Q3 2021 Navidea Biopharmaceuticals Inc Earnings Call

Any on an interim basis, while its next CEO is identified.

The Executive leadership Committee includes myself, Mike Rosol, the company's senior VP and Chief Medical Officer, Eric <unk>, The company's Vice President of Finance and administration and Jeffrey Smith, the Vice President of operations the.

The Executive leadership Committee will work with the newly established Board oversight Committee, consisting of independent Directors, Alexander Capello, Thomas <unk> and John case got junior.

During this transition we remain focused on the rheumatoid arthritis pipeline, while also working aggressively to advance our therapeutics program into the clinic.

In the third quarter on September one we had our end of phase II type B meeting to discuss the results of our completed phase <unk> trial in rheumatoid arthritis, and advancement into phase III.

We had a constructive meeting with the FDA have received the formal minutes of that meeting and have submitted our <unk> III 33 phase III protocol and analysis plan with the agreed upon modifications based on that discussion we are actively preparing for initiation of the trial.

I have some more comments on the <unk> program in a moment and the clinical update portion of the call.

In this past quarter. We also brought in Dr. Michelle Mateo as our Chief regulatory officer as you might have read in our press release, Dr. Mikael has over 30 years of experience in the pharmaceutical industry and has served in senior regulatory roles at bio Tech AG Smithkline Beecham, now GSK and pharmacy Upjohn Pfizer to name.

A few.

Dr. Mikael has moved here to Ohio from Germany. So that we can interact with him readily in on a daily basis. We're excited to have him here and he is working closely with our clinical team as we advance the <unk> program and manage the distribution of Lymphoseek in Europe.

This quarter also saw the appointments of several board members Alexander Capello, John Scott Junior Thomas FARB in Agnieszka Winkler, Mr. Kellow bring Mr. Capello brings over 30 years of banking and public forward experience to the company and Mr. Scott as the Companys largest shareholder.

Mr. <unk> has over three decades of experience as an investor in and senior executive of numerous life science and information technology companies, both in the U S and internationally and as Winkler has extensive progression and board experience with startup mid cap and fortune 500 companies.

Now I would like to cover the clinical updates.

So I'll begin with the progress on our <unk> program and an update on our interactions with the FDA.

As we have discussed previously in July we submitted our end of phase II type B meeting package to the agency for their continuing evaluation of the completed phase II trial as well as a review of the proposed phase III protocol and analysis plan.

Phase II B trial, now $3 31, and the data from it were critical to moving us forward and already as a reminder, this was a three arm trial in arms, one and two we evaluated the repeatability reproducibility and stability of our <unk> imaging readout in both healthy subjects and in patients with active RA and in the third arm we.

Mirrored the upcoming phase III study to obtain data to help with sample sizing for the phase III and to have a first look at the ability of <unk> imaging to serve as an early predictor of treatment efficacy.

As we discussed previously the data from the completed trial demonstrated that <unk> can provide robust quantitative imaging in healthy controls and in patients with active RA.

This imaging is reproducible and can define joints with and without aura involved inflammation and that <unk> imaging can provide an early prediction of treatment efficacy of anti TNF Alpha therapies in short the analysis from the complete set of arm three patients demonstrated high accuracy at early prediction of treatment effect.

With a strong predictive value in particular for non responders to anti TNF alpha therapies, even from the baseline scan alone in the defined subset of patients and these patients those exhibiting a low level of <unk> uptake in the joints on their initial baseline scan who would likely represent the so called fibroid subtype of <unk>.

There was an almost 90% non response rates to anti TNF Alpha therapy, using a clinical gold standard assessment.

This result on its own the ability to use a single time point scan to predict that and anti TNF Alpha therapy is highly unlikely to work in a particular group of patients would be a powerful tool for rheumatologists to be able to rule out an entire class of therapies from the get go avoiding the high costs possible side effects and possible worsening.

A disease that could otherwise be the case and.

In combination with the predictive capacity, we saw on the rest of beyond three subjects. The data continue to support our hypotheses.

The results from the full data set from this trial will be submitted for presentation at an upcoming international meeting and of course, we plan to write these up for publication in the medical Journal.

