Q3 2021 Vyant Bio Inc Earnings Call
[music].
Good afternoon, and welcome to the volume.
Third quarter, 'twenty, 'twenty, one conference call and webcast.
Today November 11, 2021, the company issued a press release summarizing results for the third quarter 2021, and will be filing its Form 10-Q tomorrow morning before the market open at 930, a M eastern time.
Today's discussion will provide an overview of activities in the quarter and is being recorded and a replay of the webcast will be available on the buy it buy it by our website following the call.
Alternatively, the link can be sent to you by contacting IR.
<unk> bio dot com.
All participants on this call will be in a listen only mode. During the presentation. The presentation will be followed by a question and answer session. At this time I would now like to turn the conference over to Jay Roberts, Chief Executive Officer of buying buyer. Please go ahead Sir.
Thank you operator.
Thank you all for joining the buyer bio Investor Conference call and webcast for the third quarter 2021.
We're pleased to have completed our second full quarter as volume bio.
Now that the merger and related integration activities are completed we have directed our full focus on executing our business plan.
There's also a great pleasure to speak with you today to share our enthusiasm and to give you some insight into how we envisioned to near term future of buying <unk>.
Additionally, we are going to present, the financial results for the third quarter ending September 30th 2021.
On the call with me today is <unk>, Chief Financial Officer, Andy <unk>, and our Chief Scientific Officer, Bob for a model.
Following the Safe Harbor statement I will provide a strategic overview and update on recent corporate developments and the vision ahead.
And then Andy will take us through a brief financial update and discuss key accounting matters for the third quarter.
We will make some closing remarks, and then we will open up the lines for questions for Andy Bob and me.
I'll now turn the call over to our CFO Andy left right.
Thank you Jay and welcome to all.
I'd like to remind you that various comments about future expectations plans and prospects constitute forward looking statements for purposes of Safe Harbor provisions under the private Securities Litigation Reform Act of 1095.
<unk> bio cautions that these forward looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated including risks described in the company's filings with the SEC.
Any forward looking statements made on this conference call speak only as of today's date Thursday November 11, 2021, and <unk> bio does not intend to update any of these forward looking statements to reflect events or circumstances that would occur after todays date.
This conference call is also being recorded for audio rebroadcast in via <unk> website at Www <unk> com.
With that I would like to turn the call back over to Jay Roberts, Jay Thanks, Andy.
I'll begin the call I think it's important to remind everyone that the third quarter was the second full quarter. Our company has operated as buying buyout.
Today, we will highlight the progress and accomplishments we have made in the seven and a half months operating as one business since the closing of our merger.
We have repositioned Bryant buyer with an emerging global drug discovery company focused on identifying small and large molecule therapeutics to treat central nervous system and oncology related diseases.
We believe there are significant value creation drivers in the drug discovery sector, and we intend to use our discovery engine.
Drive cost savings speed and insightful decision, making to identify unique biological targets and novel therapeutics to treat patients with acute neurological and oncological indications we.
We have made promising progress, which we will highlight for you today.
To begin I'd like to recap a few non financial highlights from the third quarter.
First we hired Robert T for remote junior as our CSO to lead our drug discovery efforts, including lead target and candidate identification all the way to <unk> submissions Dr.
Dr promote joined US a few weeks ago and is already having a meaningful impact on our efforts in discovering novel Therapeutics.
He brings over two decades of drug discovery experience in academia and industry with a proven track record of excellence in next generation drug development, focusing on severe neurological disorders and neuroscience disease indications.
His scientific expertise is recognized internationally.
Dr. <unk> extensive experience with scientific research and drug discovery will be invaluable to us as we complete feasibility programs with leading biopharma companies.
And further develop our preclinical and translational strategy for driving a portfolio of therapeutic candidates from early discovery to human proof of concept.
