.

Once operationalized, we expect to begin dosing patients in our phase one two tcf libraries and their first opportunity to us.

As Gary mentioned, our TCR Library, Scotty you could basket trial.

That will evaluate patient that cross.

Solid tumor indications lung.

Lung colorectal endometrial.

Ovarian and by Congress.

Last month, we opened our screening study again.

And we are actively screening patients that would be enrolled on the phase two treatment study.

On matching neo antigen TCR HLA bearing but that are available in our TCR T Library.

Patients will then be infused with autologous T cells that been engineered with great T.

T cell receptor using our meeting beauty transposon Transposase technology.

Our reactive against that she muted with new anti jam.

The phase one dose finding portion of this study will evaluate patients are one of three dose levels.

We believe.

Back to you fly over time is a multimodal approach to advancing our TCR T liability for what I believe will allow us to rapidly and cost effectively.

First identify the recommended phase two dose.

Then develop a tumor agnostic that I've used across multiple indications.

You bet your opportunity to move quickly if one or more registrational trial.

Much to the genetic profile, you will get a patient's cancer itself.

It doesn't meet our research and development engine into meaningful clinical progress.

As you may recall.

Yeah at the ACR annual meeting, we shared exciting preclinical data on our multi both PCR.

On Saturday at the annual <unk> 2021 conference at the society of immunotherapy of patents.

We provided an update on these TCR with unique specificity targeting recurrent TPP deeply. Thank you that's the substitution infrequent HLA upper body.

These data will further demonstrated the strong silent beyond our TCR T program.

Finally to round up our go forward strategy.

We are continuing to qualify and validate new TCR, two partnered and the potential utility and not thinking about patient population of Covid, Our TCR library.

On the subject we plan to file an NDA in the next few months to include additional P. C. R.

Our upcoming TCT Library trial.

Furthermore, we have developed an innovative platform or with internal resources, including genomics bioinformatics and tailored our immunology too.

Right and validate <unk> 50 that gets better.

On by Us.

I would now like to turn the call back over to Kevin to review the financial results for the quarter Kevin.

Thank you Ralph Alley.

For the third quarter of 2021, we reported a net loss of approximately $22 $7 million or an 11 <unk> net loss per share compared to a net loss of approximately $23 million or <unk> <unk> net loss per share for the third quarter of 2020.

Research and development expenses totaled approximately $14 $5 million for the third quarter 2021, compared to approximately $14 million for the same period in 2020, an increase of 4%.

General and administrative expenses were approximately $8 2 million for the third quarter 2021, compared to approximately $6 4 million for the third quarter 2020.

Total operating expenses for the third quarter of 2021 were approximately $22 7 million compared to approximately $20 3 million for the same period in 2020, an increase of 12%.

Cash and cash equivalents as of September 32021 were approximately $91 7 million.

Given our current development plans and continued cost management efforts, we anticipate our cash runway will extend into the second quarter of 2023.

That concludes our financial statements.

But before we open the call to questions I'd like to close by saying that we are committed to building a leading TCR T company.

We have created an organization that is appropriately capitalized and staffed for success.

Over the next year, we will remain focused on transforming the innovative scientific research we have developed into clinical progress.

We have made excellent progress on operationalize ing, our in house manufacturing facility.

And with existing cash sufficient to fund our operations into the second quarter of 2023, we are confident in our ability to enter the clinic with our TCR T Library program and generate meaningful clinical data in 2022.

With these clear and achievable strategic priorities in place our entire team here at XI. A farm is focused on execution as we aim to bring value to our stakeholders and improve the lives of cancer patients.

We will now open the call to questions Hillary.

Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to another question from the queue.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

One moment please poll for questions.

Our first question is from Alethia young of Cantor Fitzgerald. Please proceed with your question.

Hi, This is Emily on for Alethia. Thanks for taking my question I'm just curious what the gating factors are just starting the phase one phase two study now that you've made the progress with the in house manufacturing and then maybe also just comment on that now that you've done the restructuring how do you kind of expect your operating expenses to change.

