Q3 2021 Biomx Inc Earnings Call
Greetings and welcome to the Biomet, Inc. Third quarter 2021 financial results.
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 as.
As a reminder, this conference is being recorded I would now like to turn the conference over to your host Ms. Marina wealthy senior Vice President Finance Probiotics. Thank you you may begin.
Thank you and welcome to the Bionics third quarter 2021 financial results and corporate update conference call. The news release became available just after six a M. Eastern time today and can be found on our website <unk> bionics dot com a replay of this call will be available on the investors section of our web site.
Right.
Before we begin I'd like to review the Safe Harbor provision.
All statements on this call that are not factual historic statements may be deemed forward looking statements for instance, we're using forward looking statements. When we discussed on the conference call. The design aim expected timing and interim and final results of our preclinical clinical trials and studies, including resumption.
A certain development programs and implications of changes in senior management, the sufficiency of our existing cash cash equivalents and short term deposits to fund our operations until the end of 'twenty three the potential to receive up to $15 million in additional loan tranches, if certain milestones are met our pipeline in there.
Mentum future shareholder returns and the potential of our product candidates.
Except as required by law, we do not undertake to update forward looking statements.
The full safe harbor provisions, including risks that could cause actual results to differ from these forward looking statements are outlined in today's press release, which as noted earlier is on our website.
Joining me on the call. This morning, Jonathan sentiment as Chief Executive Officer, and Dr. Savage It put a gun to our chief Medical officer with that I will turn the call over to Jonathan.
Thank you Marina and good morning, everyone.
In planning for the years ahead bionics has made the decision to prioritize the development of our cystic fibrosis in atopic dermatitis as part of the category.
<unk> has the potential to generate proof of concept clinical data readouts in 2022.
Next well discontinued development of its active program.
We believe that by focusing on the efficient use of capital on selected programs. We can generate clinically meaningful proof of concept data, we will best position our company to drive value creation for shareholders.
With this decision we will postpone our development efforts temporarily and inflammatory bowel disease and colorectal cancer and currently intend to resume development. It can be used for IBD in CFC programs in 2023, assuming supportive platform data.
Importantly, our new strategic focus will have a positive impact on our balance sheet. This may allow us to extend our cash runway by up to six months until at least the end.
2023.
In addition, <unk>.
As that may become available to us under our venture debt facility upon satisfaction of certain specified milestones.
Either extend our runway through the first half of 2024.
We therefore believe that we remain well positioned financially to our expected clinical data readouts.
The doses in atopic dermatitis.
Let me now briefly review, our cystic fibrosis, or CF, and atopic dermatitis or ATM program.
The secret buses.
<unk> four is a phase Costco candidate for the treatment of lung infections in cystic fibrosis patients. It is designed to target pseudomonas, arguing for peers and also at the cure that causes chronic respiratory infection and is a main contributor to morbidity and mortality in patients with CF.
You have patients suffer from chronic infections, and typically require prolonged and repeated courses various antibiotics overtime.
And that's what these therapies begins to diminish as multi drug resistant bacteria strains appear.
To address this significant unmet need we have designer product candidate <unk> four do not only be active against antibiotic resistant strains of Paragon also.
Also penetrate biofilm, an assemblage of surface associated microbial cells and closing extracellular matrix substance that is known to cause of antibiotic resistance.
In consultation.
Food groceries therapeutic development network clients to conduct a phase <unk> trial comprised of two parts.
Part one of the.
<unk> a trial will evaluate the safety pharmacokinetics microbiology and clinical activity of <unk>.
Number four with single ascending dose followed by multiple doses in each CF patients that are confirmed to have chronic PR donoso respiratory infections.
We now anticipate results from the part one of this trial in Q2 of 2022 part.
Part two of this trial will evaluate the safety and efficacy are big double for treatment over 10 days and 24 subjects with chronic peer getting us a respiratory infections.
St population, that's part one.
