Q4 2021 DiaMedica Therapeutics Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the idea of mini Cups tier reputed fourth quarter 2021 conference call.
An audio recording of the webcast would be available shortly after the call today on do you have medical's website at Triple double you the idea of medical Dot com in the Investor Relations section.
Before the company prestige with its remarks. Please note that the company will be making forward looking statements on today's call.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements.
More information, including factors that could cause actual results to differ from projected results appears into fiction and tackle cautionary statement note regarding forward looking statements in the company's press release issued yesterday and under the heading risk factors and the many customer reasons.
Annual report on Form 10-K .
Yeah, Mehdi cause S. E. T filings are available at tripled the bogey that S E T dot Gov and on its website.
Please also note that any comments made on today's call speak only as of today March 15th 2022, and May no longer be accurate at the time of any replay or transcript rereading.
<unk> disclaims any duty to update its forward looking statements.
Following the prepared remarks, she will go to open the phone lines for questions I would now like to introduce your host for todays call Rick Pauls, Yeah, Medical's, President and Chief Executive Officer, Mr. Paul You may begin.
Thank you Julia and good morning, everyone and welcome to our year end 2020 , one business update and earnings call yesterday. After the market closed we issued a press release summarizing our fourth quarter 2021 financial results and providing a general update at that time. We also filed our quarterly report on Form 10-Q .
Both documents can be found in the Investor Relations section of our website at <unk> Dot com.
I'm joined this morning by our Chief Financial Officer, Scott Kellen, Our Chief Medical Officer Kitchen, Chris Our Chief Commercial Officer Domenic.
And our senior VP of clinical operations Harry Alcorn.
To begin today with introducing you to our two newest members of our executive team Houston is a board certified neurologist experienced in both clinical medicine and drug development. She practiced and taught at the University of Michigan and the State University of New York and Syracuse. She began her work in drug development with Pfizer and his experience working with large and small.
All of our organizations, including heading one of the neurological divisions at Roche and brings direct experience moving multiple compounds to the clinical and regulatory process in both the U S and Europe .
I'm Gonna Cundari has over 30 years of commercial experience with genentech, including managing the growth of the activation or Tpa franchise as it became the first approved therapeutics for treating acute ischemic stroke.
I'm also provided the commercial leadership for Lucentis. The blockbuster macular degeneration treatments were extremely grateful to have both of these individuals join our team and we thought that you may want to hear from them.
From these two and get their perspective, and what attracted them to joining our team so let's start with Dr. Chris.
Okay.
Thanks, Rick.
So there were three main factors that attracted me to the company.
First the repeat findings from numerous randomized controlled trials.
Greg in the peer reviewed medical literature from Asia consistently demonstrating clinical improvement in acute ischemic stroke patients receiving the human area. The human urinary derived form of Kayla K one.
Second the mechanism of action of key Okay. One.
The selectively visa dilate arteries. This this may improve collateral blood flow to the area of the brain with ischemia.
Resulting in an improved recovery from stroke.
In addition, this improved collateral blood flow may also reduce the potential for stroke recurrence from a reocclusion of a blood vessel.
Third that the company took the time to match the PK profile of D. M 199, the recombinant form of K L. K one to the year in every form of K O. K. One that has previously demonstrated in repeat trials clinical improvement.
This would optimize the dosing regimen of being 199 in stroke clinical trials. So taken together. These three factors are what drew me to the company.
As they increase their probability of success of a clinical trial of recombinant D. M 199 in acute ischemic stroke.
Okay.
Great. Thank you garrison, we're very excited to have you join our team now lets hear from Dominic.
Yes, I think Greg when I researched die and Medica N. D. M 199, My first impression was that the D. M. 199 is not incremental it's not an incremental therapeutic modality, but a treatment that can significantly advanced stroke care for a large number.
<unk> of ischemic stroke patients.
Over the past couple of decades, my focus in acute ischemic stroke has been working with hospital neurologists and on the front end with a zero to 4.5 hour treatment window for Tpa.
Unfortunately, only about a third of the acute ischemic stroke patients get to the hospital within this narrow treatment window and of those only about half are eligible for tpa. So the net net result is that only about 8% of all admitted stroke patients get T. P. A.
Typically a stroke patient will have a hospital stay of five or six days a.
With physician monitoring and perhaps an additional look at C T or MRI and that may be an anti coagulate or an anti platelet is added to the treatment regimen.
Now looking ahead based on our phase two data D. M 199 can potentially reduce disability and reduce the likelihood of recurrent strokes.
