Q4 2021 Brickell Biotech Inc Earnings Call
Greetings and welcome to Brickell biotech fourth quarter and full year 2021 financial results 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 Garth Russell of lifestyle advisors. Thank you you may begin.
Thank you operator, and good morning, everyone. Joining me on today's call are <unk>, Chief Executive Officer, Rob Brown, Chief operating Officer, and scholar Chief Financial Officer, Bert Marchio, Chief Medical Officer, Dr. Monica Lewinsky, Chief R&D Officer, Deepak Chadha.
Before we begin I would like to remind everyone that this conference call and webcast will contain forward looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward looking statements reflect our opinions only as of the date of this call. We will not undertake obligation to revise or publicly release the results of any revision.
To these forward looking statements in light of new information or future events factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filings on Form 10-K , and our other periodic reports on forms 10-Q, and 8-K filed with the SEC.
I would now like to turn the call over to the company's Chief Executive Officer, Rob Brown, Rob the floor is yours.
Thanks, Gary Good morning to everyone. Thank you for joining our call today.
Last year was an exciting period in our company's history as the entire brickell team executed against our growth strategy and successfully delivered on several key milestones that we believe will strengthen our ability to create long term value for shareholders.
This is highlighted by our recent partnering activity through which we have now established our presence in the field of immunology and inflammation by expanding our pipeline with multiple proprietary new chemical entities that modulate promising novel targets.
These include our phase one ready oral JAK, one inhibitor <unk> zero two.
Preclinical stage <unk> inhibitor portfolio, including our lead staying inhibitor candidate BVI 10, and our next generation kinase inhibitor platform.
All of which we acquired over the past seven years.
We believe that our teams clinical and regulatory.
Experience and track record of operational execution is what sets <unk> apart as a trusted partner to lead the development of these assets.
A perfect example of this is soft groan suffering bromide, our most advanced program, which the brickell team developed from early preclinical stage to its current NDA ready stage.
As you may recall during the fourth quarter of last year, we announced positive data from our two U S phase III pivotal clinical studies or thoughts running bromide gel, 15% or S V gel for short.
The treatment of primary axillary hyperhidrosis also known as excessive underarm sweating.
In both studies, all primary and secondary efficacy endpoints achieves statistical significance and S. V gel was generally well tolerated over six weeks of treatment.
We believe the results of these studies further support the potential for S V gel they become a best in class treatment option.
Earlier this quarter, we held a pre NDA meeting with the U S FDA for SB gel.
Based on the outcome of this meeting we remain on track for NDA submission in mid 2022, as we continued to evaluate in parallel all available options to maximize commercial product success now.
Now I'd like to pass it over to Deepak for an update on our pipeline D box.
Thanks, Rob and good morning, everyone.
As I've just mentioned.
We are encouraged by the positive results from our phase III pivotal clinical studies are best teach out.
In addition, we were pleased to announce last week that these results up over phase III pivotal clinical studies or S Beach L will be highlighted during a late breaking oral presentation.
The 'twenty to 'twenty, two American Academy of Dermatology annual meeting being held in Boston and at the end of this month.
These results are important as they further support the safety Tolerability and efficacy data that has been observed that speech L and will form the basis of an NDA submission, which we remain on track to file with the FDA in mid 2022.
Moving on to our lead development stage program B B is you do too.
<unk> is a highly selective and orally bio available drugs and the better that we plan to develop for the treatment of a broad range of autoimmune and inflammatory diseases.
Based on the scientifically robust data package the promising preclinical validation that has been observed with this compound we believe that B b as you don't use it all.
A lot of action moderating both the adaptive and innate immune systems could represent a paradigm shift in the way. We currently treat these debilitating diseases.
The team has made great progress since bringing in this program from war noise, a south Korean biotech company focused on the discovery and development of novel kinase inhibitors.
We're on track to initiate a phase one clinical trial in Canada, and second quarter of 2022, which will refer to as BVA dash two dash 101, or the 101 study.
One O. One study designed to evaluate the safety Tolerability pharmacokinetics and pharmacodynamics of B B is either too in both healthy volunteers and subjects with atopic dermatitis.
