Q4 2021 Athenex Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the fourth quarter 2021 Athene extra earnings conference call. At this time all participants are in a listen only mode. A brief 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 conference over to Kylie Dougherty Director of Investor Relations you may begin.
Good afternoon, and thank you for joining our conference call today, we will provide an update on our Phoenix. It does not as long as are of your financial results for the fourth quarter and full year 2021.
A news release detailing the results crossed the wire earlier today and is available on the company's website.
A replay of this call will also be archived on the company website.
During the conference call the company will make projections or forward looking statements regarding future events, including statements about financial business and clinical milestones anticipated in fiscal year 2022 and beyond.
We encourage you to review the company's past and future filings with the SEC, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward looking statement.
You can find our SEC filings in the Edgar database at Www Dot FCC dot Gov or in the Investor Relations section of our website at Www Dot Dot com.
Today, we are joined by Dr. Johnson Lau, Chief Executive Officer, Dr. Dan <unk>, President of our Phoenix cell therapy.
Dr. Curt Gunter Chief Medical officer of cell therapy.
Sure, Jeff Jordan, Chief operating Officer, and Mr. Giovannoni, Chief Financial Officer, the management team will be available to answer questions. After the prepared remarks.
Now I'll turn the call over to Johnson for introductory comments.
Thank you Katie.
And thank you everyone joining our conference call. This afternoon.
I'm excited to walk you through the implications of the announcement we made this morning.
Regarding the strategic pivot of the company and several financial initiatives, we have already begun implementing.
We make this decision to focus on our cell therapy platform.
Because we believe it's the best in class potential and therefore, the Serbs she'll be the highest priority for our experienced leadership team.
We are also working on our strength and balance sheet.
Why should catch one way to allow us to meet our objectives to increase shareholder value and bring innovative treatments to cancer patients.
I want to highlight the three key elements of this plan.
Sure.
Refocusing, our therapeutic development efforts on our cell therapy programs.
Second we will discontinue most of all all the initiatives around always Cup right.
Third we are strengthening our balance sheet by monetizing non core assets.
We also implementing significant cost saving programs to lead the company to focus on cell therapy.
Our management team and board conducted an extensive review of our operations and pipeline.
It is clear to US 50, best opportunity to create significant long term value is by focusing on cell therapy.
We see our cell therapy technology, it's differentiated and believe he has the potential to be highly competitive and potentially disruptive to the current cell therapy landscape.
Specifically, we think it can address some of the challenges facing the existing cockpit treatments.
The early clinical data from all candidates have been very promising.
Taco stand Lang and Kurt <unk> will.
We will provide more details in a few minutes on our strategic plan to build upon our strong.
Foundation, those cell therapy programs to create a leading franchise.
B all scruffy programs stuff is the main focus of 18, its clinical development efforts up until 2021 .
We announced previously that we would not be the swing.
Cancer indication in the U S. After receiving a complete response letter from U S. F D. A.
We're now taking you through the steps that have decided to discontinue all of the oral programs in combination with it in the second half.
The only two ongoing oral paclitaxel trials that could potentially unlock value. It will both can continue.
It is mainly due to limited investment required by your Phoenix.
He puts a piece is the I spy two trial.
Which had been expected in the second half of 'twenty to 'twenty two.
We called out the quantum leap.
Health care collaboration has been using our trucks into August so the arms in combination with the map.
Minus global proxy in breast cancer patients in the new adjuvant setting.
This is a randomized phase II trial.
Into phase III and beyond if results are encouraging and it's an area of value it could be unlocked.
This program, we quite minimum.
We saw Cisco might be next but we hope that you stay till we get.
With additional value for our shareholders.
We are also pleased to announce that we have initiate the expansion portion of the phase one two clinical trial of oral paclitaxel in combination with herbalism it in patients with non small cell lung cancer.
This comes after reporting highly encouraging data of all partial responders enforced stable diseases.
You've got to have patients at festival last fall.
We will continue to monitor the progress of both of these studies and we'll look for opportunities to extract further value from this asset with potential partnerships or other means.