Following submission of the briefing package containing these results as well as the <unk> hundred 33 Phase III study protocol and analysis plan. The FDA granted our end of phase II meeting request and set the date for September one.

Several days prior to the meeting the agency sent us their preliminary comments, providing us with the opportunity to send back initial replies to their comments in preparation for an efficient September one meeting the meeting itself was constructive and included two key opinion leaders in rheumatology, Dr. Jonathan graph of UCSF and Dr.

Constantino pits Alice of Q mall in the U K.

Of whom have been site investigators and our phase II program as well as instrumental advisors in our <unk> program development and trial design.

Since this constructive meeting on September one with the FDA and after receipt of the formal meeting minutes to make sure. We remain in alignment we finalize the agreed upon modifications to the phase III protocol design and analysis plan and incentives back to the FDA for comment in the interim we are preparing to initiate the phase III this quarter.

As I've mentioned before we have several key sites that we expect to be able to open up quickly.

These are sites that were involved in the phase <unk> study and are well acquainted with the trial design and operations.

I want to also mention that we continue to make very good progress in automating the imaging quantification as well, which will have significant benefit to the commercial product.

We have nearly completed the healthy control study Nab $3 35 to establish what is called a normative database for <unk> and RA and integral part of our ability to discriminate already inflamed joints from those that do not have inflammation is the knowledge of what healthy joints look like quantitatively.

We use the healthy control data from <unk>, one of the completed phase to be to start to set these parameters and we will use this study to add to the size of the current normative database. This.

It should enable us to discriminate or involve joints from nonoperating inflamed joints with improved accuracy and should have a positive impact on our ability to predict treatment response. This normative database, establishing the parameters of what a normal joint looks like with <unk> will play an essential part in both the phase III data analysis as well as.

Product.

As of today, we've enrolled all but four of the projected total and are on track to complete enrollment weeks.

Our comparison study of <unk> imaging to joined biopsy NAV III 32 is an active recruitment in this phase II study, we are comparing to <unk> imaging the histology from the joints of patients with active RA.

We aim to recruit patients with each of the three subtypes of RA to obtain comparative imaging and pathology results in order to establish the correlation between our imaging signal and the number and density of macrophages and <unk> patients' joints.

We have opened up northwestern University Barts health of London, and a third site a research Rheumatology group called <unk>, two and help out in Los Angeles recruitment into the study has really picked up and as of this call. We have nine subjects enrolled and additional candidates in pre enrollment screening to <unk>.

While is designed so that we enroll a minimum of four subjects in each of the three subtypes of RA. So overall trial size is expected to range between 12% and 24.

Remember this trial is not required for FDA approval and initial indications in RA that we are going for but we believe it is critical in order to achieve qualification of CD <unk> six as a biomarker for <unk> as well as to engage with pharma <unk> Houston trials of new therapeutics.

We'll also provide rheumatologists with gold standard information related to our imaging readout and the fundamental biology of a patients already for example results from this study could directly demonstrate that <unk> imaging can be used to determine a patient subtype of <unk> and this would have implications for what class of therapies might or might not work on that.

Particular patient this could therefore have immediate impact on the management of RA patients on.

On the cardiovascular disease front work is completed on the investigator initiated atherosclerotic plaque imaging study at MGH in Boston.

The group there has submitted an abstract to an international conference for possible presentation in February.

The data we have seen have been promising in terms of localization of <unk> sites of atherosclerotic plaque and they have been in line with what was reported in the pilot study we co published with them previously.

Preclinical studies of gallium 68, <unk> imaging for our NIH funded project with the University of Alabama, Birmingham are also ongoing.

This project evaluated to manifest in various new imaging agent similar to tell manifest in a mouse model of atherosclerosis. All planned imaging has been completed preliminary analyses have shown significant uptake of our gallium 68, <unk> like imaging agent in atherosclerotic plaques in this mouse model on that.

<unk> Pudic front, we continue to make strides forward.

For indications in oncology, we have performed preclinical studies that demonstrate macrophage phenotype change from an immunosuppressive to a pro inflammatory state as well as a synergistic effect on tumor growth reduction in animal models, using our doxorubicin containing construct with an approved checkpoint inhibitor therapy.

