Q4 2021 Pieris Pharmaceuticals Inc Earnings Call
[music].
Greetings and welcome to the Paris Pharmaceuticals year end earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded I would now like to turn the call over to Tom Burke Chief Financial Officer. Thank you you may begin.
Thank you good morning, everyone and thank you for joining us for our year end 2021 conference call and corporate update on the call today, we have Steve Yoder, our president and CEO , who will provide a corporate overview and outlook on our pipeline tend to move our chief Medical Officer. He took Hoffman, our chief scientific officer and she.
Oh, well, our Chief development officer, who will be available for Q&A.
You can access the press release released this morning on the Investor Relations page of our website at Www Dot <unk> dot.
Dot com.
Before we begin I'd like to caution that comments made during this conference call may contain forward looking statements involving risks and uncertainties regarding the operations and future results of operations appears including statements relating to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position and <unk>.
Actual results or events may differ materially from those expressed or implied by such forward looking statements.
Factors that might cause such differences are described in our filings with the SEC, including our annual quarterly and current reports.
The information being presented is only accurate as of today and <unk> undertakes no obligation to update any statements to reflect future events or circumstances.
I'll now turn the call over to Steve. Thank.
Thank you Tom and thank you to everyone for joining us today for our 2021 year end earnings call last year was a busy year of execution for US we entered into several collaborations, including our respiratory and ophthalmology collaboration with R&D leader Genentech and a collaboration to further expand our partnered for one BB by specific pipeline.
We also initiated multiple clinical trials, including first in human studies for our four wall in BD PD lone by specific and we unveiled our new proprietary program in our respiratory franchise. All of these have set the stage for an exciting 2022 I would like to now take you through some of these highlights from last year and to discuss.
What do you expect for this year.
As many of you are aware our lead respiratory program is Prs <unk>, one 402, and inhaled IL four receptor alpha inhibitor that we are developing alongside astrazeneca for the treatment of moderate to severe asthma. The program is currently in a multicenter placebo controlled phase Iia study as the DPI formulation.
Earlier this year, we announced the successful completion of part one a or the safety portion of the one gig and the three Meg dose cohorts in that study.
And that portion of the study 31 moderate asthmatics controlled on standard of care asthma therapy, which consists of medium dose Ics with Mama, we're dose twice daily over four weeks randomized one to one to one across the two dose levels and a placebo arm.
Safety review Astrazeneca conducted included measures such as incidents of adverse events changes in laboratory markers PD, one and pharmacokinetics. Following a positive safety review Astrazeneca is now enrolling the efficacy part of the study for the one milligram and three milligram dose levels. In this portion of the study moderate on <unk>.
Control asthmatic, so on Ics LABA within blood eosinophil count of greater than or equal to 150 cells per micro leader and a fractional exhaled nitric oxide or <unk> greater than or equal to 25 parts per billion. At screening are then randomized one to one to one across the one milligram and three milligram dose cohorts NFL.
<unk>.
We are looking at improvement of <unk>, one at four weeks relative to placebo as the primary endpoint in this part of the study.
In parallel Astrazeneca is now enrolling the safety portion of the highest 10 milligram dose level, which is randomized two to one treatment to placebo, although we have guided to top line phase Iia data results from the study. This year. We are actively evaluating feasibility of our study timelines in the current geopolitical environment and we will up.
Date, our guidance in orderly course of business if needed.
Looking forward a positive readout from this study would be a trigger for the possibility of opting in the co development of Prs <unk> 60, with Astrazeneca within 30 days of the top line data from this study being made available to US alongside a development plan and our proposed budget, we can choose to opt in to co development of this program.
At one of two levels, neither of which includes an option exercise fee at.
That's the first level, we would be responsible for 25% of the cost share with a predetermined cost cap.
This presents what opportunity that when considering future development milestones would still cover a meaningful portion of our cost share and enable us to increase our share of potential sales milestones and royalties.
At the second level, we would be responsible for 50% of the cost share without a cost cap.
This opportunity would require more investment it would enable us to receive an attractive gross margin share.
If we choose not to participate in the ongoing co development of Prs <unk>, we would continue to receive development milestones commensurate to those if we had opted in at 25%, although the royalties and sales milestones would be lower than this first opt in tier.
As a reminder, beyond the co development options and whether we choose to opt in to co development at all.
We'll also have the option to co commercialize this program in the United States.
Beyond Prs <unk>, we are advancing three programs in collaboration with Astrazeneca, we jointly discontinued one of the <unk> discovery stage programs in the collaboration for which Astrazeneca was not able to validate and exploratory target, we retain co development and co commercialization options.