And so remind us the UK medicines and healthcare products regulatory agency validated our market authorization application for oral paclitaxel for the treatment of advanced breast cancer.
And we look forward to updating you all the regulatory process in the coming months.
Moving onto our balance sheet.
Last quarter, we said that we would.
So various initiatives to unlock long term value.
And we have so far raised a total of $40 million in the first quarter.
These proceeds will be used towards debt paydown.
It's providing operating cash to support our R&D programs and cell therapy.
We recently completed the sale of our manufacturing facility in Dunkirk, New York two immediate ball on February 14th.
We are pleased with how quickly we were able to close this transaction.
Having entered discussion with EMA about late in 'twenty, one and announced the agreement in early January this year.
Mr. Jeff Yoga will provide more details on the implications of this sale in a few minutes.
There are several components of our business I can relate it to cell therapy, we had no consider non coal.
We are in the process of carrying out actions to unlock value from these assets.
We deal with Dunkirk.
We look forward to updating you on those activities in the coming months.
A critical component in the organizational changes within the Phoenix, it's been aggressive cost saving program.
We've been unfortunately, a reduction in head count.
We have also identified additional means of putting closest.
Implementation of this plan is expected to reduce operating expenses by over 50%.
Altogether with divesting non core assets and cost reduction programs.
We plan to extend cash runway to beyond 18 months.
We believe the combination of initiatives have always liked it has the potential to unlock value for all shareholders.
Finally, Mr Joe and Tony.
What's recently appointed a new CFO is joining us on the call today.
Joe brings over 20 years of experience.
Thank you for wisely investment banking and private equity.
He has expertise in developing and implementing strategic changes within complex environments.
We excuse me invaluable to us as we prioritize our programs.
I'll now turn the call over to talk to them than it is.
Our cell therapy programs.
Thank you Johnson.
We refine our mission that.
We will remain a science.
Company focus on.
Okay.
Innovative treatments for cancer patients.
We believe cell therapy is a particle technology with the potential to change cancer into a treatable disease, particularly in hematologic malignancies.
We are excited to focus our R&D efforts on 8-K T cell based technology that we believe has shown the potential to address unmet.
Medical need faced by a health care systems.
Patients and patients with a CRO.
The market of car T therapies.
We aspire to solve some of the existing bottlenecks.
Patients and bring them value different constituents in the healthcare ecosystem.
There are three current challenges that the current car T treatments.
Access costs.
And clinical outcome.
Given the unique features of our technology.
So at least we can meet each of these challenges.
First due to the difficult and specialized handling both patient specific autologous.
Current car T therapies are primarily reserved for transplant centers.
The community hospitals are in large part not set up to use these technologies.
This is the reason why it's estimated that only 25% of it.
Eligible patients are currently treated with car T therapies.
By providing an allogeneic off the shelf products that can be given in an outpatient setting.
We expect to broaden access to cell therapy by penetrating the community hospital that would work with our <unk> solutions.
By driving deeper adoption of our therapy, we can ultimately benefit more patients in dose addressed my term marketed car Ts.
Second current car T therapies cost.
Between 300, thousands of $400000 per dose.
More importantly, we're getting the feedback what it costs.
Hospitals, even more to take care of these patients because of the prolonged in ICU and hospital stays.
Well I'm highly regarded thought leader recently commented to us that it's been.
This model simply does not work for the health care system.
In contrast, we hope to language ability to manufacture several hundred doses from a healthy donor to create economies of scale that reduce costs within the health care system and pull players.
With an outpatient base and well tolerated treatments, we strive to lower that.
Oregon, and the cost of taking care of these patients.
Lastly.
Despite the promising clinical performance from current car T therapies.
There's still a lot of room for improved efficacy.
Up to 60% of relapsed refractory lymphoma patients don't derive long term durable response from car T treatment.
As described by dumping milk pool, and all came out in December .
In addition, 30% to 40% of patients experienced a dragged it down kind of the lead syndrome complications.
With 80% response rates seen at the lowest doses with our CD 19 car NK T therapy we.
Believes there are levers, we can pull such as higher doses and repeat dosing that can drive deeper and more durable responses for a larger percent of patients.