And part two of this trial are currently expected in Q3 2022.
Now, let me turn to our program in atopic dermatitis in October we were pleased to announce an agreement with my room for atopic dermatitis candidate <unk> five.
As the leading dermatology focused pharmaceutical company in Japan. My room is an ideal partner to help us maximize the potential value of <unk> five in Japan.
The agreement provides <unk> with a right of first offer the license <unk> five in Japan.
And this offer will commence following the availability of results from a proof of concept phase one two study, which is currently enrolling patients to evaluate the safety and efficacy of <unk> below five.
We were also pleased to announce that Meru made an equity investment in bionics of $3 million at a premium to the market share price intended primarily to support the ongoing phase one two study.
Given the dearth of Meru expertise in dermatology product as Amit we were pleased to enter this agreement, which provides external validation for our paid directly approach in treating <unk>.
As a reminder, my own phage cocktail Bx O five targets Staphylococcus aureus or S aureus epic Jeremy implicated in.
An exacerbation of inflammation in atopic dermatitis.
Staph aureus is known to be more abundant over the lesion skin of atopic dermatitis patients compared to the skin of healthy individuals or non lethal skin of atopic dermatitis patients.
The target bacteria also increases in abundance and becomes dominant ones accretion experiences flares with respect to the timing of the phase one to read out due to a scheduled backlog from ongoing pandemic, we experienced a minor delay in meeting with the FDA to review this program.
As a result, we now anticipate data third quarter of 2022.
I'd like now to turn the call over to Marina Woolfson, Our senior Vice President of Finance and operations to cover our financial results for the third quarter of 2021.
Thank you Jonathan.
A reminder, the financial information is available in the press release, we issued earlier today and also in more detail in our Form 10-Q, which we plan to file later today I will walk you through some of our brief highlights.
As of September 30th 'twenty, 'twenty, one our cash balance and short term deposits were $68 $3 million compared to $57.1 million as of December 31st 2020. The increase was primarily due to net cash provided by financing activities, partially offset by net cash used in.
Operating activity.
During the third quarter bionics raised $15 million and a registered direct offering and entered into a debt financing agreement of up to $30 million of which $15 million has been received.
Mentioned earlier in the call based upon the company's new strategic focus on the cystic fibrosis and atopic dermatitis programs, we now expect existing cash cash equivalents and short term deposits.
Sufficient to fund the company's current operating plan until the end of 2020 three.
Additional tranches that may become available to the company and joint venture debt facility upon satisfaction of certain specified milestones could further extend the company's cash runway to the first half of 'twenty 'twenty four.
Research and development expenses were $6 $6 million for the three months ended September 30th 'twenty, 'twenty, one compared to $6 $1 million for the same period in 2020.
The increase was primarily due to increased expenses related to conducting preclinical and clinical trials of the company's product candidates and an increase in stock based compensation and salaries and related expenses, mainly due to the growth in the number of employees in R&D and clinical activities.
General and administrative expenses were $2 $8 million for the three months ended September 30th 2021 compared to $2.4 million for the same period in 2020.
The increase was primarily due to an increase in stock based compensation and salaries and related expenses, mainly due to the growth in the number of employees.
Due to an increase in expenses associated with operating as a public company, such as directors and officer insurance and did your expenses, resulting from moving into new premises.
Net loss for the third quarter of 2021 with $10 million compared to $8 $8 million for the same period in 2020.
Net cash used in operating activities for the nine months ended September 30th 2021 was $18 $5 million compared to $17 $3 million for the same period in 2020.
And now I'll turn the call back over to Jonathan for his closing remarks Jonathan.
Thank you Marina.
We are also announcing today that our chief medical officer solids, particularly into will be stepping down as CMO and transitioning into a consulting role starting at the beginning of 2022 since.
Since joining bionics SGR has made significant contributions in helping advance our product candidates into clinical development. We think so Jeff for their dedication numerous accomplishment and we look forward to working with her in this new capacity.