For two of the three remaining active discovery programs in the collaboration.
Now moving onto our most advanced fully proprietary respiratory asset I want to briefly discuss our plans for Prs $2 20, which is an inhaled anti calin protein targeting CTG F or connective tissue growth factor for the treatment of idiopathic pulmonary fibrosis Ips that we unveiled last year.
We reported encouraging preclinical data from the program last year and this year, we anticipate initiating clinical development starting with a phase one study in healthy volunteers, when we announced the program last year. We also announced that we received a grant from the state of Bavaria in Germany for approximately $17 million to.
This program for post Covid pulmonary fibrosis. This grant has since supported clinical readiness activities, such as GOP talks and GMP manufacturing and we will also apply to phase one clinical development, making recent and near term investments for this program very cost effective given.
Given the clinical validation of <unk>. In addition to the potential benefits of an inhaled antagonist to this target. We are excited about the opportunity. This program offers.
And as a reminder, we also have an ongoing respiratory in ophthalmology collaboration ongoing with Genentech that we signed last year and as part of which we have initiated joint discovery activities for the two committed programs. We are enthusiastic about partnering with Genentech and hope to give more updates on that alliance.
As it progresses.
Now I'd like to give an update on our clinical immuno oncology pipeline. We currently have two io programs in clinical development.
I O program is Sandra buffa, alpha or Prs 343, or <unk> for short.
<unk> is a proprietary <unk> her to buy specific we are developing separately for her too high and her two low gastric cancer in phase one studies. The drug showed single agent activity biomarker data supportive of its mechanism of action and an acceptable safety profile.
<unk> also showed activity in patients with immunologically cold tumors as well as those with her to low expressing tumors, both of which represent high unmet medical needs last month, we announced the dosing of the first patient in a phase II study for this program.
The study includes 220 patient arms in the first arm, we are evaluating <unk> in combination with <unk> and Paclitaxel in her two high gastric cancer patients in the second arm, we are evaluating sidra in combination with <unk> in her two low gastric cancer patients in both.
Arms Dissenter dose includes an 18 milligram per kilogram loading dose with a Q2 weekly eight milligram per kilogram maintenance dose. We expect to report data from the heart to low arm later this year and for the her two high arm, we expect to report data next year as.
As previously guided we have set a high bar for our go no go criteria for both arms, and objective response rate or or or or at least 50% in the her two high arm and of at least 40% and the her two lower of course, we will also be looking at duration of response and safety for both arms.
Yes.
Now in addition to the syndrome phase III trial, we also initiated the global open label Phase one dose escalation study to evaluate the safety Tolerability and preliminary evidence of anti tumor activity of Prs 344 also known as <unk> 095012, a <unk>.
BB PD L. One by specific.
We are currently evaluating Prs 344 in patients with advanced solid tumors, who has cancer progressed on standard of care treatment.
We also recently published preclinical data for this program in the peer reviewed journal clinical cancer research.
As a reminder, we have exclusive commercialization rights for Prs 344 in the United States and we'll receive royalties on ex U S. Sales for this program <unk> is also within the alliance continuing to develop Prs 352, which is an undisclosed anti calin based bi specifics beyond.
For one BD.
I would like to end the Io update with a quick update on our other ongoing Io partnerships are.
Our collaboration with CJ continues to progress and we hope to have additional updates on those programs. Later this year. Additionally, Boston Pharmaceuticals continues the IND, enabling work necessary to progress Prs 342, the GPC 341, BB by specific they licensed last year towards the clinic.
It is rewarding to see the multitude of Peirce sourced forwardly bi specifics that are in or soon have the potential to be a clinical development with a great roster of partners.
This concludes my prepared remarks, and I would now like to hand, the call back over to Tom.
Thank you, Steve and good morning again, everyone.
Cash and cash equivalents totaled a $117 8 million for the year ended December 31, 2021, compared to a cash and cash equivalents balance of $70 4 million for the year ended December 31 2020 the.
The increase since December 2020 was due to cash received from new and existing collaboration agreements, including milestone achievements.
In addition during 2021 the ATM program was utilized to raise a total of $38 5 million in net proceeds at an average price of $4 85 per share.
These increases in cash were partially offset by cash used to fund operations in 2021.
The year end cash position also does not include the impact of the Bavarian government Grant as those proceeds will be reimbursed for qualifying program costs that are incurred during the Prs <unk> to 'twenty development period.
R&D expenses were $66 7 million for the year ended December 31, 2021, compared to $46 5 million for the year ended December 31 2020.