Put more simply the tumors grow at a significantly reduced rate with our molecule combined with an approved drug compared to the approved drug alone.

Furthermore, evaluations of the cells within these tumors, so that our doxorubicin containing construct altered the inflammatory state of tumor macrophages much as was expected.

These are important mechanism of action and proof of concept studies that need to be done in order to move forward and we are excited by the results. Thus far we presented these results at the New York Academy of Sciences Frontiers in cancer Immunotherapy Symposium back in May and are completing work on the first of several related manuscripts further preclinical.

<unk>, including a dose schedule study looking at different starting points for therapy were also carried out this quarter.

In this third quarter. Another important set of preclinical imaging studies were completed with our collaborators at UAB.

These studies evaluated two new imaging technologies in a mouse model of cancer. The first technology is designed to increase imaging agent localization to target tissues. While the second technology was designed to block off target imaging agent localization to deliver a major site of localization when <unk> is administered.

By intravenous injection these.

These studies were highly successful showing that we can dramatically increase localization of the new telematics up like imaging agent to tumors, while simultaneously significantly blocking off target localization to the liver.

With help from our colleagues at UAB a manuscript describing these results is being prepared for publication.

The success of these imaging studies greatly expands and the videos imaging knowhow and potentially illuminate the path to a next generation imaging agent.

Perhaps as importantly, the success of these imaging studies also points to a pathway leading to synthesis of more of more effective therapeutic drug delivery construct.

Building on this new information new drug delivery constructs have been synthesize that carry payloads of either dexamethasone or doxorubicin. In addition, other new constructs had been synthesize that carry new drug payloads that may be more effective than doxorubicin for beneficially altering the immune status of tumor macrophages.

All of these new contracts are currently being evaluated in a human macrophage assay system with the first new construct carrying a doxorubicin payload having progressed to an ongoing evaluation in a mouse tumor model.

The dexamethasone carrying construct will also be evaluated but in a mouse model of income inflammation rather than cancer. This construct could have broad reaching applications in autoimmunity inflammation and in diseases of metabolism.

As these preclinical studies are completed we will update you and announce when and where our results will be presented.

And so our therapeutic pipeline is robust and moving forward.

On the intellectual property front, our provisional patent application titled synthesis of uniformly defined molecular weight monopoly deck strands and derivatives thereof was converted to an <unk> application on July nine.

This application protect a portion of the new imaging Knowhow I discussed previously on.

On August 20, we filed a provisional patent application entitled compositions and methods for the treatment of rheumatoid arthritis, which relates to a multivariate algorithm algorithmic method that may improve the predicted accuracy of our rheumatoid arthritis imaging product.

Finally, we received notice of allowance of claims and foreign to foreign jurisdictions for an application broadly involving diagnosis and treatment of diseases involving CD to a six expressing cells.

We have an active IP protection strategy that we believe will provide needed protections and rights to both our current diagnostic and therapeutic agents as well as to our next generation molecules under these indications.

These are just some of the highlights in the last quarter that we wanted to touch on for this update we remain largely focused on the raw pipeline, specifically preparation for the phase III as well as enrollment into the currently open biopsy enormous database studies, while we continue to support and push for progress on our other <unk>.

Diagnostic and therapeutic indications.

As always I want to thank the team here for their tireless efforts to keep things moving.

And our network of clinical trial sites and academic research collaborators for all of their hard work.

And now ill turn the call over to Erica for the financial updates. Thank.

Thank you Mike.

Total net revenues for the third quarter of 2021 were $96000 compared to $268000 for the same period in 2020.

Total net revenues for the first nine months of 2021 were $481000 compared to $695000 for the same period in 2020.

The decrease was primarily due to decreased grant revenue related to small business innovation research grant from the National Institutes of health supporting <unk> development.

Those decreases were offset by receipt of reimbursement from Cardinal health.

R&D costs and the partial recovery of previously written off in 2015.

R&D expenses for the third quarter of 2021 1 million compared.

Compared to $1 4 million in the same period in 2020.

And R&D expenses for the first nine months of 2021 were $3 8 million compared to $3 7 million in the same period in 2020.