Our site is not qualified it's well tolerated with a crs rate that is much lower than the current car T therapies.
In summary, we believe our NK T cell based treatments could solve some of the problems faced by clinicians and patients using the current frustration car T treatments.
That's the field of cell therapy continues to evolve we are focused on collaborating with all stakeholders, including patients filter.
<unk> health care systems, and payers to extend and improve the quality of life for cancer patients.
Now, let me turn it over to Kirk to provide an update on our clinical programs.
Thank you Dan Good day, My name is Kirk Gunter and I am the Chief Medical officer for cell therapy at the Phoenix.
I have extensive experience in the field of cell therapy.
He was previously CMO at cure Therapeutics I joined the Phoenix at the time of our acquisition of cure and I'm pleased with the progress of our car NK T cell programs.
Since the acquisition.
I want to highlight some of the unique characteristics of any K T cells, which we believe combine the best features of NK and T cells.
Importantly type one NK T cells, which we work with.
Have a unique and variant T cell receptor or TCR.
Because of this invariant T. C are there is virtually no risk of graft versus host disease compared to allogeneic T cells.
Car NK T cells have strong side of lytic activity and can't kill tumor cells directly and indirectly.
T cells are known to have good memory and persistence characteristics not shared by NK cells.
K T cells home to tissues, and tumors and we have data demonstrating that car NK T cells are superior to car T cells in tumor humming.
For these reasons. We believe this is the ideal cell type to treat solid tumors and our early data supports a promise that car NK T cell holds in the treatment of cancers.
I'm extremely pleased to report continued progress in advancing our key cell therapy platform over the past quarter.
Data from our phase one anchor trial. Okay. You are five zero to our allogeneic CD 19, directed car NK T cell candidate were reported at Ash in December .
We saw strong efficacy and an excellent tolerability in a population of heavily pretreated relapsed refractory leukemia and lymphoma patients.
Specifically out of five Evaluable patients there were three complete responses and one partial response for an overall response rate of 80% and a complete response rate of 60%.
Notably two of the responders had failed prior atoll autologous car T and we are seeing results at very low dose levels.
In this trial, we also observed that car NK T cells home to sites of disease and expand in the peripheral blood.
These results are extremely encouraging and suggest a promising platform for off the shelf immunotherapy.
Further enrollment in the anchor trial continues and we are working to enroll additional patients at higher dose levels.
As we look to the remainder of 2022, we are excited about several important events and presentations our I N D application expanding the anchor study to up to 12 clinical sites was recently allowed to proceed by the F D. A.
This should markedly accelerate enrollment from that achieved with the current single center.
Additional data from this program are expected to be reported at Ash in December .
Clothing updates from patients at dose level, two and three as we look to establish the recommended phase two dose.
We will also present more data from a responder analysis of K U R 501, or a toll I guess G. D. Two car NK T cell program in pediatric neuroblastoma at the a S. G C T conference in May.
We plan to present preclinical data from our allogeneic G. P. C. Three car NK T cell program in liver cancer at the Astro Conference in June and file an IND for this program in the first half of 2023.
Finally for our earliest stage program of Allogeneic NK T cells expressing T cell receptors for solid tumors, we expect to have clinical candidates defined by the second half of 2022.
I will now turn the call over to Jeff Jordan.
Thank you Kurt.
As Johnson mentioned earlier, we recently completed the sale of our manufacturing facility in Dunkirk to immunity by over $40 million.
As part of this sale, we entered into an exclusive contract with immunity Biogen manufacturer or five O. Three D products at this facility and the eight new pods, we develop there.
The advantage of this arrangement.
In addition to the cash generated from the sale.
Is that we can now reduce our overhead significantly and still increase our capacity for phone with a very low cost of goods, which should have a positive impact on the margins of this business.
This sale represents part of the new strategy of the company unlocking value as we pivot, which you can expect to continue throughout the year.
Moving to our E. P S. An apd specialty pharma business sales for the fourth quarter and full year 2021 were $23 5 million and $92 3 million respectively.
Paired with 21 8 million and.
