Q3 2021 DiaMedica Therapeutics Inc Earnings Call
We believe this is an important milestone for the development of our product as it underscores the significant unmet medical need that exists among patients who suffer from a stroke and area, where there hasn't been a new or meaningful therapeutic advance in 25 years.
With the fast track designation, we are eligible for more frequent interactions with the FDA, allowing us to discuss such things as our development plan clinical trial design questions. The use of Biomarkers and the extensive data needed for potential approval and fast track designation may eventually qualified <unk> for accelerated and priority review.
You have a new drug approval application if certain criteria are met.
Second as we announced earlier this week the FDA accepted our protocol amendment for the remedy to trial elevating stroke re occurrence as an additional independent primary endpoint. The trial has two independent primary endpoints focus on the two very important.
And factors.
Patients, who had a stroke experience that being the initial physical recovery from the stroke.
And second avoiding a second or a reoccurring stroke or a rationale for elevating stroke recurrence to an independent primary endpoint is based upon results from our prior phase two stroke study and supporting mechanism of action.
In our earlier phase II trial of <unk> 91, participants there was a statistically significant reduction in recurrent ischemic strokes of 13% on an absolute basis or 100% reduction on a relative this is based upon six reoccurring strokes in the placebo group, while there was none in the <unk>.
Nine treatment group.
So at an even greater and also significant effect in the patients who does not receive mechanical thrombectomy prior to enrollment.
This is the subgroup that most closely resembles the patients being studied in a remedy to trial.
Recurrent strokes make up about a quarter of all strokes today, there is a greater risk of occurring in the first few weeks in particular after initial stroke and are typically more disabling more costly and more favorable than in a initial stroke.
This has the potential to be a particular significant benefit of <unk> 99 for patients.
I'd also like to point out that the design of a remedy two is powered to assess the efficacy of <unk> in either or both independent primary endpoints. Additionally, the protocol amendment does not change the treatment the inclusion exclusion criteria the duration or the study population of the trial, we look forward to continuing to work with the FDA.
As we advance our stroke program.
Turning to our progress with the study we initiated the first site in the stroke trial and we also are very pleased to announce that our first patient has been rural has also been enrolled we are actively working with over 50 potential study sites, who are at various stages in the evaluation from contracting to the IRB review and also the planning process.
We have encountered some delays in the startup process sites are indicating that they remain under staffed and are having difficulty finding qualified research staff to hire for the sites that are currently in process. We are experiencing delays in turnaround times for essential documents states are attributing the staffing challenges to the summer surge.
And the Covid COVID-19 infections, driven by the Delta variant, which is not a surprise and the impact is in parts regional based upon delta levels across the country.
We believe that we're a few months behind in our startup timelines that said our clinical team has been working with members of our scientific Advisory Board and other physicians in our network to reach out directly to the neurologists at key study sites to enlist their support in making remedy to your priority study for the institutions, while working closely with our <unk>.
Contract research organizations. This is now having a meaningful response in.
In terms of our expected timing our projected study timelines is based upon a very conservative enrollment rates of one patient every four months at each site.
This is based on a historical stroke studies that have short treatment windows and often have associated with severe potential side effects.
This leaves us some upside if the actual rates increase increases by even a small amount.
With our 24 hour treatment window, the excellent safety potential our profile and the potential to improve both the stroke recoveries and importantly, also reducing the risk of stroke recurrences and along with the lack of treatment options. We believe there is a good chance for us to achieve a higher enrollment rates are projected window for completion of the interim and.
<unk>. This is the first half of 2023, we will keep you updated as we get more clarity on both the site activation and also on the enrollment rates.
I'll turn now to a brief update on our redux phase II trial of <unk> in chronic kidney disease last week at the annual American Society of Nephrology kidney week conference, we had the opportunity to present additional data from our redux trial, principally the additional data was from the Iga nephropathy cohort.
That's where we continue to see significant reductions in albumin urea.
