Q4 2021 PolarityTE Inc Earnings Call
Okay.
Good day and welcome to the <unk> fiscal year 2021 earnings call. Today's conference is being recorded at this time I would like to turn the conference over to Cameron boiler. Please go ahead Sir.
Thank you operator.
And thank you for joining Florida East call to discuss fiscal year 2021 results on camera oiler General counsel.
Call today are members of the executive team, which includes Richard Hague, Chief Executive Officer, and President and Jake Patterson Chief Financial Officer.
Before we begin I would like to remind everyone that today's discussion will include statements about the company's future expectations plans and prospects may constitute forward looking statements for purposes of the safe Harbor provisions under the private Securities Litigation Reform Act of 1995.
We caution that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. These forward looking statements are based on our current expectations and may differ materially from actual results due to a variety of factors, including but not limited to those detailed under the caption risk factors that are described in our <unk>.
You'll report on Form 10-K for the year ended December 31, 21, and subsequent reports filed with the SEC.
Any forward looking statements made on this call speak only as of today's date Wednesday March 32022, and we disclaim any obligation to update such statements to reflect events or circumstances that occur after today's call except as required by law.
I'd like to highlight the participants of the call is being recorded a replay of the recorded call will be available on our website in the Investor Relations section shortly following the conclusion of the call.
Additionally, it is the property of Florida, and any redistribution retransmission or rebroadcast of this call in any form without flaherty to ease express written consent is strictly prohibited.
I would now like to turn the call over to Richard Hague CEO .
Thank you Cameron and good morning, and welcome everyone.
I'll kick off today's call with an update on our progress related to our R&D percentage as.
As well as share other highlights from the quarter and turn the call over to Jake Patterson, who will provide a financial update.
Clearly our most critical accomplishment was receiving approval from FDA.
N D to evaluate <unk> for the treatment of chronic cutaneous ulcers in mid January .
Since that approval, we have been working diligently to prepare for the launch of our first pivotal study under a I N D.
A multicenter randomized controlled trial evaluating <unk> T in the treatment of Wagner to diabetic foot ulcers entitled closure obtained with Vascularized epithelioid regeneration for DF use with skin.
Or cover D abuse.
I am very pleased to report that as of last week, we green lighted several clinical trial sites to begin identifying patients for enrollment and as a result, our first patient was consented on Monday, we are targeting up to 20 trial sites for the study and are on track to have approximately 16 sites fully operational by the end of May.
As a reminder, this is 800 patient study, where 24 week follow up.
Interim data readout targeted for Q3 of next year.
But those are your cause.
Those of you that have followed our story closely youre well aware, we have a great deal of positive outcomes with <unk> trading many types of hard to treat chronic continuous ulcers, while registered as a 361 http product.
This includes the outcome data from our prior <unk> and Bill you RCT studies that commenced during the 361 marketing period.
The study showed statistical significance versus standard of care at 12 weeks for complete closure and percent area reduction with the vast majority of patients needing only one application of <unk>.
As we've discussed previously it is this data that gives us a great deal of confidence in our ability to successfully execute on our upcoming pivotal trials.
Jake will provide more detail in a moment, but I wanted to highlight that we very recently raised $5 million in gross proceeds through a registered direct offering.
That offering was intended to both to provide us with additional balance sheet strength and is also expected to help us achieve the reverse stock split that was on our proxy for the special meeting of stockholders.
<unk> be held in May.
Additionally, we continue to see solid execution in terms of fiscal discipline with $22 6 million or $1 $9 million per month of cash used in operations. During the 12 months ended December 31 2021.
Paired with $37 8 million or an average of $3 2 million per month during the prior year.
I'd now like to turn the call over to our CFO Jake Patterson Jake.
Thank you Richard and good morning, everyone.
I wanted to emphasize that we have now completed our transition into a clinical stage development company. We will continue to be fiscally disciplined in managing our cost effectively and looking for ways to extend our balance sheet.
Operating costs and expenses decreased $12 9 million or 25% for the year ended December 31, 2021 compared to the year ended December 31 2020 the.