In the fourth quarter and maybe in 2022 as well thank you.

Great. Thanks Emily.

I'll start with the second one first with regards to cash burn, we anticipate that our burn going forward will be less than $15 million a quarter.

And so that's something that.

We will be reporting on our cash burn going forward as well and some of the cashes reset associated with repaying the term loan that was put in place as well as we look in the future horizon and so those terms of the term loan are spelled out into our 10-Q, but we do have.

A nice reduction in our cash burn while remaining the appropriate size team to execute on our goals.

Now with regards to treating patients in our trial.

It is important that we have the all clear on our IND from the FDA. So the FDA review is probably the most important part to the next step along with screening and enrolling patients.

Ross Alley anything you'd like to add to that.

Just as I said earlier that we already started screening patients actively screening patients so the.

We are already screening patients that could be abroad, when the phase one two study.

Okay. Thank you.

Thanks Emily.

Our next question is from Arthur <unk> of H C. Wainwright. Please proceed with your question.

Hey, good afternoon, everyone.

Oster aimed for RK. Thanks for taking my question. So I guess I just wanted to follow up on the TCR T trial.

Could you give us more colors C.

How what else needs to be complete all to be qualified before you guys are studying to dose the first patient in that trial.

Rafael do you want to reiterate what we said before to Emily.

Exactly we are waiting for the FDA review.

And I think.

Kevin mentioned earlier.

And we are already screening patients can be enrolled on the trial now you can keep in mind.

Frequency of mutations in the jewelry alcohol type, but we absolutely can be patient and we are ready.

To start.

Enrolling patient fairly soon I was saying by being the first out for making it.

Okay. Thank you, thank you for that and and congratulations on the manufacturing part.

Just wanted to note for those manufacturing part of it.

Most likely more for the clinical trial or <unk>.

How about for the commercial manufacturing what's your what's your plan on that part thank you.

Yes. Thank you.

For the clinical part that we have our manufacturing capabilities on the commercial side Thats quite a number of years away from right now and we have not communicated what our strategy will be at that point.

Okay. It sounds great. Thank you. Thank you for taking my question.

Arthur.

Our next question is from Thomas Flaten of Lake Street Capital Markets. Please proceed with your question.

Hey, good afternoon, guys. Thanks for taking my question I was just curious following the.

The restructuring that you had.

Have there been any retention strategies put in place to keep the staff that's left behind have there been any other.

Foreseeing departures I'm just curious what the impact that has had on the on the remaining staff.

Yes, Thanks, Tom.

We did put in an incentive stock option grant to make sure that we are all aligned with regards to creating value for our shareholders and at the same time motivating and incentivizing our team and so that has been.

Well received by the team and everybody has been working very hard very much aligned and we have not had any resignations that come as surprise. So we're very excited with the retention of our team in.

It's a core team were very strategic with who we ended up keeping and.

I'd just reiterate the strength of the team that we have.

The resiliency of the team and the amount of effort and deliverables that are coming out of this team is.

Quite impressive and really well positioned to get this clinical trial.

Up and running and enrolling patients here in the first half of next year.

Thanks for that.

I apologize I apologize if I missed this but with respect to the IND clearance.

Are you anticipating adding new tcr's to the IND prior to clearance or will that be.

Kind of an ongoing rolling exercise that you go through as you identified new TCR.

Raffaele why don't you speak to that.

Yes, so I wouldn't put.

Put a time line that would probably in connection with the submission.

We are planning a rolling.

<unk> keeps jogging with only a minor not only for the core as I mentioned earlier by the additional GCI that we've come over the next year.

Great and then finally.

I think we'll get it all.

Right got it.

And then just one final question any any word out of the NCI on how things are going over there.

So I believe that Raphael and team will be visiting the NCI later this week as a part of the city visit and.

But we don't have any update right now to share with regards to the NCI.

Great I appreciate you taking the questions. Thanks, so much.

Thank you.

We have reached the end of the question and answer session. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.

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