And that increase during the year to date was primarily due to net increases in drug project expenses, including increased <unk> therapeutic and TC 99 am Tom asset development costs offset by decreased <unk> diagnostic development costs.

The net increase in research and development expenses also included increased regulatory consulting and general office expenses offset by decreased employee compensation, including incentive based awards.

Selling general and administrative expenses for the third quarter of 2021, or one $5 million compared to $1 8 million in the same period in 2020.

SG&A expenses for the first nine months of 2021 were $5 1 million compared to $4 9 million in the same period of the previous year.

And that increase during the year to date.

That's primarily due to increased consulting services related to preparing for European distribution of TC 99, and Tom intercept increased employee compensation, including incentive based awards increased insurance costs incurred.

Increased director fees related to additional board members increased travel costs and increased European license fees General Opex office expenses and a loss on the third quarter 2021 abandonment of certain intellectual property.

These increases were offset by decreased legal and professional services decreased investor relations costs.

Facilities costs and franchise taxes.

Yes.

The videos net loss attributable to common stockholders for the third quarter of 2021 was $2 $4 million or <unk> <unk> per share compared to $3 3 million or <unk> 13 per share for the same period in 2020.

The net loss attributable to common stockholders for the first nine months of 2021 was $8 1 million or <unk> 28 per share compared to $8 4 million or <unk> 37 per share for the same period the prior year.

And finally in the video ended the third quarter of 2020 $172 million in cash and cash equivalents.

I'll now turn the call back over to Mike.

Thank you Erika we will now read through the submitted shareholder questions and provide our responses we have collected and collated the questions received and in some cases have consolidated overlapping or similar questions into ones that capture the overall intent.

Hi, first question, it's been awhile since in the video has had its meeting with the FDA can you provide any color at this time and if not when do you expect to share where things stand regarding phase III.

As mentioned in my early remarks since the constructive meeting on September one with the FDA and after receipt of the formal meeting minutes to make sure. We remained in alignment we finalized the agreed upon modifications to the phase III protocol design and analysis plan and Incent those back to the FDA for comment in the interim we are preparing to initiate the phase III.

Isn't the video purposely slow rolling with the FDA since two months seems like a long time since the September <unk> meeting when the investing public was told all along they were in lock step with the FDA.

No our interactions with the FDA are proceeding according to guidelines and we have been moving rapidly at each step to provide briefing materials in responses as we have progressed in the RA program.

There are processes and guidance is in place that determined timelines of interactions as a company. We very quickly provided the initial briefing package back in February and then the end of Phase II type B meeting package in July this small team put together. These large document packages on an extremely tight timeline the Ada.

<unk> guidance is allow sufficient time for their reviewers to thoroughly examine and provide comments.

I should add that the agency has been great to work with an extremely helpful. In advancing from one step to the neck rapidly.

Yeah.

How many sites have now been contacted and how many sites have agreed to run to $3 33, or a phase III trial.

We've been in touch at one level or another with over 50 U S sites that have expressed interest in participating in an F. 333 trial. The actual number of sites opened here in the U S and possibly abroad might differ from that but there is no shortage of interest and participation.

The investor presentation graph shows around 15 months elapsed time for 333 or a phase III trial does that include testing assessment and NDA filing time.

Timeline from the start of trial to finish as always depends on rate of enrollment and this has impacted both the individual site level as well as by total number of sites. Our plan remains to open up sites that have already participated in our earlier phase <unk> trials and who have demonstrated a good recruitment pace and will work with new sites as well too.

Insurers rapid recruitment rate as possible. Following the trial, we will work aggressively to finalize assessments for the full submission package.

We've demonstrated rapid turnaround of study reported briefing packages in the past and I expect that to continue for the full filing we will begin to prepare for the filing is the phase III program continues.

Conductor Roz I'll elaborate on Holly two bucket or dual track or a diagnostic $3 33 phase III trial mentioned at the Squire virtual event woodwork, if and when the FDA approved phase III and how major it is if approved sure than at $3 33.

Trial will take all comers in terms of RA patient subgroups and that we will not exclude patients based on factors such as time from first diagnosis of RA treatment history age et cetera, we.