While we while we have yet to announce the completion of a biopharma co development or licensing agreement. We are continuing to make progress in this regard evidenced by two feasibility programs. We are running with potential long term partners. We believe these programs will show additional validation of our platform in conjunction with other proof points that are being worse.
On and will result in these potential partnerships taking shape early next year.
To further support our Biopharma partnering efforts a few weeks ago, we announced a collaboration partnership we entered into with Missouri Therapeutics Messrs of U S and Tokyo based technology and marketing focused company with a successful track record in the pharmaceutical industry we.
We entered into this engagement with Missouri to jointly pursue co development and out licensing partnerships with pharmaceutical and biotechnology companies with our initial activity is focused in Japan that leverage <unk> advanced analytics and complex human derived biology to drive their drug discovery.
Missouri Therapeutics team has decades of experience in all areas of drug discovery and development, including building biopharmaceutical commercial infrastructures and partnerships from concept to consummation.
In terms of our disease model development and compound discovery efforts, we continue making progress on our internal lead compounds and have deeper investigation of their efficacy and toxicity.
In addition, we are deep into the investigation of the biological basis, a potential lead compounds specific mechanisms of action.
Additionally, we completed a second large screening of AI generated novel compounds for the Ret disease program in conjunction with our collaboration partner Adam was yielding promising results. These results include further hit expansion across two unique biological targets and several novel compounds.
Our Ret program continues to positively iterate on narrowing our lead indication identification.
To further validate our ret syndrome disease model. We recently ran additional screenings to show concordance of our data with clinical data have begun some animal efficacy and safety modeling or about to run at a comparative screen of over 5000 compounds to create additional validation data and will that'd be moved.
Through the hit to lead optimization process.
Also in Q3, we entered into a collaboration agreement with cyclic app, combining <unk> patient derived complex Organoid biology, alongside cyclic as proteome wide artificial intelligence enabled discovery platform to identify new treatments for CDK <unk> deficiency disorder, we are.
We made significant progress in the CDK <unk> program.
Initially, we established and further optimize our internal micro Brian platform to minimize variability and adapted to specific neuronal phenotypes.
On that note, we developed different state of the art assays to characterize the disease etiology further and advance our portfolio of genetic epilepsy readouts. Additionally.
Additionally, we have designed a library with more than 5000 compounds focusing on well defined mechanistic relevant compounds with proven low toxicity and high clinical relevance for this disease category.
Using our customers buy our library, we performed one of the most extensive functional phenotypic screenings.
Leading to identifying many compounds that recover the CDK <unk> phenotype as well as novel potential molecular targets for <unk> five.
Finally, we identified new targets for further evaluation based on cyclic is machine learning proteome wide platform and our internal expertise.
The <unk> and Celerity collaboration also remains on schedule as we previously announced this collaboration is intended to introduce a drug discovery process to rapidly design.
Design and optimize biological drug candidates using artificial intelligence and in vitro patient cell based avatar clinical trials.
The goal of the collaboration is not only to design candidates that are likely to be successful in clinical trials, but have also been assessed for efficacy numerous patient specific cell based models before even making it to the clinic.
In silica protein design has been updated to include state of the art recurrent neural network structure with additional incorporation of new attention mechanisms.
In addition, the <unk> silicone model has been further trained on more than 20 million protein sequences. These.
These improvements have formed the basis for a second round of novel protein sequences.
Protein production will begin shortly on these novel designs and binding and functional assays for further proof of functionality will follow in the coming months.
I will now turn the call over to Andy <unk>, Our Chief Financial Officer to discuss the financial results for the third quarter.
Thank you Jay.
Everyone and thank you again for joining our call today I will review our balance sheet position as of September 30th 2021, and our financial results for the third quarter of 2021.
<unk> was deemed to have acquired cancer genetics for accounting purposes, and the merger closed on March 30th 2021, the company's current year financial results include the cancer genetics operations since the merger date.
And the 2020 financial results are based on <unk> operations.