The reduction in operating costs and expenses is attributable to reductions in general and administrative expenses sales and marketing expenses and restructuring and other charges that were partially offset by increases in research and development expenses.
As Richard noted cash used in operations for the 12 months ended December 31, 2021 was $22 6 million or an average of $1 9 million per months compared to $37 8 million of cash used in operations for the 12 months ended December 31, 2020 were an average of $3 2 million.
Our goal continues to be maintaining a base operational cash burn, which excludes costs associated with clinical trials and DLA related activities.
Below $2 million per month on average.
We finished 2021 with approximate.
Approximately 19 points for of cash and cash equivalents and $17 7 million of working capital. We believe the cash and cash equivalents on our balance sheet will fund our business activities into the fourth quarter of 2022.
I'd now like to turn the call back over to Richard for some concluding remarks.
Thank you Jake before I close I'd like to briefly revisit the impact of chronic cutaneous ulcers have on patients.
Our entire health care system, and the opportunity that these hard to heal wounds presents the parrot key.
Chronic cutaneous ulcers are ones that have failed to progress through the orderly and timely tissue repair process necessary to restore the normal function of anatomy and anatomy of skin.
Diabetic foot ulcers pressure injuries, and venous leg ulcers make up the vast majority of products with any soldiers and affect an estimated 8 million patients annually or approximately 2% of the U S population.
The prevalence is expected to increase as the population ages and the incidence of diabetes cardiovascular disease and obesity continue to rise. Accordingly. These ulcers represent an enormous unmet multibillion dollar market opportunity and we expect that market to continue to grow over time.
The direct impact to patients and to the health care system is enormous product continues ulcers, often persist for years and some remain unhealed for decades.
Due to their chronicity.
These ulcers increase a patient's vulnerability to infection and have significant morbidity and mortality risk, which has increased and larger ones are the ones that extend through greater depth.
These patients there is a very real possibility of a partial or full limb amputation associated disability.
85% of non traumatic limb amputations are associated with chronic cutaneous ulcers with an estimated limb amputation occurring every 30 seconds and finally recent studies have shown a two X the six X greater risk of mortality, where chronic cutaneous ulcer patients compared to match cohort.
It's.
It is for these reasons that every one of our team is related to begin treating patients again under our R&D.
I am incredibly proud of our team for the significant progress we've made in the 10 months since we've seen start 361 marketing efforts.
Lastly, during the latter half of 2021, we engaged in discussions of certain third parties regarding M&A and strategic initiatives due to the volatile market conditions deal was not completed however, we were highly encouraged by the fact that this opportunity was in part initiated by positive feedback regarding SKU.
<unk> from physicians that was communicated directly to potential strategic partners.
I am confident that our recent accomplishments combined with the tangible milestones we expect to achieve in the coming quarters will effectively positioned the company to consider future potential strategic opportunities in order to pursue commercialization of <unk>.
Upon BLA approval.
Thank you I'd now like to open the call for Q&A.
Thank you Sir.
He is in Germany, if you wish to ask a question at this time, please sigma by pressing star one on your telephone keypad.
Make sure your mute function on your phone is switched off to allow your signal to reach of equipment, they've always prompt and if all that will indicate when your line is open to ask a question.
Well now take our first question from Kristen <unk> from Cantor Fitzgerald. Please go ahead.
Hi, good morning, Thanks for taking my questions and for the additional color on the call. This morning I wanted to first ask if the previous guidance that you laid out in terms of Wagner to DFT you trial 24 to 30 month enrolment. If you still think this is a fair way to.
Look at things in light of some of your comments around enrollment right now, but also around the sites that you plan to work with as well.
Yeah, Hi, Christian good morning, and thanks for your question, Yes, I still feel very confident about the timing.
Based on our past experience, we think that the.
Those timeframes are achievable.
And we're excited to start enrolling this month.
Looking forward to our first skins.
Patient being treated later this month ideal it.
Okay. Thanks, and is there any update around.