The ramp up of R&D expenses relates to CMC activities required in advance of starting clinical trials for which Steve noted the two Io trials started right around the end of the year and we are planning the initiation appears to 'twenty later this year.
In addition, we incurred higher clinical costs on <unk>, Alfa and higher employee related costs.
These increases were partially offset by lower manually manufacturing costs on PURA, <unk> 60, which are fully reimbursable.
G&A expenses were $16 5 million for the year ended December 31, 2021, compared to $16 7 million for the year ended December 31 2020.
We continue to leverage the capabilities of our G&A functions, such that total G&A spending was consistent year over year.
In 2021, higher fixed and variable compensation and higher insurance costs were offset by lower legal accounting and project management costs.
We also incurred lower office and building equipment costs as there were a number of onetime costs related to the move to the new R&D facility in Halberg, most Germany in the prior year.
For the year ended December 31, 2021, $3 7 million of other income was recorded for peers to 'twenty program costs that qualify for reimbursement under the Bavarian Grant that was announced in June of 2021.
Net loss was $45 7 million or <unk> 71 loss per share for the year ended December 31, 2021, compared to a net loss of $37 2 million or <unk> 68.
Loss per share for the year ended December 31 2020.
With that I will turn the call back over to Steve.
Thank you Tom.
In closing I, just want to say last year was characterized by heavy lifting in execution, it's necessary to set us up for an eventful 2022, we added new partners to our roster, we initiated new clinical trials and we maintained a healthy balance sheet.
There is a clear focus on upcoming catalysts, including the phase Iia data for Prs <unk> later this year and our subsequent subsequent opt in decision.
As well as our syndrome, and Prs 344, Readouts and our Prs to 20 clinical initiation.
I look forward to keeping you updated on those key inflection points as the year progresses. So thank you for joining us today, and we would now like to open the call for your questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before.
Pressing the star Keys, one moment, please while we poll for your questions.
Our first questions come from the line of Jonathan Miller with Evercore. Please proceed with your questions.
Hey, guys. Thanks, so much for taking the question.
Let's start on <unk>. So it's the first time I think I've really heard you suggest that you might not opt in all the way or that may be your body language. There was feeling a little softer assuming the data is still good how are you feeling about the two different levels of opt in here are you still leaning towards a full option or.
What are the drivers of your maybe not going all the way there.
Yes, Thanks, John and I think what we were able to start doing after.
Aligning with Astrazeneca on.
And the detail, which we want to communicate around the Arctic contours, we've now been trying to educate investors on what the baseline value is on the royalty and milestone income should we not choose to opt in at all and then as well as the contours of the two distinct opt in decisions that we could make our unfettered discretion.
And how those could be funded whether through milestone streams or other means such as traditional equity financing. So I think data will be partly responsible for how much enthusiasm there is and how we will fund this but I think it was good to go a little bit deeper and I'll turn it over to Tom to provide a little bit more.
Color on why for example, the first off the level of 25% is particularly attractive and we're certainly not going to rule out the other one but we want to make sure everyone understands the affordability of this at all cases.
Yeah, Hi, John So I think in the.
The different levels right. So just to clarify if we do nothing we will get development milestones.
That are meaningful.
Traditional milestones you would expect for the various.
Phases of clinical development, and then we get our sales milestones and royalties that we would normally get.
For any type of <unk>.
Collaboration is commercialized.
<unk>.
If we moved on to the 25% co development opt in.
Here.
Think that.
This could be an attractive option for us because the development milestones are similar to those if we did nothing from the co development often so we so.
At 25% cost share, we would have sort of a significant offset from the ongoing development milestones.
And here then we have.
Much greater potential upside on the sales milestones and royalties that we would be entitled to if we opt in for 25%.
So we think that's again.
An attractive option and again the meaningfulness of the development milestones makes this something that we think we can.
Really.
A sort of a Florida look forward to in terms of our ongoing development of our planning for this.
The upside we would have a 50% co development share here.
We would by doing that they would be lower development milestones than in the first co development.
Scenario, but.
Outside would be the gross margin share then we would get.
The commercial sales per program, which again would even be a further step up from the.
Sales milestones and royalties that we would get.
I think it goes without saying, obviously that any of our decisions that we take are going to be.
Based upon the data itself and how good does look.
Post the phase Iia results right that that is going to be most meaningful to us.
Thanks, a lot for that Tom and then the other important piece of this component is it's not just the data that we will have and be able to communicate publicly but also our go forward plan and will have a budget. So it won't be like there'll be a black box here it will be very thoughtful and informative and we will be able to have P&A. Accordingly, so we're going to wait and see and.