But one day up the study is a single ascending dose assessment or sad in healthy volunteers, but one b is a multiple ascending dose or mad. That's that's meant to tell the volunteers and part two will compare.
B B S zero to two placebo in moderate to severe atopic dermatitis patients and then also include a preliminary assessment of efficacy.
We expect to report top line results from the Sad and Mad portion of this one O. One study by event.
As announced just last month.
White exclusive global rights to our portfolio of novel potent and orally available skin in the business from Cardinal Biosciences.
Drug discovery company in Japan.
But Stan sports stimulator of interferon genes is a vote known mediator of innate immune responses.
Excess of signaling through staying is linked to a number of high unmet need diseases, ranging from autoimmune disorders, such as supposed to make lupus erythematosus and human Tiger tightest.
Set of rare genetic conditions donuts interfering or 37.
Several established pharmaceutical companies have recently invested in this space and we are excited to develop the next generation thing inhibitors that we believe are differentiated by their equivalent inhibition up staying polymer deletion.
Preclinical development activities are underway for our lead thing isn't it better be B, I 10, which has shown proof of mechanism, resulting in significant reduction in key pro inflammatory cytokines.
We also expect to conduct experimental characterization of staying in the better library throughout 2022.
I would like to briefly touch on what next generation kinase inhibitor platform that can be also acquired last year from more noise.
Platform encompassing hundreds of new chemical entities that inhibit dark one eight L. R. R. K two T T K and click kind of hits, but some penetrating the blood brain barrier.
We are currently engaged in research to identify characterize and optimize these kinase inhibitors with the goal of progressing them as potential treatment options for autoimmune inflammatory and other debilitating diseases.
I would like to now turn the call over to Bert to provide a financial overview, but.
Thanks, Deepak and good morning to everyone on the call.
Before I provide a summary of the fourth quarter and full year 2021 financial results I want to encourage you to read our full consolidated financial statements and M. DNA contained in our report on Form 10-K , which can be accessed through the investors section of our website.
Once filed with the FCC.
First I'll cover the fourth quarter results, then I'll move to the full year.
Starting with cash the company reported $26 9 million in cash and cash equivalents as of December 31, 2021, we.
We believe our current cash position will support our operations beyond the receipt of phase one sad and Mad topline results for Bebe is zero to which our anticipated year end 2022 .
Revenue for the fourth quarter of 2021 was approximately 104000 compared to 27000 for the fourth quarter of 2020.
Both of which consisted of royalty revenue we recognized from the sales of E clock in Japan by our partner Kotkin.
R&D expenses for the.
Fourth quarter of 2021 .
Excuse me R&D expenses were $3 1 million for the fourth quarter of 2021 compared to $4 6 million for the fourth quarter of 2020. The decrease was primarily due to a $2 9 million reduction in clinical costs related to SB gel, which is partially offset by a 0.9.
Increase in regulatory personnel and other expenses and a point 5 million increase related to development of the company's Dirk one eight inhibitor programs.
G&A expenses totaled $3 3 million for the fourth quarter of this year compared to $2 9 million for the fourth quarter of the prior year.
The increase was primarily due to higher compensation and administrative expenses.
Our net loss for the fourth quarter of 2021.
It was $6 1 million compared to $7 4 million for the fourth quarter of 'twenty 'twenty.
Turning to the financial results for the full year 'twenty 'twenty. One we reported revenue of <unk> 4 million for the year ended December 31, 2021 compared to 1.8 million for the year ended December 31 2020.
Revenue in 2021 consisted of royalty revenue recognized related to the sales of E clock in Japan by Kotkin, while revenue in 'twenty 'twenty was driven primarily by collaboration revenue recognized for research and development activities under the Kotkin agreement for us.
<unk>, two which kochan provided research and development funding to the company.
Research and development expenses for 2021 were $28 2 million compared to $11.2 million for 2020.
This increase is primarily due to an increase of $10.7 million and clinical cost related to the company's U S. Phase III pivotal clinical program for S. B gel an increase of $5.4 million in upfront cost and development of this.
Sing inhibitor.