Running a second trial or if this is something that you think you could potentially do in parallel or if the agency wants to see the data from the Wagner GDP study before starting that trial.
Sure Great question. So we have had some informal communications with FDA and we're actually going to be requesting a formal.
A discussion with them to make sure that we're aligned on that second study. Our plan is to most definitely I'll start that study before year end.
But we want to make sure that we communicate with FDA to get alignment about the study size and design and criteria et cetera.
As of now we would expect to most likely run a study in <unk>.
Gil you patients.
But that's still to be determined and as I said, the timing hopes to be before before year end that will get that kicked off.
Okay. Thank you for taking my questions.
Thank you.
As a reminder to ask a question please signify by pressing star one.
Well just assembling the queue. Please standby.
And the next question comes from Cobb Sadler from Catamount advisors.
Hey, Richard How's it going.
Hey, Joe Hey, Richard Thanks, Thanks for taking the question I just had a question on.
Your strategic initiatives, so could you talk a little bit about.
No.
Maybe how that came about what happened there.
And then maybe what you.
What you might look to do going forward as it relates to.
Partnerships or.
Maybe an acquisition, maybe maybe maybe you acquired.
What are your thoughts here because.
I'll do a follow up if you if you have an answer for that.
Sure.
Limited to how much I can discuss relates to the non disclosure that we have.
With other parties.
As I mentioned on the call.
Yes.
The outreach was initiated actually based on the feedback from the previous skin to users.
Who have given feedback to various companies around our technology very positive feedback so that was the genesis of the initial outreach.
And ultimately as I said.
After a fair amount of time.
Yes.
Extended out the process that ultimately didn't come to fruition because of.
The market conditions that everyone's been experiencing over the last quarter or so.
Our plan as always has been to continue to.
Keep our eyes and ears open.
To look for different options available to us in order to ensure that the company can successfully achieve its strategy of obtaining a BLA for <unk> and that will continue to be our strategy going forward.
Okay, Okay that sounds good because I look at the market opportunity.
Your trial results.
<unk> looked at there's gotta be interest from.
Definitely from a capital raising perspective, but also from a strategic perspective.
And so.
I guess.
Would you open up a formal process.
Or are you just kind of execute daily.
Versus your Youre F D a.
Initiatives so.
So what what would be the plan are you going to because it sounds like maybe this came to you.
If I have that right I mean, I have that right, but would you would you do would you open up a more formal process at some point because at some point.
Get through your results are great, but you probably got even more capital to get the FDA approval. So you've got to do something.
At some point, maybe maybe toward the end of the year and so what would be what would be the plan. There just execute see what happens or would you open up or some sort of process.
Sure well certainly Greg.
To focus on executing.
Our current clinical trial and working with FDA to get the second trial.
<unk> cleared and up and running as well I mean, that's absolutely priority number one.
And certainly in parallel to that.
As I said before we're going to continue to.
To keep our options open.
And to work with various parties to identify.
Various methods to ensure that we can.
To execute from a financial perspective.
That could take on.
Various forms.
As we've mentioned in the past on past calls.
We are certainly open to discussing a potential strategic opportunities such as partnerships and such.
We'd also obviously continue to want to tell our story to the <unk>.
<unk> community too.
To build momentum behind what we think is a very exciting story.
Very exciting progress that we've made and what we expect to make so.
At a high level, we're going to continue to keep all options open and we will be.
Barry.
Softball, and aggressive as we need to be in order to ensure that we can be properly positioned to execute on our clinical development strategy.
Okay well.
Congrats on the progress you're definitely doing as well as you can based on what you can control and that's really that's really all I can do it at this point, but.
Yes, I mean, youre executed as well as you, possibly can on what you what you can control.
Thats good okay. Appreciate it thanks a lot.
Thank you I appreciate it.
Yes.
Thank you with this I'd like to hand, the call back over to you.
Although to your comment for any closing remarks.
We'd just like to thank everyone for joining today's call and thank you for your support we appreciate it.
<unk>.
Thank you. This concludes today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.