As the increases in revenues cost of goods sold and operating expenses during the three and nine months periods ended September 32021, as compared with the corresponding prior year periods largely reflects the impact of the merger I will focus my comments on current year post merger activities.
Cash and cash equivalents totaled approximately $23 2 million as of September 32021.
October 2021, we signed a $1 $5 million lease line of credit and completed a $496000 sale leaseback transaction.
Total revenues increased by $1 $2 million to $1 $5 million during the third quarter of 2021 as compared with the same prior year quarter for the nine months ended September 32021, total revenues increased by $3 1 million to $3 7 million.
As compared with the prior year period.
Cost of goods sold service aggregated $1 $1 million and $2 1 million during the three and nine month periods ended September 32021.
Resulting in a service cost of goods sold of 79, 9% and 66, 1% respectively.
The increase in the cost of sales percentage for the third quarter of 2021 as compared with the 2021 nine months period.
As a result of deleveraging of the service revenue cost structure from a reduction of service revenues in the 2021 third quarter as compared with the second quarter of 2021.
Specifically <unk>.
Service revenue declined from $1 8 million in the second quarter of 2021 to $1 3 million for the third quarter of 2021. The company expect service revenue growth in early 2022, when contracted customer projects are expected to commence.
Cost of goods sold product aggregated $355001 1 million for the three and nine months ended September 32021.
Resulting in the cost of goods sold margin of 196, the margin deficit of 196700 15000, respectively.
As previously disclosed.
And our manufacturing at Sydney is pleased to disclose our product manufacturing capabilities at our Maple Grove, Minnesota facility currently have excess capacity to support future growth.
During the fourth quarter of 2021, the company commenced the technology transfer of certain research and development activities that are currently being performed at the La Jolla, California facility to the Maple Grove facility, which is expected to substantially increase this facility's utilization in 2022.
Research and development expenses for the three and nine months periods ended September 32021 increased by 349000, and 472000, respectively to $1 2 million and $2 $9 million, respectively. As a result of additional payroll cost and staff.
In the current year periods.
Selling general administration expenses were $3 3 million and $8 2 million for the three and nine months.
Periods ended September 32021. These expenses included $482001 4 million.
Non cash expenses for depreciation amortization and stock based compensation.
I will close for now and hand, the presentation back over to Jay Roberts for closing remarks Jay.
Thanks, Andy.
Come to the final part of this presentation I would like to conclude with the following takeaways first I'd like to reiterate how pleased we are with the progress our scientific teams are making on multiple fronts related to the existing programs. We discussed today that our activities in the third quarter focused purely on establishing.
Foothold in the industry and helping to fuel our activities into the fourth quarter and beyond.
Please stay tuned as we continue to make progress and begin to provide further validation and proof of concept results in the fourth in the fourth quarter and first quarter of 2022.
We also invite new listeners to become more familiar with <unk>.
As news and information becomes available we'll be communicating updates via press releases Linkedin, the new buy it buy a website and other social media outlets.
The rest of the parties are invited to sign up for the press release distribution list. Please visit our website with that I invite Andy referred to join me and the opening up of the line for Q&A.
Thank you.
The floor is now open for questions. If you have a question. Please press star one on your phone at this time to enter the queue.
Ask that while posing your question you. Please pickup your handset if listening on speaker phone to provide optimum sound quality.
Once again, please press star one on your keypad now if you would like to ask a question. Please hold a moment, while we poll for questions.
And there is a question from Ed White from H C. Wainwright Ed. Your line is live. Please go ahead.
Yeah.
Good evening, Thanks for taking my call My question.
Just.
Just a couple.
Maybe just for Bob.
Just wanted to get your thoughts on.
How we're buying is going to make.
Make sure preclinical data validation translates into.
Clinical data.
That's an excellent question and were starting with diseases for which there are monitored genetic defects that have been well documented.