$105 3 million for the fourth quarter and full year.
2020.
There were several factors that influence performance in 2021.
The 2020 revenues included approximately 21 million and non reoccurring international sales due to COVID-19 .
Representing a baseline figure for 2020 of $84 3 million.
Adjusting for these onetime sales in 2020.
Revenue for 2021 grew by 8 million to $92 3 million.
Most of the issues relating to the Covid pandemic, including the manufacturing slowdowns in China and India.
Inability to secure shipping options to bring inventory into the U S.
Shortage of the central materials and challenge is to purchase and receive the central Apis for our products.
We have largely been resolved.
And we are in a much better position to grow the business in 2022.
We launched two products in the fourth quarter.
And we have an additional 10 planned for 2022.
Two of the planned new introductions are very significant products and these will be launch at market formation.
Right at the time of patent expiry.
The revenues in these two products will increase revenues and margins of the overall business significantly.
Products already have tentative approvals.
Which means we will be able to launch them when the patent expires.
We previously announced a delay in securing state licenses for the Dunkirk facility.
We are currently collaborating with immunity bio to secure licensing in New York.
In order to begin operations there.
And then with the seven largest states.
We do business with.
It will likely be late 2022.
Or early 2023 before this process is complete.
But once the licenses are in place this sets us up for significant further growth in 2023 and beyond.
Our Phoenix Pharmaceutical Division currently markets 29 products.
With 54 Skus.
And the Phoenix pharma solution markets five products.
And 16 Skus.
Overall, we are very excited by the potential of this business to generate significant value.
The revenues at a P. S. In a P. D are robust and we are selling every unit, we can manufacture at substantial margins.
See the consolidated business returning to growth in 2022.
And are now forecasting that revenues will increase by between 15 and 20%.
Further product launches by Aps.
And the receipt of licenses to ship fibre III V products are expected to result in substantial growth further in 2023.
I will now turn the call over to Joe and melody.
Discuss the financials.
Thank you Jeff good afternoon, everyone.
I'm honored to have joined this team of innovative leaders in the world of cancer Research and development.
Nick says mission to improve the lives of cancer patients resonated with me personally.
I'm sure it does with many of you listening.
I came on board to apply my transactional and operational experience to drive strategic financial changes so that the Phoenix will be in a better position to deliver on that goal.
Our announcements today, Mark an important time to change the time to break down and a time to build back up our foundational strengths as we focus on the future of our cell therapy programs.
In order to do that we see two significant opportunities to strengthen our balance sheet.
First the monetization of noncore assets and second cost reduction.
As you heard today, we have already begun addressing both.
The asset monetization stops we have implemented so far include the sale of our Dunkirk facility, which generated $40 million along with significant overhead cost savings.
<unk> identified other noncore assets in the business that could search on unlock additional value and we'll provide updates on these programs as we continue to execute on our strategy.
Our cost reduction initiatives are related to the streamlining of the company structure to refocus it around cell therapy.
The sale of Dunkirk alone reduced our head count immediately by 70 people and we eliminated the associated operating and capital expenses.
Our plan also includes the winding down of noncore operations and manufacturing small molecule R&D and supporting infrastructure.
Small molecule clinical study expenses are being reduced by over 90% as we now only have two ongoing studies.
Additional cost reduction initiatives should allow us to reduce total operating expenses by over 50% and by transitioning to a pure play biotech model, we can minimize future capital expenses.
The process of strengthening our balance sheet is underway and the team is committed to taking necessary steps to ensure a strong financial foundation for the future of about Phoenix.
Combining the activities that we have executed on as well as planned actions and the divestiture of noncore assets and cost reductions, we expect to extend our cash runway for 18 months and beyond.
In summary, we aim to succeed and realizing the full potential of our cell therapy platform, while transitioning to a focused business model that has an appropriately sized infrastructure.
Now turning briefly to the fourth quarter and full year 2021.
I'd ask that you. Please refer to our press release that was issued earlier today for a full summary of our financial results, but I will highlight the following.