The steps we've taken to focus on the CFO Avi programs are intended to strengthen our company preserve our strong financial position and I expect it to ultimately drive shareholder returns as we near 2022 biomass remains well positioned with our new strategic focus we have significant opportunity to demonstrate proof of concept data that would success could produce it.
One value inflection points.
We'd now like to open the call for questions.
Operator.
Thank you at this time, we'll 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 queue.
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.
Our first question comes from the line of Joe Pan Janus with H C. Wainwright. Please proceed with your question.
Hey, good morning, everybody. Thanks for taking the questions.
And thank you for the details and very efficient to update to.
Two questions Jonathan first with regard to the.
Sort of postpone plans as you described it for IBD in CRC I guess I would ask it. This way do you have any optionality, where these programs can percolate in some fashion either through I S T or potential business development activities.
Hi, Joe and good morning, Thank you for the warm words.
Absolutely you know, it's something we're looking into I think a lot of the strategic focus is being aware of the external environment.
Firemen and the microbiome. So I think we want to focus on what can generate data in patients.
But theres, obviously continuous BD activity and sort of exploring potential partnership that can support.
Supported with.
Additional external support right I think we are getting interest in these programs. There are interested there are interesting, but we really want to focus at least in the existing resources that we have on CFM esophagus.
Of course, Thanks, and then I guess more general question as well, where we live in interesting times right now with the global supply chain.
Chain constraints et cetera, I was just curious if you've had to plan ahead are you experiencing any difficulties with regard to manufacturing readiness for your existing studies and planned studies.
So I think one of the big advantages is that we have in house manufacturing. So a lot of it we can control, but you were totally right I think not all of it is in our control and we do have we did have some supplier issues.
Which are causing a slight delay in the CF program some.
Coffee monitoring and trying to get as much as we've done in C. In India, a supply chain that we can.
Obviously, not everything is in our hand right.
Great. Thanks for the details.
Okay pleasure as always.
Thank you. Our next question comes from the line of Michael Higgins with Lundberg Thalmann. Please proceed with your question.
Thanks, operator, good afternoon, guys. Thanks for taking the questions just to follow up here I guess on go below three was there anything in the phase one data that you didn't like or is it more market opportunity cost to get to the data any additional help there would be helpful.
Right. So good morning, Michael I think we really like the <unk> three data.
Okay, Yeah, PK profile as good as we could have hoped for so I think <unk> been phage Orly does look very promising I think to your point, we just want to be cognizant because with the data that we can generate within 2022 would be <unk>. Three is a proof of mechanism, meaning can we reduce the bacterial load in healthy volunteers.
Thank God that we just did prioritize over getting data in patients right and CFM atopic derm, so with all the resources in a favorable environment, we would definitely pursue all of those I think just being cognizant of what's going on we're putting CF in atopic derm first because they have data in patient and can indicate not only targeting engage.
Man, meaning reduction in targeted material, but also hopefully some signals of a clinical effect.
Makes sense I appreciate that and then one of them down below four.
In the in the trial design in the Phase Iia portion of our patients allowed to enter the trial on antibiotics is it basically a standards of care plus or minus still below four.
Excellent question I'll, let Tyler address.
Yes, thanks, Jonathan.
Yes, you are correct, it's the standard of care inhaled antibiotics.
It will be continued and then some of them won't have each added on to them. So its weight class antibiotics versus antibiotics alone.
Okay I appreciate it I'll jump back in the queue. Thanks, guys.
Okay.
Thank you, ladies and gentlemen, as a reminder, if you'd like to join the question queue. Please press star one on your telephone keypad. Our next question comes from the line of Christian <unk> with Cantor Fitzgerald. Please proceed with your question.
Hi, good morning, and good afternoon, and thanks for taking my questions. The first one I have is could you discuss how much of this pipeline prioritization was based on an understanding of the target bacteria the potential market size unmet need in the early effects you've observed and then could you please remind us.