The good news I think we feel pretty good about op union given how it's structured even at the lower rate and if the data are there in the plant makes lot of sense in the eyes of our investors than the $50 50 would also be a very viable option, we believe as well so stay tuned.
Great Great makes sense. The one other thing that I wanted to touch on is I noticed your commentary on the geopolitical environment, obviously, you've got you've got one site in the Ukraine.
The <unk> study right now.
And obviously, we're all watching that situation very carefully.
Not not just thinking about the fundamental impacts on companies, obviously, but from the perspective of this trial what are the circumstances here that would result in a meaningful impact to the timeline given only one of your sites is is in the Ukraine itself.
Yeah. So we've used Ukraine in Australia for the safety portion of the study the safety portions are little difference difference nuanced over what we would use for the efficacy portion and the Ukraine site had played a fair roll a fairly.
<unk> role for us in the safety study. So we're also enrolling.
The safety portion as we mentioned in the highest dose cohort the 10 milligram cohort in parallel to the two doses in the efficacy cohort so depending on patient access in Ukraine that could be something that would would impact the safety timelines on the third cohort.
But we're not changing anything today, we're just letting investors know that we have used Ukraine and this.
Terrible development notwithstanding it does it does.
<unk>.
Involve our program because we've used them a lot through the safety study. They are involved in the efficacy portion as well as you know, but one of multiple sites. So there is certainly way to navigate around that for the efficacy portions. So this is really just us.
Good corporate housekeeping letting investors know that this is something we're looking at and Astrazeneca is going through a very thoughtful discussions with the <unk> to be able to reconfirm timelines.
If not we will make an updated quarterly course of business as we mentioned.
So no changes today.
Yes. Thanks, so much for that color I think that makes sense and obviously, we're all we're on track in that situation very closely.
I'll hop back in the queue. Thanks.
Thanks, Sean.
Thank you. Our next question is coming from the line of Matt Phipps with William Blair. Please proceed with your questions.
Good morning, guys. Thanks for the update.
Just wanted to clarify that.
Update later this year and hurt too that would be from part a.
How does that kind of a Simon two stage design.
And you know again exceeding the target you guys have laid out you would then.
<unk> progressed, a part b to kind of confirm that or the larger patient population.
Yes, Thanks, Matt essentially Thats right I mean, we really high bars that we think would be meaningful if we achieve them into 20 patients and we think that having the ability to have if we have the ability to achieve and if you hit that bar.
A 40% or are for her too low and 20 patients. We think that that will be regarded as very meaningful both in the eyes of the investment community and in particular in industry and so that and that should open up a number of options for go forward I think one natural progression is of course progressing forward after the 20 patients into broader expansion.
We'll of course look at the totality of the data and consider even partnering options at that stage as well.
Okay, but thats the data readout for the end of the year just to make it clear that's over 80 420 patients all RMR.
Thanks.
You mentioned, yes.
Yes.
<unk> continues to progress and additional updates leading tier.
Yes.
I know you can't say too much but disclosed the targets or do you expect any milestones from from the collaboration with you.
Yeah.
The cultural norm well.
Yes, so Matt so again, where we have to align with our partners since it is a great partner.
But we have to align with them before we can say more color than we would with a proprietary program I can say, what we're really pleased with the progress that <unk> is making with the lead program.
We look forward to providing updates, which we anticipate we could provide it later later this year, there's still a lot of year in front of us.
And the way we've structured the deal I can't remember, let's affirmed was exactly public but you can imagine that there are there are clinical milestones and Tom might be able to share a little bit more color here. There are clinical entry milestones and subsequent development milestones that would one would expect from from this and I think at some point there would be.
Not just the communication of progress, but also probably more color around the program itself, we have to align with C. General all that detail and I don't know if Tom wants to add any more color here.
On the milestone.
Steve you're right.
It would be entitled to milestones as they.
Enter into the clinic and progress through that so those would be things. We would obviously look forward to not only just the development of the program, but some financial benefit from that as well.
Okay, and lastly, kind of following Jon's first question.
You mentioned that you train in Australia was totally for the safety portion of the trial does that mean, there's maybe the real near term risk is kind of built the higher dose.
One b or whatever.
Getting that done or can that deal, but now in Australia.
Okay.
Yes, I mean, thats certainly one one potential implication definitely we could rely on Australia and I think the.
The Australia situation last year was I think it was very different than it is right now around COVID-19 . The country was practically in lockdown across various states for most of last year and that certainly impacted the ability to recruit and Thats, where Ukraine was meaningful but now now that you know that.