Total revenues for the fourth quarter, and full year, 'twenty, 'twenty, one or $24 $9 million and $122 million, respectively, compared to $21 $8 billion and $144 $4 million, respectively for the same periods in 2020.
R&D expenses totaled $18 $3 million for the fourth quarter in line with the prior year period.
R&D expenses totaled $82 million for the full year 2021 an increase of 6% year over year.
SG&A expenses totaled $12 $9 million and $72 $1 billion for the fourth quarter and full year 2021, respectively.
This represents a year over year decrease of 59 and 26% respectively.
Net losses attributable to our Phoenix for the fourth quarter and full year, 2021 for $104.4 million and $199 $8 million, respectively, or losses of 95 cents and $1.92 per diluted share respectively.
The fourth quarter and full year results include noncash goodwill impairment of $67.7 million.
As of December 31, 2021 we had long term debt of $153 million under our senior credit agreement with Oaktree answer guard, which we have begun to pay down with the proceeds from our asset monetization activities.
As of December 31, 'twenty, 'twenty, one and Phoenix had cash cash equivalents and restricted cash of $51 $7 million and short term investments of $10.2 million.
Finally, as Jeff mentioned, the specialty pharma business is expected to return to growth this year.
The visibility we have on demand and on new launches, we are issuing product sales guidance for the fiscal year, 'twenty 'twenty, 215% to 20% growth over the prior year.
I will now turn the call back to Johnson.
Thank you Joe.
We have outlined in our strategic plan and emphasize that our priorities for year to date.
As you can see we have already taken steps to pivot a phoenix towards our new future in therapy.
This is just the beginning.
We are intensely focused on advancing this promising pipeline.
And all actions will ensure we simplified the company will reflect our focus and position us for success.
I wanted to take a moment to thank all of our colleagues who work in the sleep on the ice coffee programs and other parts of the business we are no longer supporting.
I'm grateful for his dedication and contribution the team has made over the past several years.
We will Miss all individual team members, who will be departing.
And wish them luck on their future endeavors.
We will now open the call for questions.
Operator.
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.
Information Tonawanda Kate that 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, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Thank you. Our first question is from Jonathan Miller with Evercore ISI. Please proceed with your question.
Hey, guys. Thanks, so much for taking my question and very exciting to hear about the pivot here and are all of your plants are cashway cash runway extension I just want to be Super clear about the plans for oral paclitaxel at this point, though if you get a positive approval and the positive opinion in the U K will you.
We intend to commercialize there and if I spy two looks good in the second half will you pursue a registrational path there so.
So at this point what role does oral Paclitaxel play as part of your monetization of noncore assets and then you know while we're on that topic.
Whenever you have a more concrete sense of cash runway and the what's your expected cadence I guess of the monetization of unwinding of the noncore or legacy businesses.
Thank you for your question Jonathan suddenly I mean are there somewhere there's still value in the roast coffee program, particularly the oral paclitaxel and right now we have to understand we understand the challenges that we're facing with the resources that we have cell therapy is definitely deep hierarchy right now given the exciting data with <unk>.
Generated and the potential return for the investors. It was a tough decision, but anyway. If the data to know if you pass it with I spy, two oh, well with a possible development with the UK Omics shot off the C. We intend to continue extracting the value from this program and it will.
Be able to update with regard to our plan in case, something very positive, which we're hoping for U K or if we have very positive data from the I spy two I spy two program certainly when positive things develop we have demonstrated that we know how to react and there could be strategic actions that we could take.
In order to realize the value.
Fortis asset for our shareholders.
Jonathan.
Yeah. Thank you and on the concrete sense of cash runway or cadence of monetization question.
On that question I would like to emphasize that we when we were trying to build for success. We built the vertical integration with regard to I think supply chain and then because of that we then also was able to realize some value based on the specialty pharma business, but now that we're focusing on cell therapy.
The non coal ease some of the components become noncore assets and Fortunately the good part is that somebody's phone call S. S. They do have a lot of value. We already indicated that we had the process of monetizing them and we have done a lot of work on that and so we hope that will continue providing updates.
Once this process Oh I'll go in completion and hopefully in the next few months.