B BB I 10, and the next generation kinase inhibitor platform excuse.
Yeah.
Sorry about that.
Companies are Dirk Oner inhibitor program in next generation kinase inhibitor platform and an increase of <unk> 9 million in personnel and other expenses moving forward. We expect our R&D expenses. This year to decrease as we focus our R&D efforts on our development stage program.
Yes.
General and administrative expenses for 2021 were $12 4 million compared to 11 6 million for 2020. This increase is primarily due to higher compensation and administrative expenses total other income for 2021 was 0.8.
Compared to <unk> 1 million for 2020.
The increase was due to a gain on extinguishment of debt of approximately <unk> 4 million from the forgiveness of the PPP loan in June 'twenty, 'twenty, one and other miscellaneous income of <unk> 3 million or a net loss for 2021 was $39 5 million.
And compared to $29 million for 2020, and with that I'll turn the call back over to Rob for closing remarks, Rob.
Thanks for the recap Bert.
I stated at the beginning of the call in the past year was a pivotal one for the company as we broadened our strategic strategic focus by expanding our pipeline in immunology and inflammation and delivering positive phase III results for SB Jill.
Looking forward, we have several exciting near term milestones this year, including the phase one sad Mad topline results for <unk> zero to.
Further development of our Sting inhibitor BVI Chen and the next generation kinase inhibitor platform in.
In addition, we remain on track for the submission of our NDA for S V gel in the coming months and as previously mentioned, we continue to evaluate all options to maximize the commercial success of S V gel.
This concludes our prepared remarks I'll now ask the operator to open the call up for questions operator.
Thank you we will now be conducting a question and answer session. If he 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 he 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, but one moment, please while we poll for your questions.
Our first questions come from the line of Tim Lugo with William Blair. Please proceed with your questions.
Thank you for the for taking my question and congratulations on the late breaker coming up at AAD.
First however on the one O. One study can you give us a little more color on how many patients will be involved in the park.
I guess, the part one a as well as the two parts of the one b.
And also the duration of exposure in the.
The phase one b part to part of the study.
It gets a little complicated.
<unk>.
Yeah, Let me, let me turn that over to Monica to get a little more detail on the phase one study design moniker.
Sure Hi, Tim Good morning, I'll answer the first part of your question first and I'm not sure I quite got the second part so let me let me try.
We expect the first part of the study.
Single ascending dose portion of the study that 56 patients that's fine.
The phase one deal or multiple ascending dose portion will have at least 33 patients that'll be in three different cohorts.
And we plan to enroll about 30 to 40 patients with atopic dermatitis for part two of the study which would be a patient person of the study.
Does that answer all of your question or was there another part.
Yeah, I I guess for the.
And is it.
It's how many doses I guess for the one b portion.
Will it be you know I know that there's a single ascending dose portion, but how many in the multiple ascending dose portion.
So we'll have three different cohorts.
So we expect to have.
Likely three different doses, obviously, that's going to be informed by the sad portion within the single ascending dose portion we had seven doses in defending from 10 milligrams to 600 milligrams and determined by the PK and the windy window that you see there the therapeutic window in terms of safety.
Some of the other signals that we're looking at.
And they do study provided the data supports it.
When you look at three days.
Okay great.
And.
And well get some efficacy data from the part two portion.
Hopefully by year end.
No it'll be the part one a in the part D, which is a single ascending dose multiple ascending dose that data top line data will be available by the end of this year.
And part two is patients that won't be available until may.
Mid next year to Q3 next year.
Okay, and I assume that'll be easy scores and maybe well, we get any kind of cytokine data at all as well.
Well, we'll certainly be affecting that absolutely we have a whole host of data that we'll be collecting which will inform us and I'm talking about the direct lending well certainly be looking at the clinical outcomes. Remember this is a it's only a 28 day study for now because because that's what we have talked to support a Saturday E C.
Read out that'll be preliminary and this study will have the data, but I don't know that we're actually going to see our most effective impact at four weeks and I went out and stuff that because he knows many drugs in a b take maybe eight weeks to come up with the best possible effect, but we will be collecting that data.