And with an expanded treatment window from zero to 24 hours.
Annually over 500000 acute ischemic stroke patients can fall within the treatment window. So there.
There is a significant opportunity to advance stroke care for a large number of patients starting the recovery.
Phase of stroke, I might add that the mode of action for D. M 199, as well explained and understood.
Secondly, there are numerous clinical trials with human sourced okay I'll kick one.
Demonstrating safety and improve stroke recovery in terms of reducing disability in reducing stroke recurrence.
I might add that.
A recombinant form of the D. M 199 will assure purity of the product and abundant supply and last I believe that the M 199 will be well received by the neurology customer base. Thanks, Rick.
Thank you Tom we're equally excited to have you joining our team and ultimately we feel the real winners here are going to be the patients.
Now I'd like to provide an update on our lead program, our phase II <unk> III remedy to trial.
<unk> nine in the treatment of acute ischemic stroke referred to is a is the design of the remedy to has some interesting and unique aspects that trials randomized placebo controlled.
Study that enrolled approximately 350 patients at clinical sites in the U S.
What is unique about the design is that we're planning to assess two separate independent primary endpoints for the same steady population.
These endpoints include an evaluation of stroke recoveries you can the patients returned to normal physical function, so things like being able to eat space drive on their own and the rate of recurrence of acute ischemic stroke in the three months. Following initial stroke. Each of these endpoints is clinically meaningful and could greatly benefit.
Stroke patients as well as their families and caregivers.
So it gives us two opportunities to achieve an approval outcome with the FDA the adaptive study.
The design of the study is a second unique feature for the study.
<unk> adaptive refers to the interim analysis, we are planning after approximately 40% or 140 patients have completed enrollment.
The data safety monitoring board of the D. SMB for the study will review the results from these patients to evaluate the effects of Deamonte nine is having on stroke recoveries and the rate of recurrence based upon this evaluation D SMB.
We will take action from stopping the study for futility or overwhelming efficacy to continue the study as planned or increasing the number of study participants the benefit here is having the ability to increase the sample size.
If the actual benefit is looking like it's coming in below the plans benefit level, having the opportunity to increase the number of patients gives us opportunity.
To ensure that we achieve statistical significant outcome and had a successful clinical trial utilizing the adaptive trial design allows us to better manage the clinical risk increase our chances for completing a successful trial note that we will be blinded to the results of this analysis and are only know if and how the SMB.
Recommends that we move forward.
Let me also briefly highlight that Deamonte nine received FDA fast track designation for the treatment of Aaas last year. This is an important milestone and underscores the significant unmet medical need that exists among patients suffering from aaas, where there hasn't been a new or meaningful therapeutic advancements in over 25 years.
The fast track designation provides us with the opportunity.
For more frequent interactions with the FDA.
Eventually qualified <unk> nine for accelerated and priority review.
As an update on the sites, we have 10 sites now under contract and adding sites currently in startup phase we have engaged with over 70% of our targeted numbers of sites for the trial startup sites represent the sites that have been embedded interested in participating in our preceding towards activation to be able to enroll patients.
Unfortunately, we can't control Covid, but our clinical team continues to work with members of our scientific Advisory Board and other physicians in our network to reach out directly to the neurologists at key study sites to support making remedy to our priority study for their institutions, while it's unfortunate that the startup process has been a little slow.
So up to this point, we are encouraged by the fact that our issues have been COVID-19 related and not related to concerns about <unk> nine or the study design at the current rate of Covid infections, and hospitalizations have rapidly been declining we are optimistic that hospitals will be able to restore their research staffing. We're also in the process.
Are evaluating additional steps to potentially support site contracting and patient recruitment, we believe that we're well positioned to then engage them and advance the clinical trial.
In terms of our expected timing as we have discussed the ultimate timing for the completion of our interim analysis and the study itself will be driven by the rate at which our study sites are able to enroll patients.
Our current plans are based upon a fairly conservative projected enrollment rates. We are more optimistic after the recent quick declines of Covid cases, as I mentioned, we believe that the combination of our longer treatment window of 24 hours from stroke onset combined with our safety profile and the potential to improve both stroke recovery and reduce the risk of.
Stroke recurrence may drive a better enrollment rate, we will keep you updated as we get more clarity on both the site activation and enrollment rates as we hit milestones.
I'd like to also reiterate that the remedy to is our primary focus right now as we believe it has the fastest path to commercial approval.