And with that we believe that that will be able to extend the cash runway to 18 months or longer.
Okay excellent. Thank you very much.
Thank you Jonathan.
Yeah.
Okay.
Thank you. Our next question comes from Kevin <unk> with Oppenheimer. Please proceed with your question.
Hey, I appreciate the update with regard to the data to be presented at a S. D. C T.
Should we think about number of patients and in kind of a maturity of that that update and maybe on a related point with regard to the <unk> presentation, you know any sense that I think about expectations there as well.
Correct.
Okay. Thank you for your question there so at a S. G C T will be updating data from the <unk> two study.
We're not providing any guidance yet on patient accrual, but we have accrued more patients I can tell you that from the last presentation at a S. G. C. T and we're also following durations of response in the patients with previously presented.
At <unk>, we will be presenting preclinical data from our <unk> 503 program.
Which is targeting.
G P C three and hepatocytes carcinoma.
Great and then maybe just a housekeeping question for me you know Johnson from your last response, the I wouldn't interpret the 18 month cash runway to include.
Proceeds from for monetization if for some reason you were not successful in future modernization, how should we think about cash runway.
I think we are working on different sources of our revenues and also avenues and we are having different approaches to ensure that we will be able to sustain to that cone and certainly we have been conducting a lot of activities in relation to the monetization.
Just to say I mean, our you shows approaches that we will only announce it when it's due to completion, but we emphasized that we would like to emphasize that we have been working on this for quite a while already and we are hoping to update you in the next few months and they are the source of approaches we can take but certainly I mean, we are going to use whatever approach.
Should we can to ensure that we are couldn't you be able to have resources up to 18 months or longer.
Great. Thanks for taking our questions.
Uh huh.
Our Mississippi.
Thank you. Our next question is from Kennan Mackay with RBC capital markets. Please proceed with your question.
Hi, I have two questions first I was wondering if you could just comment on the potential to further monetize turbine.
And the numbers are.
The number of territories more territory.
Hadn't yet been partnered out or licensed out there and then beyond that on the specialty pharma business. I was wondering if you could expand a little bit on the margin.
<unk> previously that had obviously been manufacturing a rock solid as a critical supply and had been a non profitable as a result of that but now without that capacity in and and cost.
I would just like some further clarity on what those operating margins could be thank you.
I think it's gonna have I'll answer the first question I'll, let Mr. Jeff <unk> to answer your second question on specialty pharma margin with regard to a type of discipline, we collaborate with our partner Emerald for both the U S and Europe and we also have partners in China in Taiwan, Japan Korea.
And also Australia and Canada. So therefore, the territories that we are working on right now is that Latin America, but having said that I think the pickup of tepid nibbling has been going according to plan.
And therefore, there will be a source of upside potential with a cut at that and also that particular royalty stream will be off. So we've obviously will be off value and since we are going to support the company. We're looking for different ways and various different approaches in terms of monetizing it to ensure that we all will be April .
<unk> to create a source of.
Resources for the company to go forward and to move T cell therapy program I Hope I answered your first question.
Yeah.
Yeah.
And if so did Jeff do you want to answer the second question.
Yes, Johnson can everybody hear me.
Yes.
Alright, Ken.
Kevin Thanks for the question.
Uh huh.
We're going to be we're going to be intra.
Introducing 10, new products in 2022, the specialty pharma business and several of the products will be at market formation, which is the first time, we've been in a position to do that so the margins will be much better we anticipate the merchants can be in the area of about 25%.
For the specialty pharma business this year and.
We also anticipate a positive EBITDA.
Yes.
Okay. Our next question comes from Jonathan Chang with SBB Leerink. Please proceed with your question.
Yeah.
Hi, guys. This is first of all on for Jonathan just had a question on the NK T cell therapy platform wanted to ask if you had any thoughts on the recent FDA guidance regarding cell therapy clinical trials and how this might apply to your strategy for the NK T cell therapy platform.
Dan.
Okay.
I would direct that question to Kurt.
Sure.
Okay.
Yeah.