We have built into the trial design plans to look at these and other subgroups of patients than specific anti TNF alpha drugs in order to have a feeling whether any of these impact the ability of <unk> to serve as an early predictor of treatment response to anti TNF Alpha there.

Yes, that's hypothesized these demonstrate an impact on the efficacy of <unk> to act as in none of these sorry, none of these demonstrate an impact on the efficacy of <unk> as an early predictor than this will support the use of it across the spectrum of patients who are at the point, where their doctor determined they need to switch to a new therapy.

When can we expect to receive preliminary data on the 332 trial.

Given the small sample size of the Nab $3 32 trial with its adaptive design and unexpected enrollment of 12 to 24 subjects and the recent increase in recruitment rate, it's possible that a preliminary readout can occur in Q1 or Q2 of next year, but as always this is something of an educated guessing game as I said, though enrollment has been going very well.

Of late and if the current pace continues we should be on the shorter end of that timeline.

How many subjects are in testing and have completed testing in the <unk>.

32 phase <unk>.

Biopsy trial and have they all been in the U S or in the U K also.

Today, we have nine patients enrolled enrolled and it's about an equal distribution between the U S and the U K.

And who are at various stages of the trial with an additional two in different stages of the screening process.

What is your estimated completion date for $3 35.

Enrollment in imaging events should end shortly in this study as there are only a handful of subjects to enroll.

All goes as planned we expect complete enrollment by the end of this month.

What is the progress on the oncology Tms and inflammatory preclinical mouse and is there anything you can share on results and our next steps.

Sure our preclinical oncology efficacy study is ongoing with our manned docs construct we're making excellent progress on several new therapeutic payload constructs for oncology.

These are in the pipeline for in vitro efficacy evaluation and then will be tested in preclinical models as we develop lead candidates. We anticipate presenting some of these preclinical results at upcoming international meetings as well as writing them up for publication as these advancing the pipeline safety Tox studies over the next step to moving towards an IND and <unk>.

First in human trials as well as validating chemical synthesis for reliability of production.

On the anti inflammatory front, we have a well characterized and functional dexamethasone construct that we plan to bring in the animal model studies. Soon we are currently planning for these studies along with our collaborators. So that we can move forward expeditiously.

Several other areas of new imaging agent in Therapeutics construct research are ongoing with our collaborators at UAB as well and as I discussed earlier in this call.

Yes.

Can you speak to <unk> cash position length of runway and level of confidence additional funding will be available if needed is there still sufficient cash on the balance sheet to fund the startup of the phase III trial and fund the company into early 2022, and one of the potential sources of funds for the company that are currently lined up.

Current cash reserves should take us to at least the end of Q1 with initiation of the Nab $3 33 trial included the board of Directors is currently considering available options for future financing, including both non dilutive and dilutive means.

As the regulatory approval of lymphoma aim now completed in India and is there an interim payment due and if so how much.

Things are progressing and we are working with our Indian partner to obtain approval as soon as possible. We are in the last stage of the approval process and issuance of a marketing authorization in India. Later this month, there will be a zoom call with the drug controller General of India, The joint drug controller and other senior reviewers to address questions related to stability.

Data and the statistical approach used to obtain those data. This is expected to be the last step to obtain approval. We will keep you informed of our progress.

What have you done to prepare for the probability of that window and we will be approved in the near future in India. We're in the latter stages of validating API manufacturer that can be used to supply. This in other territories.

That's the license to sell in Europe and approved as previously indicated.

What are the plans if any to market lymphoseek that may differ from <unk>.

The European Medicines agency previously approved the transfer of Lymphoseek marketing authorization from Nord gene back into video and we obtained the wholesaler dealer authorization to sell lymphocytic and to you at the end of September.

While we aggressively pursue a new long term partner for growing the asset in this region. We have a third party logistics service establish to fulfill orders until such partner has identified.

The learnings from Nord jeans marketing strategy will be incorporated into a new strategy with our future partner.

It's a jubilant <unk> marketing ventures still being actively and earnestly negotiated have there been any discussions with jubilant over the past week regarding the Mou and the relationship in general I E have they reached out to you or due to them to discuss any concerns either party may have and can you share the general tone of the Tox.