Turning to our redox our phase III <unk> program, we recently completed enrollment and they're working through the final patient follow ups and cleaning the study data to prepare for the final analysis and reporting as most of you know <unk> is a basket or a signaling study in which we're evaluating three different causes of chronic kidney disease.
And two different dose levels of <unk> nine over approximately three months treatment period.
Currently the key takeaway from <unk> is that the <unk> represents an attractive development opportunity for <unk> nine we believe that the study is directing us towards targeting subgroup of hypertensive African Americans and or Iga nephropathy patients, who have moderate to severe kidney disease patients.
When both improving kidney function and controlling blood pressure could greatly improve their quality of life.
We look forward to updating you on the next steps after we complete the final analysis of the <unk> data and in terms of the next steps and potentially discussing our results with the FDA now I'll ask Scott Kellen to take us through the financial results for our fourth quarter.
Thank you Rick Good morning, everyone as Rick mentioned, we did announce our full year 'twenty, one financial results and filed our annual report on Form 10-K yesterday after the markets closed.
These documents are both available on either the <unk> or the SEC website.
Now going through the financials, our net loss for the full year of 'twenty, one was $13 6 million or <unk> 65 per share, which compares with our prior year net loss of $12 3 million or <unk> 78 per share our cash position remains strong with $45 1 million of cash cash equivalents.
And marketable securities as of December 31, 2021, which is up from $27 5 million at the end of the prior year.
We believe our current cash will support the clinical development of <unk> hundred 99 and fund our operations into early 2024.
Our research and development expenses increased slightly to $8 8 million for the year ended December 31 2021.
From $8 2 million for the full year of 2020. This increase was primarily due to a combination of the additional costs incurred for our phase III three remedy to trial and increased personnel costs associated with adding staff to support our expanding clinical programs. This increase was partially.
We offset by decreased costs incurred for our earlier remedy one the phase two study, which completed during 2020 and then decreased cost for the Redux trial as the number of enrollments in the trial declined through 2021 as the study nears completion.
Our general and administrative expenses were $4 9 million and $4 5 million for the full fiscal years 2021, and 2020, respectively.
The increase was due to a number of factors, including increased costs associated with professional services the payment to <unk> of a milestone obligation under our technology license agreement with Catlin.
Increased directors and officers liability insurance costs and increased personnel cost to support the company's R&D operations. These.
These increases were partially offset by a reduction in our noncash share based compensation costs.
Turning to the cash flows our net cash used in operating activities for the year ended December 31, 2021 was $12 3 million compared to $9 2 million for the full year 2020.
This increase relates primarily to our increased net loss in 2021 and are partially offset by share based compensation and the effects of changes in operating assets and liabilities and importantly, as I mentioned earlier, we believe our current cash will support the clinical development of <unk> 199, and our operations.
Into early 2024.
Now, let me turn the call back over to Rick.
Thank you Scott as you can see we've had a very productive 2021, which is continuing into 2022, including significant progress with the <unk> nine our clinical trials and building our team.
And with a strong balance sheet, we are well positioned to continue to execute on our plans. We have reviewed for you today with that we'd like to open the call for questions. Operator could you. Please introduce the first analyst.
Thank you at this time I would like to remind everyone in order to ask a question press star one on your telephone keypad.
First question comes from Alex Nowak from Craig Hallum Capital Group. Please go ahead.
Great. Good morning, everyone Kirsten I appreciate the intro.
Your background of what attracted to the company just curious beyond the pivotal stroke study that's going on can you walk through some of the additional study as lab bench data that you're looking to generate here over the coming months to years to help physicians.
Company's product with them.
Yeah, maybe I'll take this so right now really our focus.
Our clinical team is on the remedy to trial.
And so while we're working on that we are starting to looking at what next steps potential steps are for the kidney program, but which want to be sure that we're very focused here right now on the stroke pivotal trial.
Okay understood and maybe refresh us and this is I guess, a broader question refresh us the.
The regulatory landscape for chronic kidney disease in the U S. Now because we saw this krell from Reata recently I mean, they were kind of paving the path forward. So does the broader TKD space do we need do we know necessarily the path necessary to get through FDA approval. At this time do we need to reset it with kidney metrics need to focus on like you ACR.
Our Egfr does that any thoughts there.
That's a really good question Alex So if you look in 2019, there's new guidance from a working group with the National Kidney Foundation, the FDA and EMA <unk> that really is looking at surrogate endpoints for approval and so our understanding and particularly when we're looking at rare forms.