So if you are referring to the car T cell guidance that came out from F. D. A today I Havent had a chance to study it thoroughly however, I will say I think we are a pretty up to date with regard to how to design a car NK T.
Hal studies since we just submitted and I N. D. Recently that was allowed to proceed by the F D. A.
And if you give me a few more hours I'll definitely read that thoroughly and be able to just in a position to discuss it with you.
In more depth.
Great sounds good. Thank you and then talking just ask one more question on NK T cell therapies. Just curious if you guys could provide some color on your kind of perceived or anticipated differentiation versus other companies out there doing NK T based therapy.
And Dan.
Sure. Thank you for the question. So I believe we're the leader for developing NK T cells, we have two clinical trials.
Ongoing right now as you know one in neuroblastoma, Judy to car T and one in relapsed refractory <unk>.
While leukemia for CD 19 car T. Other NK T companies as far as I know they are not in the clinic, yet and the one that is in the clinic I think they are pursuing a modified NK T cells. My understanding is that they're just taking anchor T cells from <unk>.
Donors without doing any genetic modification like putting in the car or putting the IL 15.
We did two.
These cells more potent and persist longer they're just are infusing car modified T cells to I believe a multiple myeloma patients. So in that regard I think we are probably a year to two years I had the competition with regards to <unk> and K T cell therapy in cancer treatment.
Yeah.
Got it thanks for taking the time I also wanted to emphasize that our S E T.
As mentioned in our press release that we also have we got the industry sponsor IMT 40, COO FIFO true a lot already and this will allow us to expand to more scientists and in a way a salary the recruitment rate to capture the full value of our allogeneic approach.
<unk> for the B cell.
Malignancies, including lymphoma.
In a more expedited fashion. So default you highlight with regards to our commitment.
Our ability to work with FDA to resolve a subdued due to our Mysore program beta cell therapy have looked.
That is why do some more.
Data points for your consideration in your evaluation.
Yeah.
Perfect. Thank you so much.
Yeah.
Yeah.
Thank you. Our next question comes from Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.
Hi, Yeah. Thanks for taking the questions Johnson I just wanted to follow up on that a little bit more in terms of care of five O. Two how should we think about the roll out of those 12 additional sites this year and and and generating additional data throughout 2022 and and.
What are your expectations in terms of increasing patient enrollment attacks and the anchors that hey, Thank you yeah. Thank you Dan you want to answer the question.
Sure. So we're very pleased that we were able to find an idea was recently allowed by the FDA to expand our current single Center study from Baylor to a multi center studies.
As Curt mentioned in his prepared remarks were looking to stand up drop sites.
We're actually kicking off those active right now.
And we're hoping to have more patients.
We'll replicate theyre very early promising data that we.
Presented at last year's Ash.
Yeah Medical conference currently we're not projecting a good not giving any guidance on the number of patients, but we are hoping that by you know by the time that we exit the year, we'll have a pretty good idea what the recommended phase two dose should be from a dose escalation study.
Okay very good and then and then kind of follow up on the on the anchor at the a S. T C T a.
And next month.
Should we expect to see additional patient data a person's ash of last year.
Okay.
Okay.
Yeah, so that'd be a S. T T. Meaning we are going to have just a little bit more incremental data on a couple of patients.
And then we also have a more mature data for those patients that had the ongoing complete response or a P. Ours, so theres a little bit of incremental information on the durability of responses as well as the incremental data on a couple of more patients, but the the really the big data update will be.
And this year at Ash Applebee's standout, but you know all these sites to enroll more patients in the ankle been called the anchor to study and there's a multicenter study.
Okay, Great Great and then last question you you've already spoke about spoken about the asset monetization plans can you give us a little bit more color on the cost reduction programs you you've put in place in and actually as you.
Shift your focus to the cell therapy platform.
Help us understand in terms of your your SG&A and R&D with what where you think you can get to.
First of all there'd be a gang, saying that we have on the noncore asset we're not giving any guidance, we just emphasizing.
Emphasizing that a we understand that this is that we want to emphasize this is the path that we are taking after our due diligence to do evaluation with regard to you what's the best possible, what Oh I want to emphasize again that we're not actually giving any guidance, but rather we would like to emphasize that Odessa in action and then we will do.