How you're thinking about the potential market opportunities each for atopic dermatitis and cystic fibrosis respiratory infections.
Sure.
Morning Kristen.
Good question, So I'll try to address I think in terms of pipeline.
I think all of the programs were exciting right I think thats, what we pursued them to begin with obviously by the way the market potential in IBD is the largest but I think is as we looked at market conditions and general market sentiment and the microbiome, we said probably the things we should prioritize those that would generate.
Not only reduction of target bacteria, right, but actually indication of clinical effect, I think where the investor community is they want to see an effect with a phase intervention, which is beyond the effect on target bacteria. So I think that's kind of the way we looked into it again pending that the opportunities to kind of make the.
I have an interesting market potential right. So that's why in CF in atopic derm, we hope to generate data in patients in 2022 right versus the inflammatory bowel disease program, which we can generate data in healthy volunteers mechanistic data honestly cancer as an earlier program. So there is just additional.
These are studies, so I think that's kind of how we made the cut of what goes in into 2022 in terms of market potential right. So.
Atopic Derm is a very large market, we're talking about a $5 billion opportunity it's expected to almost triple in the next five years or so based on some of the analyst reports right to a very large unmet need the majority of the market is with.
With biological which are most of the injectable.
That has some safety concerns so theres really no appetite for something safe, especially when a third of the patient population is pediatric so something that would potentially be topical and David can take a large chunk of that market and so that's quite an exciting opportunity and we see that with incoming from potential partners and I think the partner.
We just announced with Meru right in the field of cystic.
Cystic fibrosis, you do have.
The leading antibiotic that CF patients are using or selling north of $601 million per year right. So that's quite an opportunity and if you can have something that could potentially be better.
This could even be larger akatea right the whole.
I think if we look at.
What's happening in CF, we've seen vertex build a very large franchisee modulators right thinking $6 billion annually of course I don't think this is going to be of that extent, but it should be if it has a profile that we want somewhere between the tobramycin and ongoing.
Ongoing it toward the.
The markets sales FERC generator.
Thank you for that and as it relates to be X O O. One in acne I know in the past you discussed that you were looking at different jelen topical compositions. So given that atopic dermatitis is also intended to deliver phage topically wondering if there are any important read throughs to consider from these acne.
Specifically related to this delivery route.
Right. So Christian I think we're all kind of thinking and analyzing the additional acne data and I think we are thinking what what ways do we want to.
Improve and gather more insights into the atopic Derm study.
Study I think one thing we do know one of the key challenges with acne is that they procure deep inside the sebaceous gland right. So.
Deeper into hair follicle there are no other procure there for the.
C academic year, so that's an extra challenge.
In in atopic derm the staff for US is a much more mobile, but it isn't that deep inside the layers that can sort of move back and forth. So I think there is.
There's a lot of support to the material will be a lot more accessible.
<unk> said that I think we're still analyzing all the data answer compiling all the data to think about whether theres any takeaways that we want to implement in the atopic Derm study.
Okay. Thanks, and then I just wanted to clarify for B X L. Three that P. S. C still intends to remain an indication you intend to focus on in the future here along with IBD.
Yes indeed.
As we talk to some people think that PSC is even more interesting than IBD writes an indication that there is no.
No approved treatment is a huge unmet need to apologize if I were if we werent clear, but definitely in the program that is relevant for both.
Okay. Thanks for taking my questions Jonathan.
Sure.
Thank you. Our next question comes from the line of Cana Cai with Chardan capital. Please proceed with your question.
Well Hey, Jonathan.
So no the CF in a D or even more important.
Can you just walk us through the type of data, we will see from each of those programs in 2022, starting with CF in the in the part one you know, obviously single and multiple ascending a single ascending dose and multiple dose, but and that first tranche.
<unk>.
What will we get obviously these our CF patient pool, what would you guys report beyond safety.
<unk>.