Also have cytokine data well kind of have a variety of different pharmacodynamic markers.
With regard to the different cell populations in cellular surface markers on top of that we'll have histology data, which will tell us about inflammatory.
Sounds good and the tissues themselves I will learn about the resident T cells.
And we'll also have data from paint stripping, which will give us genetic data from the skin.
With AP.
Great. Thanks for all the clarity and I guess, you know kind of looking bigger picture for Robb keeps.
Can you just talk about kind of the status of South Korean bromide partnering discussions.
Yeah, I mean, we've.
And as you as you might imagine we're kind of looking at all at all our alternatives.
At this stage of the game in terms of using the.
The contract sales organization doing ourselves or having a partner. So we haven't made a call on this yet but specifically in terms of the partnering conversations we've had multiple conversations on.
Are pretty encouraged by what we've heard from several you know of.
The players, but nothing nothing has been decided yet.
Understood. Thank you for the update.
Yeah.
Thank you. Our next question is coming from the line of Mitchell Kapoor with H C. Wainwright. Please proceed with your questions.
Hey, everyone. Thanks for taking the questions just wanted to ask about B B I 10, and if you can kind of just give us some more context on the landscape and you know where this asset sits in the context of the other suggesting inhibitors from Astrazeneca and Novartis and how you think about positioning and differentiation in the con.
Text a dozen others.
Sure maybe I'll start then I'll I'll turn it back over to Mark I mean first off remember obviously these are all really early you don't believe any any of this thing inhibitors have entered man yet.
So.
Have a real specific comparative of where they are or where you are going to go is a little tricky, but Monica why don't you want to provide a little more context to my comment.
Sure I I absolutely want to.
Reemphasize, what you just said Rob we don't know I think molecule is going to be difficult to say exactly how it will differentiate them. We do have a it could be a rebound and inhibits the telenet relation site, which is a bit different from several of its inhabitants, although not so different from the known.
Artist Flume inhibitor.
We haven't seen any clinical data on the existing inhibitors. So I don't feel we're.
That's far behind although we haven't started the IMD, enabling studies that we'd probably have a year and a half two years to go before we get into the clinic.
Okay, great. Thank you for that.
And just one more kind of on the decline in R&D I know you mentioned that you foresee potential further declines could you kind of talk about the cadence of how you expect R&D to trend in 2022.
Yeah, I'll I'll handle this one yes as you might imagine our R&D expenses are down because last year, we were running a phase III study and this year, we're running a phase one study.
So the the in general what Youll see is there's a bit of a tail on the phase III that runs into the first quarter of this year not not a lot, but some and then we will have some pick up in R&D expenses as the phase one mad sad get going but the overall expenses obviously.
It would be substantially less than in previous years.
Okay, great. Thank you all for taking my questions.
Thank you. Our next question is coming from the line of Leyland Gershon with Oppenheimer. Please proceed with your questions.
Hi, good morning, Thanks for taking my questions and congratulations on the progress.
A few questions for me.
On B B I 10, just curious as you continue with your preclinical development activities with that asset is that.
Are you looking to and have specific learnings there with respect to the compound in the directions. You may take it as you went through the clinic is it more just blocking and tackling for the kind of regulatory requirements, you know to get to an Indian and at what point. If you have an expectation to bring that into the clinic, we can see that enter perhaps in 2023.
And I have a follow up thank you.
Yes, let me kind of answer that the first question, where our current target is 2024.
When we get into it and you know obviously, if the soft target because the asset is so early and we're still learning a lot about it you know we've only had his or her hands now about a month and so a lot of the things we're right. They're doing right. Now is is is really looking at what's been done validating <unk>.
If I see the whole package, obviously greater detail that you can do.
During diligence.
And then and then developing that plan to go forward, but best guess, it's going to be 2024.
In terms of when we when we get them into man.
Alright terrific and then you know as you guys have been on a roll with business development and expanding the pipeline with them with these various assets wondering is as you look at our company evolution. Further I'm wondering if you are looking at.
Any.
Mid stage compounds to bring in and perhaps those that are in the clinic kind of filling that gap between what you have on the preclinical side with with staying in Brooklyn, and the other <unk> kinase inhibitors and obviously your you know.