Colby evolved and we're kind of getting back to normal in many jurisdictions geographies, we feel that we could more effectively leverage Australia than maybe we had a year ago.
Thanks, Steve.
Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question is coming from the line of Roger song with Jefferies. Please proceed with your questions.
Great. Thank you.
Shannon.
No.
Just curious because of the co development option already include this gross margin sharing.
Can you just comment on that.
Co commercialization options to what will be the additional upside if you will.
Kind of back to the mall.
This 60.
Yes, Thanks Roger.
I'm going to turn this over to Tom just say at the outset. There is not a lot more color. We can provide on the cocoa right now.
Before alignment, especially with Astrazeneca.
On a communication around that but maybe contemplated just a bit more kind.
Kind of color around what that entails versus the co development option.
Yes, Thanks, Steve.
I think when we're looking at this this is obviously something thats going to be.
This is a decision point that we have later.
Clearly once we're into phase III and how we how we want to.
Sort of think about commercialization of this alongside Astrazeneca. So.
Yeah.
Potentially would be funding us for the co commercialization so.
And sort of a nice option to have as we think about.
That should being integrated.
Our biotech perspective, moving into the commercialization and sales aspect.
And being able to develop a sales force, but again I think it's probably very early days in terms of us saying that.
That's something that we're giving a lot of thought I think for right now we want to focus on sort of the execution and looking forward to the.
The co development options that we have and how those can be meaningful for us.
The company.
And I would say it's fair to also mentioned Roger that the economics that we've been talking about it you know as Tom shared around the 25% opt in or the 50% opt in those are fixed as a function of the co development structure itself. The co commercialization is really independent of that that's really what is there to help facilitate us getting a foothold in the commercial.
Vectren Com said for integration and and I think we would like to be able to explore that if we are co developing and we would be able to do that we feel if we wanted to but I think the key here is not to forget as is all of the economics, we mentioned or whether or not we do the co commercialization option or not.
Got it yeah. Thanks for the color alright, and so for the Io program.
We already realized.
Got it recently the next generation targeted.
Therapy, particularly the agencies.
So some kind of exciting news, Florida breast cancer, not necessary gastric cancer, but curious your thoughts around that.
They received from those targeted ADC versus to your phone.
Kind of what's your program.
And Roger are you referring to hurt her two low study.
Recent recent data from Adcs for two months.
Yes, yes.
Yes, yes, yes, it's a good so theres some really.
Data that was announced from the.
<unk> I think that's really great for patients and I think it doesn't change how we're thinking about the placement of a four one BB or immuno oncology.
Agent relative to either classic her to targeted therapies, whether an antibody or a T K.
We're now bringing the toxic payload with next generation Adcs and I think it goes back to the fundamentals.
<unk>.
<unk> fundamentals of <unk>, we've talked about this in the past, but change joining the call and maybe he he is probably the best scripted person to talk about this and Shane can share in a couple of sentences again, why we think that a <unk> agonist could have a major role within the treatment paradigm alongside next.
Generation Adcs, Shane you want to take that one.
Sure Thanks, Steve and Roger Thanks for the question so as Steve pointed out there's fundamental differences and mechanism of action here.
The fact that the her two low environment is being exploited.
By others, not just shows the opportunities there, but in essence from our perspective, nobody has taken advantage of T cell targeted agent in this space.
Sure.
Our preclinical data and data coming out of a phase one study showed us we can elicit a strong immune response based on quite low levels of her two expression on how does that manifest in most manifesting by induction.
Induction of foreign BB Agonism, we believe that will lead to T cell expansion NK cell expansion and it will.
Change the tumor microenvironment in favor of that.
Destroying that tumor.
<unk> perspective, you're going to elicit.
Memory response, you will that will lead to durable durable impact can we see that in the phase one study as well those patients that responded to send the highly durable response, another key asset or assets here is the safety profile. So we have a very acceptable safety profile with syndrome.
And that allows us to work as either a monotherapy or combined with other agents and if you think about <unk>, it's going to be pretty difficult to combine them with other agents. So we look forward to our phase II data coming out of both.
Both of her too high or too low I'm, asking very different biological questions, but it will give us a very strong position in terms of as we go forward time and both of her too low or too high space.
Okay, great. Thanks.
Thanks for thanks for the color.
Thank you there are no further questions at this time I would like to turn the call back over to Steve Yoder for any closing comments.
Alright. Thank you no other comments other than to thank everyone again for your attention and for your continued support of Paris and want to wish everyone. A great day. Thank you.
Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time and enjoy the rest of your day.
Yes.