Alright, so good morning, Kay I think as you look into it.
In the study as you noted there are two parts as guided by and by.
By the CF Foundation and their valuable support part one follows a bit of a sad Mad study right. So we have eight patients six are getting treatment to a game placebo those aren't getting treated are getting a first a low dose and high dose then a few days with the high dose right. So they're not getting a lot of exposure I think obviously this is.
The safety readout, but we are looking for some some initial signal whether it could be a reduction of the target Victor and so I think there's a good chance that we see some reduction compared to baseline and so I think that's what we're looking for right. Obviously nothing of statistical significance as a very small study and definitely not.
Spectrum to see any clinical improvement in such a short duration. So that's in terms of part one part two is it's a 10 day dosing. We have 24 patient 16 are in treatment or getting placebo and this follows some of the observation from the compassionate use.
That we're giving with phase in the states and here I think we're basing it on what was actually.
Sure.
It was.
A more robust signal on reduction of target bacteria and there was an initial signal on the improvement of lung capacity right. So we're in a part two we want to see clearer signal a reduction of the student want.
And we're hoping to see some of these initial signals the world we've seen in the compassionate use study.
Okay.
Okay, and then how 'bout for atopic derm, what what would we see and <unk>.
Second half of this year in terms of any type of efficacy signal.
So in the atopic Derm study.
Obviously 48 study.
Here, we want to see that we can.
Pick up a reduction of the target bacteria, that's where we want to see robust signal.
And we're also looking or at least trends or any indication that there is improvement.
In clinical outcomes, such as the easy score it scores right. So we're not necessarily expecting here a statistical significant robust signal, but we're looking for some some separation as was seen in earlier studies as well with other compounds have went after staff writer.
Yeah.
Okay alright. Thank.
Thank you.
Pleasure.
Thank you.
Our next question is a follow up from the line of Michael Higgins with Lundberg Thalmann. Please proceed with your question.
Thanks, again, operator, thanks, Jonathan for the follow up.
You discussed the out licensing of.
Rates in Japan, just wanted to take a bigger broader look I guess across the portfolio.
Are you looking to out license <unk>.
And in Europe, others in Japan, et cetera, just trying to get a sense for your BD efforts in there.
The timing for such things.
So great question I think we're actively being a platform player we're actively thinking about potential partnerships I think.
Graham's we'd like to partner in some programs, we'd like to keep it.
That was also to the discussion.
The point I think Joe brought up earlier. So for example, IBD would be a program to partner not totally right now, but we all are aware of you know the cost and complexity of the later clinical studies. So that's a program that I think will be actively looking for potential partnership.
Yes, it's something we want to keep.
Internal.
It's an orphan designation I think we're getting a lot of support and advice from the CF Foundation.
And there's ways that we can go and make more progress that we'd like to keep it ourselves and atopic derm is a program, which is somewhere in the middle right. I think we're quite excited to find a partner in Japan in that.
We'll get the rights in the rest of the world we get their input we get external validation. So that makes sense. So I think it's every program.
For the market side, and the amount of investment and risk that is needed in our site right.
Colorectal cancer is an interesting program that could generate partnerships early on as we can expand it to multiple different types of cancer, there's really room to grow even if we partner one specific procure in one specific tumor.
It really makes sense. Thanks, and then last one your cash guidance through 2023 is this with or without any new programs. Besides still below four and Wi Fi.
Yeah.
So I think the guidance assumes that we don't I mean, we're not going into 2000 22023, right. We're not going to go full steam on all three programs simultaneously, but it does support the pipeline is.
I appreciate it thanks guys.
You bet.
Thank you ladies and gentlemen, this concludes our question and answer session I'll turn the floor back to Jonathan for any final comments.
So I wanted to thank all of you again for joining US. This morning, we look forward to providing you future updates on our CF in atopic Derm clinical program throughout 2022 have a wonderful day and please reach out to US if you have any questions. Thank you.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.