In particular at the two microgram per kg dose level participants with moderate to severe baseline Alban urea demonstrated an over 30% reduction in oven area. After 90 days treatments.
Additionally, at the same dose level participants demonstrated encouraging reductions in two key biomarkers for Iga nephropathy.
Proliferation, inducing ligand or April which showed a 30% reduction in Iga, one had a 20% reduction improvements in these biomarkers are early signals of potential disease modifying effects of <unk> in this patient population.
Based upon this we believe that the data January to date for <unk> in patients with Iga nephropathy suggest that <unk> may offer clinically significant benefits to these patients and something we believe with longer term treatment.
The potential for improve.
Efficacy with these patients.
I'll also briefly.
To touch upon the <unk> nine for the Hypertensive African American cohorts, which demonstrated decreases in both systolic and diastolic blood pressure up 19% and 12 millimeters of Mercury, respectively. At the two microgram per kg dose level and more importantly from a mechanism of action perspective, there is little blood pressure <unk>.
<unk> and the normal tens of patients in particular those in the Iga nephropathy cohorts. This offers further support for our stroke study, we're reducing blood pressure may also contribute to reducing the risk of stroke. The occurrence as high blood pressure. Following a stroke is the leading contributor to our recurrent stroke.
Also it's important to note for neurologists shouldnt have to worry about blood pressure drops and the normal tens of patients and patients becoming hypotensive. This is another example of the selective activity of the <unk> mechanism of action.
We are pleased to see these positive signals from our Redux study, which support future development of <unk> for renal diseases. The observed improvements all point to improved.
Is it logical effect of dealing nine treatment and also provides additional support for our study of <unk> nine and the treatment of stroke, while the positive signals observed from our Redux study Merit further development, our near term focus remains on our stroke pivotal trial.
On ask Scott Kellen to take us through the financial results for the third quarter.
Thank you Rick Good morning, everyone as Rick mentioned, we announced our third quarter financial results and filed our quarterly report yesterday afternoon and again. These documents are both available on the diabetic and the SEC websites.
Starting with our balance sheet, which we strengthened considerably in September with the completion of the $30 million private placement to 10 accredited investors net proceeds from this transaction were approximately $29 9 million and as of September 32021, our cash cash equivalents and marketable securities increased to <unk> 48.
$1 million up from $27 5 million as at the end of December 2020, we.
We believe our current cash will support the clinical development of <unk> 199, and our operations through the end of 2023.
Now our research and development expenses for the third quarter increased slightly to $2 3 million up from $2 2 million for the prior year period.
While R&D expenses increased to $6 9 million for the nine months ended September 32021, compared to $5 1 million for the nine months ended September 32020, an increase of $1 8 billion.
The increase for the nine month comparison was due to a number of factors, including cost incurred for our pivotal remedy two clinical study.
Increased year over year costs related to manufacturing process development and increased personnel costs associated with adding staff to support R&D operations.
These increases were partially offset by decreased costs incurred for our remedy phase II stroke study, which completed in the prior year and our Redux study as the number of enrollments declined in the later stages of this study.
Our general and administrative expenses were $1 1 million for the third quarter down from $1 2 million in the prior year period.
G&A expenses increased to $3 5 million for the nine months ended September 32021 up <unk> 2 million from $3 3 million for the nine months ended September 32020.
The increase for the nine month comparison was primarily due to increased professional services costs and increased personnel costs to support our expanding clinical programs. These increases were partially offset by reduced noncash share based compensation costs.
Our net cash used in operating activities for the nine months ended September 2021 was $9 4 million compared to $6 2 million for the nine months ended September 2020. These.
These increases relate primarily to the increase in the current year net loss and were partially offset by the noncash share based compensation and the effects of changes in operating assets and liabilities and to reiterate we believe our current capital will support the clinical development of <unk> 199, and our operations through the end of 2002.
Three.