Kidney disease is that there is a potential to have conditional approval.
Based upon you ACR, the Alban urea levels and guidelines is ideally over 30% reduction over six plus months for the conditional approval and then full approval over two years based upon a slowing in the rate of decline of Egfr and I think we can look at the <unk>.
Recent approval of <unk>.
Based upon upon their UHC art, just going back back to a few months. So I think we're very encouraged in terms of the potential regulatory path here for.
For chronic kidney disease and so what we're currently looking at we have a few different potential pathways.
To move forward in terms of kidney disease, focusing more so on the the hypertensive African Americans and maybe a subgroup of these patients.
And or Iga nephropathy. So again, we want to look a little more carefully at our data I didn't really see what which cause of kidney disease. We think would be the best fit for our therapy and also in the context of the competitive landscape. So we're.
We're very excited about the potential.
And we just want to make sure that before we come out and provide an update to the market. We have a very clear indication of what that cause and what that regulatory path will be going forward.
Yes. It makes total sense and then just a clarification question.
And around the enrollment. So you said 10 sites were under contract are those the number of sites that are actively enrolling patients and if not what is that number of actively enrolling and then how long to convert 70% of targeted sites under discussion.
Enrollment just based on where things are trending in the last month or so.
Yes, so actually we can actually follow live on that clinical trials like obviously, it's a couple of weeks late but we got four or five sites right. Now that are that are actively recruiting.
The intent here is to provide everyone with an update on enrollment milestones.
Along the way.
And just with a little bit of additional color here, so with the COVID-19 varying both the delta and the Omnicom surgery in the second half of the year. There was some challenge with the sites that were shifting their staff away from from research.
But what we can share with you. This time is that we're not having any trouble getting interest from sites that have the research teams in place.
Once committed they've been steadily moving this process forward.
Binding that whats the with the response that we got at the recent international stroke Conference. We don't have concerns about.
No most of the interest is really about now converting these sites over so you know we're talking in the over 50 sites in total here that are.
Contracted and are going through the process and so the other piece to this that we're also kind of refocusing is.
Really on focusing on those sites that we believe can enroll.
Greater than.
Greater than one patient per months really focused on all sides, we think will be the.
The optimal enroll ours and we're still targeting the first half of 2023 for the interim analysis.
Great. Thanks, Rick for that I appreciate it thanks Alex.
Your next question comes from Paul from Paris from Oppenheimer. Please go ahead.
Hi, This is Daniel on behalf of Frank Baseball. Thanks for taking the question.
Just a quick one could you add some more color on the importance of the inner.
The interim look, particularly in terms of efficacy.
Sure.
You already talked about the enrollment rate so.
Just wondering how the enrollment is going on given that you have.
This sweet spot of patients who need to have a small blood.
That's all closing in enrollment, but then drive four hours just to talk about the some color on the interim look that would be great. Thanks.
Sure, Yes, so at the interim analysis. So after you know 40% of the patients have completed therapy that the data safety monitoring Board will review the results and make a recommendation to us and how to proceed.
And there's really three different options three different potential.
Scenarios here that we anticipate so the first is to continue the study as planned.
Second is to increase the number of patients.
And then a third will be to stopping the study for either overwhelming efficacy or for a lack of efficacy.
So the premise here is that <unk> will be blinded, but it'll be an opportunity to really hear too. Most importantly to increase the study size if needed.
To potentially reach statistical significance.
That makes sense and.
And just one more.
Question on the <unk> side of things are you sharing anything on when we can expect to see the final <unk> data.
And as a related are you planning to move forward with the program yourself or is there any thoughts about partnership on that Ed.
Yes. So later this year, we're not anticipating any material difference from what's been reported.
And in particular, you can look at the ASN poster presentation, we had back back in back in November .
And right now we are exploring a number of different options and the potential of our partnership is one of the pieces that we are looking at as the potential next steps I think we won't be very careful about here is we don't want to do anything that will jeopardize our.
Our capital use of.
Funding, our our stroke program to get them to that interim and then just still have a runway post interim which is which is most important in terms of our capital budget right now.
Okay.
Great. Thanks for taking the questions. Thank you Danielle.
And there are no further question at this time I will turn the call back over to Rick Pauls CEO for closing remarks.
Alright, again, we'd like to thank everyone for joining us. This morning. We appreciate your interest in de Medica and your continued support with this we conclude our call.
This concludes today's conference call you may now disconnect.
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