In terms of the pathophysiology in the clinic and one of the key indications is going to be to be able to verify in the spheroid organoid system that we can measure the biomarkers that are known to be clinically translatable and the human situation.
Okay.
Great. Thanks, Bob.
And.
Maybe I can get it.
From Chase some.
Just some updates on the.
Right.
M. You repurpose drug I'm, just wondering I believe that you had been expecting that to perhaps get to a lead identification.
By the end of this year and then also if you can discuss the timelines you mentioned.
In your.
Former presentations two ind's ready for submission per year.
I believe in 2022 that would be ret syndrome and CK.
Hey, CDK L. Five.
Just wanted to get your thoughts on.
Timing, yes.
Yes. Good those are great question. Thank you. So just on the first part of that question.
Let me just say across both questions with Bob now, having joined the team and leading our scientific and data science teams.
He's got a significant amount of expertise and throughout his career Havent picked up kind of small small groups of late stage discovery of promising therapeutic targets.
And targets and carrying those all the way through <unk> and so he is kind of walked teams through that very carefully. Many many times. It is <unk> and that's a big part of why we were excited to have to have.
Bob join us and that'll be a big part of what he is going to take us through as it relates to the repurposed.
Question again, Bob only been on the ground for two weeks.
Now deep into that program with us and we anticipate that the timelines as we laid out originally will continue as we think about it.
We're certainly making good progress it's not this quarter, we would anticipate that will be.
Good progress into the first half of next year, and then to your point the other two programs behind it.
Both <unk> and <unk> five will be put on a program as we announced today as we talked about on this call.
Significant progress has been made on both of those programs and so we will continue again under Bob's leadership to drive those forward our ability to.
You know get to a place where we're gonna be meeting to where these a year. We think as you know a big part of our strategy.
We think about going into the upcoming.
Several years in front of us and so that's part of where we will continue to stay focused.
Okay great.
And can you make any.
Comment.
Two on your status of the Parkinson's and Huntington's programs as well.
I think again those are two places where we've been building disease models and that we have expertise.
In terms of.
Creating.
Three dimensional organoid platforms that allow us to take those those disease categories forward. Bob was also obviously actively involved in getting his arms around the status and the development of those programs those remain on our in our crosshairs as being programs that will be.
Things that will continue to progress and to work on and as of now that scientific teams continue every day, we're doing work in those areas and progressing our disease model capabilities.
Thanks Jay.
Maybe a final question to Andy just why don't you.
Get your thoughts on cash runway.
Mentioned cash of $23 2 million.
So actually the end of the quarter. Thank you Ed.
And thank you for the question and we continue to have the same sort of runway, we articulated last quarter, where.
While we believe that.
Cash runway will take us into.
Well into the first half of 2023.
As noted this quarter, we burned about $1 $1 million a month.
We anticipate that.
That would be a reasonable sort of.
Our cash burn and as I also noted in my prepared remarks, we've also.
Have you been able to leverage some.
Leasing capabilities, as well, which will further augment our cash flow.
Great. Thank you.
Thanks, Ed.
Thank you, ladies and gentlemen, if you would like to ask the question in the queue remains open at this time please.
Please press star one on your telephone keypad, if you'd like to enter the queue to ask a question at this time once again, ladies and gentlemen, that'll be star one on your telephone keypad at this time it seems like the ask a question.
And it does appear there are no further questions in queue at this time and with that I would like to pass the floor back to Jean Roberts for closing remarks.
Okay. Thank you operator, and thank you all for joining the call today.
We're very happy with our progress so far is an emerging global drug discovery company is rapidly identifying small and large molecule therapeutics to treat CNS and oncology related diseases.
We look forward to keeping everyone informed of our progress along the way and thanks again for joining the call today and have a great evening.
Yes.
Right.
Thank you ladies and gentlemen, this does conclude today's conference call and webcast you may disconnect at this time.
Thank you again for your participation and have a wonderful day.
Okay.