Yes, we've had discussions with them in the last couple of weeks and they remain interested in the RF products.

As we have mentioned in prior calls they like we are anticipating the results of $3 32 study, we will keep you updated on the progress of that trial.

Have you been mainly maintaining contact with other possible business partners in case that jubilant plans do not work out.

So our Mou or memo of understanding with jubilant grants exclusivity to jubilant for the application of <unk> in the U S, Canada, Mexico, and Latin America, and we are certainly abiding by that agreement we remain active in multiple areas of BP development in ways allowed by these and other binding agreements.

In the absence of a CEO, who is negotiating with jubilant and the FCA in setting policy.

Ongoing negotiations are being handled by senior management, as Brent and and consult with the board oversight Committee as always the FDA interactions are handled by the senior leadership of the clinical and regulatory departments.

Your noncompete agreement with Cardinal Health for Lymphoseek expires November.

What impact does that have on your marketing plans for Lymphoseek in North America.

The initiation of the Noncompete clause was at the time of the official closing date, which was March three 2017 and extended five years beyond that date, meaning it extends to March of 2022. We currently have no plans to develop a new product that accumulates in lymphatic tissue or tumor draining lymph nodes for the purpose of lymphatic mapping.

Or identifying the existence of cancer in the business territories of North America.

Can you provide an update on the status of potential income from now 46, 94 as well as any plans for a phase III trial for now 46 94, the sublicense for now for six to nine four is held by manure technologies, who on the basis of that sublicense have specific options related to the pursuit of regional.

<unk> of NAV for six nine for us.

Beta amyloid imaging agent used as a research tool and Alzheimers disease. There is particular interest in potential in this now with biogen's Alzheimer's drug approval at the current time matures, providing now for $6 94 for use in clinical trials, we will update you with material changes as appropriate.

How long does the chairman and the search committee estimate until any higher.

Tired.

There is an active process led by members of the board of directors, it's difficult to comment on timeline, but this is a high priority.

We will have chairman relocation in Dublin, Ohio.

The board has faced in the senior management of the video as well as in the team as a whole the officers and senior leadership within the company are in very close contact with the board and are working together with them to ensure progress continues.

Has the company a policy where independent investigators using <unk> product allows for that information to be released once the naqvi website web site.

In the public once in the public domain with the IP owners permission if necessary.

We encourage any investigator or a group of investigators to present and publish their findings with any of our products and a good portion of these do end up on publicly available sites like Pubmed.

For there they would be available to us to link from there they would be available to us to link on our site. There are growing number of such pubs and presentations, which is great news because it demonstrates the value, we're bringing to doctors and patients.

This is a good idea and we will think about adding a location on the website to relevant publications or publications of high interest.

Was there any impropriety expense reimbursements employee harassment not keeping board informed etc. Leveled at chat I direct your attention to the press release from October 26 for the statements on this matter.

What is management's plan going forward why is the share price so low why should investors stay committed to video.

The board of directors as well as the company management are committed to advancing the pipeline and bringing medicines to patients and value to shareholders. Not only are we focused on advancing the raw product to regulatory submission as well as moving therapeutics and other diagnostics ahead, but the board and management are actively looking into business development on a number of fronts.

As well as strategies to extend intellectual property protections for existing and new products. The search for a CEO is a priority and is actively ongoing.

From my personal vantage point within the company I can say that the company is truly committed board members and a dedicated staff who are working tirelessly to advance the science and deliver our approved and pipeline products to the people who need them.

The engagement level of the board and interaction with the management has never been higher in my time at the company. Overall, you would have a difficult time, finding a harder working group of individuals from the board to the people here on the ground in Ohio, and beyond and we're working together as a team to grow the company and focus its efforts in the right direction.

For what it's worth and again from my perspective, the feeling here internally as positive and energized and the right types of strategic thinking are happening in order to position the company for future success.

And with that I'd like to thank those of you who submitted questions for today and all of you who took the time to listen to this call. We will continue to work diligently to progress the science and the company and we look forward to future updates. Thank you.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Yeah.

Yeah.

Yeah.

Yeah.

Okay.

Yeah.

Mhm.