Now, let me turn the call back over to Rick. Thank you Scott. So as you can see we had a very productive third quarter. We made significant progress in our lead program for stroke, initiating a pivotal trial and adding activating clinical sites. We also expanded the trial protocol to formally include recurrent stroke as a second independent primary endpoint.
Which could also be the basis for approval of <unk> as a potential separate label and obtained FDA fast track designation for <unk> for the treatment of these patients. We also obtained an important validation of the mechanism of action of <unk> nine from our Redux phase II trial as well as.
Further guidance on the next steps for our <unk> program in renal disease. Finally, we strengthened our balance sheets, and we are well positioned to execute our plans.
We reviewed today with that I'd like to open the call for to the operator to operator, if you could please introduce the first analyst.
Thank you and just as a reminder, if you would like to ask a question. Please press star one on your telephone keypad and our first question is from Alex Nowak with Craig Hallum Capital Group. Your line is open.
Great. Good morning, everyone. So I was just hoping we could touch on the next steps here for the chronic kidney disease data obviously the data looked.
Good from the kidney week I would say similar to the interim update we got a few months back more focus on the Iga Nephropathy group, but just where do you think we'd go forward with this do you expand the phase two to enroll more patients in that specific cohort do you launch a new study a phase to be or do you take this to the FDA.
And as for next steps potentially a pivotal.
Yeah, Thanks, Alex so as of.
Right now our focus clearly is on stroke.
So we don't have an update at this time in terms of what's next for CK D.
But I will say, we are looking at the data more carefully.
We're encouraged with some of the biomarker data of showing some early signs of disease modifying and so we'll be talking to our scientific advisory board and others and looking at the future path, but really we want to make sure that we're staying focused.
On the stroke program.
Yes.
That makes sense.
I just wanted to clarify how many sites do you now have enrolling for the stroke program and the interim readout of the first half of 2023 is that a little bit later than your original thinking maybe it goes to some of the site enrollment issues you've experienced due to the delta variant.
Yes. So we have one site that has been set up and as I mentioned, we have 50 sites that were at different stages in terms of moving them forward. So we have found that we are a few months behind what our initial timelines are and so the two key variables on this our site enrollment.
And I think we're very encouraged that we're not seeing any competitive studies, but it really hasnt been challenges with.
Staffing at a lot of the sites and then the other key component here is the number of patients that are added per month per site.
And so we are basing this right now on one patient per site every four months based on historical levels and we believe with the profile and so if you think about a patient comes into the hospital. This is this is a distressed situation.
And they have to make a decision, but they have 24 hours to make this decision and so they come in first and importantly, this is a drug that we believe is safe. This is simply restoring a protein that is in deficit and if a patient's fortunate enough to get on therapy.
We think that this could really make a difference in their ability to have a recovery. After 90 days, but maybe even more importantly rationale why patients should consider joining us at that risk of a reoccurring stroke in the first few weeks. After the first often these are much more devastating in something that the patients and their caregivers should be very concerned about.
So we believe from this profile that theres, a real opportunity that.
Patient recruitment could be much higher than what we're anticipating but we basis when we think of as our conservative estimates for recruitment.
Yes, no that makes sense and do you have plans to submit a separate fast track or <unk> breakthrough designation for stroke recurrence and then just on the personnel buildup here to get the company ready for this much larger study, what who else do you need to add to the company here to be fully positions as you move through this.
Yeah, So right now.
Now let me have the fast track designation, we are looking at other expedited reviews, including potentially breakthrough for for the stroke recurrence in terms of the study.
Added several new staff to Harry's team we're.
We're working closely with our contract research organization and we are also in the process of.
Bringing on a chief medical officer to further help.
It allowed us to execute and really focused right now on getting the study fully enrolled and getting the data.
Alright, I appreciate the update thank you.
Our next question is from Thomas Flaten with Lake Street Capital markets. Your line is open.
Great. Good morning, Thanks, guys for taking the questions.