<unk> be able to announce it.
A time when our OTC, but these are some of these activities are completed at the appropriate time now with regard to cost reduction as a CFO . This is Joe and Tony has indicated that a lot of the activities related to other aspects of our discovery are already being discontinued and then we have also reduced the oral.
Paclitaxel activity used to only two of the existing studies that will require minimal.
The investment and then correspondingly the SG&A also comes down the current projection is that it will be more than 50% reduction off of the entire operating expenses in the next couple of months right now.
Okay. Thank you Johnson.
Thank you yeah. Thank you Matt.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Our next question comes from Yale Jen with Laidlaw <unk> Company. Please proceed with your question.
Good afternoon, and thanks for taking the questions.
Just wanted to clear that in terms of you talking about cash runway are you.
You have about 61 million cash by the end of last year and when you talk about the wrong way to you, including the also includes a $40 million a photo that Dunkirk Oh.
The proceeds from from that as well.
Yeah.
Hi, Joe.
Yeah.
Can you hear me.
Yes.
Can you hear me okay.
Yes.
Okay.
Hey, Thanks, My phone is acting up there, but yeah, the $61 million that you're referring to that was as of December 31st said that does not include the proceeds from Dunkirk, which occurred in January .
We have not provided our updated numbers as far as the cash balance but yeah.
You can infer from that from those two data points.
Okay, Great. That's very helpful and the second question here is that.
In terms of TCR T.
Does it consider us a non call are still hard at this.
Cell therapy, potentially you could be pursuing going forward.
Dan do you want to address this question do you want me to just address this question.
I'm happy to take it so yeah. So that's you know the TCR T. As they are T cell receptors that are.
Targets, the antigen NY ESO and its an autologous T cell approach currently we have a phase one program.
That is ongoing at Baylor.
In Dallas.
And this is targeting a those are solid tumors, including lung cancer breast cancer head and neck cancer T N B C and I believe bladder cancer they have high debt.
They are high expressing NY ESO, we are hoping to get some safety and efficacy signal from the study longer term, it's our belief that in order to drive long term durable response in solid tumors and a more appropriate approach.
It would be an allogeneic approach.
Because based on our understanding of the science in our literature and other companies.
Companies experience.
We don't believe a one shot autologous approaches is gonna be efficacious enough to treat solid tumor.
So long term, if we're seeing a pretty interesting signal from our NY ESO TCR, there's a possibility that we could put that TCR onto the NK T cell platform. So we can provide a <unk> allogeneic approach that we can get repeat dosing.
So that's sort of a long term plan, but it's I hope that's helpful to you yeah.
Yes, absolutely and maybe they're not squeezing one more question here, which is that just a housekeeping question. That's based on the fourth quarter operating expenses, both R&D and SG&A.
We consider that could be the new basis.
The expand operating expenses of $20 22 in.
In general.
You should consider that much lower because when youre trying to wind down certain operations, including.
The marketing.
Really all gone already and also that we are eliminating some of the clinical operational team related to <unk> or paclitaxel.
You should expect that the operating expenses should go so does go down drastically including SG&A. So so therefore your assumption should be based on the number and based on the record number and it should take around two.
Super saying at least 50% reduction vis I'll check it right now.
Yeah.
Okay, great. Thanks, a lot and best of luck for things move forward.
Thank you for your question Yeah.
Thank you there are no further questions at this time I'd like to turn the floor back over to Johnson Lau for any closing comments.
Oh. Thank you very much we are pleased to provide you with this update today.
Begin a new chapter at Phoenix.
We believe that our cell therapy programs should be the main driver for future growth and position us to be a leader in this space.
The encouraging clinical data in.
In strong support of the great potential of our cell therapy program.
Our decision to monetize non core assets improve our balance sheet and kept operating expenses result in a leaner structure that will meet our long term corporate objectives and create sustainable long term value.
The combination of these initiatives set us up for value creation for shareholders.
Will help us execute on our mission to bring innovative treatments to cancer patients.
Thank you for everyone for joining us today.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Okay.