Pre commercial candidate.
Thank you.
Yes, thanks, and thanks for the question and you know Youre right. Obviously, we have an early or late.
Early pipeline and.
We're always on the lookout for interesting exciting assets are obviously once you get into more of that mid stage pipeline and the price tag goes up quite quite dramatically. So you'd have to be the right asset right situation for us to do that we wanted to make sure that we're spending our money on things that are truly innovative though.
And we wouldn't want to just bring something in.
The closer we think we think there's more value in being a truly innovative company that theyre doing that we've also now have a library of almost 1000 assets that we're gonna be screening and looking at and we're excited about those we think theres some very unique things and they're obviously, they're very early so they don't they don't fill the hole you're talking.
[noise] about but we don't have a desire to sell it just to fill it if we found the right asset at the right value, we would certainly take a hard look at that.
It makes a lot of sense very good. Thanks, so much for taking the questions.
Okay.
Thank you our next questions come from the line of Thomas Flaten with Lake Street Capital. Please proceed with your questions.
Yeah. Good morning, Thanks, guys for taking the questions with respect to the NDA submission any significant outstanding components of the NDA, but that remain are on on the to do list or kind of can you.
Mid years, there's still a bit of a squishy target I was wondering if you could maybe frame up some of the critical path items. There that were that are ongoing before that our submission was ready.
Sure why don't I toss.
Thomas why don't I want to turn it over to deep pockets. He has been leading that activity for us.
Sure. Thank swap Hyatt Thomas up so are they getting the S V gel the India platform I think that's what you're getting full throttle.
Earlier this year, we met with FDA for the pre NDA meeting.
Meeting went according to the plan and you don't have a complete package and we are still on track to file by mid 2022 .
More so there are there were no additional clinical studies are required coming out of the pre NDA meeting. So the package is complete and we are putting all of the modules together.
You don't do file by mid 'twenty two.
Yeah great.
Hum.
I think I'd add to that the FDA asked for a couple of different data analyses them. We're doing that that takes a little bit of time, but everything is really on track and we feel really good and confident about our ability to get this this package put together.
Yes.
And then with respect to and I know we're probably.
15, 18 months out with respect to prepping for commercial launch whether you go to when they go with a partner where are we with manufacturing readiness things like that is that all moving forward or is that TBD based on the strategic decision anyway.
Yeah, I mean, the manufacturing I would say we have our manufacturing all are all aligned in.
You have to have the right partnerships in place to be able to commercialize the asset there are some things obviously that are dependent on how you go to market that not being one of them frankly, because if we were to license it out they're gonna whoever licenses, it's gonna want it want to take advantage of that work.
But but we're excited about the <unk>.
Yes, we've made we're happy to be presenting the phase III data at the upcoming meeting and we're encouraged by the interest we've gotten from various partners potential partners.
And then one final one what is the qualitative or quantitatively what whatever you have feedback youre getting from you know patient experience in Japan at this point.
You know in general it's been it's been positive.
Obviously, the <unk> sales have been impacted a bit by the the limitation of a two week script in Japan, which is a Japanese.
Japanese anomaly, if you will if patients have to come back and get it.
Get a new prescription every two weeks that limit the type of patient you get that went off and are at the end of the year. So we're hoping to see obviously sales grow.
As you get out of that it's also been significantly impacted by Covid as the number of patients who are willing to go see doctors has gone down a bit and some market demand because obviously, you're sitting on the zone hyperhidrosis isn't it.
But the feedback on the product and the feedback on the experience has been very very positive some of that translate to I mean in the U S.
Some of it doesn't because remember there at 5% does in the U S. This is a 15% dose but overall.
Canada has been good.
Happy with the experience patients have had and are still very committed and excited about the potential of the crop.
Very much appreciate it thank you.
Yeah.
Thank you there are no further questions at this time I would now like to turn the call back over to Rob Brown for any closing comments.
Yes.
Thanks for taking the time to listen to our update as always please feel free to reach out to us at any time for further questions and have a great day bye.
Right.
Okay.
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.
Yeah.