Rick just to clarify in the stroke study are all the sites U S based or the international as well.
Yes, it'll be all U S based.
Well, we will look at in the future potential expanding but right now the focus is on the U S.
And then could you talk a little bit about the unanswered question to date of Alpha splitting.
In the stroke study between the two end points kind of where your what your thinking is around that.
Yes, so first I wanted to get clarity from the FDA, if they we agreeable with our protocol amendments, where we have two independent primary endpoints stroke recovery in stroke recurrence. So now that we have that and.
Very pleased.
We are now looking at as part of our finalizing our statistical analysis plan, we're going to look at the potential for having no alpha splitting. So this is something that we're looking at but importantly, if we see statistical significance on both the stroke recovery in stroke recurrence it'll be a huge win for us.
Great and then just one question on the CK D data from kidney week.
If you look at the ACR numbers in the greater than 500 microgram groups. There was a significant drop in blood pressure in the African American population, which led to a decrease at least in the lower dose level and you can kind of link those two if you have less blood pressure you have less clearance, but interestingly in the Iga group. There was also robust UAC or decrease but no.
And blood pressure. So there are two different dynamics going on there could you just help me understand why theres no blood kind of.
What mechanism might be behind the USTR drop in either group.
Yes. Good question there is a physiological difference in the mechanism of action here with <unk> as it works with these two different disease states respectively.
And the African Americans that are hypertensive. This is a very difficult group to reduce their blood pressure and youll see this type of reduction was remarkable.
In regards to them being normal tensive. The body sees this as being a normal blood pressure and does not respond to the mechanism of action of <unk> in the same way and thus we do not see a reduction.
Got it that's very helpful. Thanks, guys for taking the questions.
Yes.
Our next question is from Francois Brisbois with Oppenheimer. Your line is open.
Hi, Thanks for taking the questions. So on the powering side. If they were independent is that where you're speaking of that you can potentially get it to just below P value of 0.5 instead of the point.
250 to five.
Okay.
Absolutely.
Okay, and what would it take.
Is that just a what is the work to be done where you would feel comfortable being able to power it that way.
So the study has been powered for both of these endpoints stroke recurrence in stroke recovery.
Powered for 90% to see statistical significance.
Okay. Okay. So.
And then in terms of the timeline you've talked about.
The answer to Alex here. So I think we kind of seen there was a hint that it would probably be.
Probably later in 2022 event for the interim look so that little delay is.
Is new.
From from from the last quarter call or is it kind of still in line, where we're expecting first half of 'twenty three.
Yes, I think we are.
A few months back from where we were initially anticipating and Thats really result of the little slower recruitment of new sites.
So it is going a little slower, but I think we're encouraged more recently in particular down south and.
In terms of the Delta variant of Covid.
Is dropping rapidly and we see the sites much more interested open to joining the study, whereas going back in the summertime.
There were times are just sites didn't even want to didn't want here with any studies.
So I think a few months off and this is this is going to be something that is it's going to be some give and take here. We're learning we're learning how quickly the sites come up and importantly, we'll be learning on how.
Fast the patient recruitment is at the site level.
Great and then just lastly on the potential for breakthrough designation on stroke recurrence.
Is that something that you would need at least one interim look or you think that is something that potentially could be achieved.
The existing data.
Yes, it's something that we're currently looking at and particularly when you look at our existing data from our phase II trial.
Small study 91 patients, but we have prevented the stroke recurrence.
Whereas the placebo had a 13% so it will be based upon that data the fact that a statistically significant.
And then in fact, if you look at what else is out there, there's very few compounds and treatment options for patients who've had a stroke and are at really a great risk of having a second stroke in the weeks following the first.
Sounds good. Thank you that's it for me.
We have no further questions at this time, Mr balls, I'll turn the call back over to you.
Alright, again, we'd like to thank everyone for joining us. This morning. We appreciate your interest and continued support please stay safe in these challenging times and this concludes our call today.
Yes.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Yeah.