Q1 2022 Provention Bio Inc Earnings Call
Because of our leadership team available to address your questions.
Before we begin let me remind you that the various remarks, we will make today constitute forward looking statements.
These include statements about our future plans and expectations.
Clinical results regulatory and other developments and timelines related to our product candidates, including.
Including our plans to continue working with the FDA as they review, our BLA resubmission and continuing efforts towards securing a potential FDA approval for and commercialization of Deposi Nab for an at risk indication.
As well as the planned delivery of significant catalysts over the next 24 months.
The potential safety efficacy and commercial success of proposing map and our other product candidates.
The potential COVID-19 impact on our clinical studies and business plans.
Financial projections, including our anticipated use of cash and our cash runway and our business plans and prospects and projected timing for the same.
Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent quarterly report on Form 10-Q, which we filed with the SEC. This morning.
And in other filings that we may make with the SEC in the future.
Any forward looking statements represent our views as of today only.
While we may elect to update these forward looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views change except as required by law.
Therefore, you should not rely on these forward looking statements as representing our views as of any date subsequent to today.
There is more complete information regarding forward looking statements risks and uncertainties in the reports prevention files with the SEC.
These documents are available on prevention web site at Www prevention bio dot com under the investors section.
We encourage you to review these documents carefully.
With that I will now turn the call over to Ashley.
Thank you Bob and thank you to everyone joining us on this morning's call.
We are very excited to speak with you today not only about the progress made throughout the first quarter.
But where that progress and the catalytic potential of our pre commercial asset to <unk>.
Now take prevention and the patient investors.
The stakeholders we serve.
In January we participated in a successful type b meeting with the FDA to review, our pharmacokinetic data and modeling.
As well as the Pharmacodynamic results from our PK PD sub study.
Under our protect phase III trial in newly diagnosed type one diabetic patients.
The FDA did not request further clinical data.
But instead proposed the use of additional modeling to potentially address the PK comparability consideration set out in the agencies complete response letter issued.
Issued last July .
We immediately accepted the Fda's recommendation deploying a population PK model developed in close collaboration with the agency to.
To demonstrate how modest adjustments to <unk> dosing used in the at risk <unk> 14 day regimen.
Good match the exposure of prevention planned commercial product with that of clinical trial material manufactured 11 years ago.
Three weeks following the January type B meeting.
Our team was able to complete the resubmission of our biologics license application or BLA for the delay of clinical type one diabetes in at risk individuals.
I'm 30 days later in mid March we.
We were delighted to report that the FDA had accepted our Resubmission for review.
Assigning a user fee goal date of August 17th.
During the first quarter, we also reported significant progress across our other pipeline programs focused on the prevention interception of serious autoimmune diseases.
In January we announced the initiation of the <unk> two trial for <unk> hundred $32 79.
Our investigational humanized bi specific therapeutic scaffold.
Targeting the CD 32, B and CD 79, b surface proteins on B cells.
The $32 79 has the potential to intercept the underlying pathophysiology of B cell mediated autoimmune diseases, such as systemic lupus arithmetic.
Or S L E.
What prevailed two trial, which we are conducting in conjunction with our PR the $32 79, greater China licensee and partner Platon Medicine.
Is a phase II a proof of concept study enrolling patients with moderate to severe SLE in both the United States and Hong Kong.
The trial is targeting enrollment of approximately 100 patients who will receive monthly infusions of active or placebo drug product.
Over a 20 week period.
The primary efficacy readout at 24 weeks.
We expect topline results from this trial in 2024.
Additionally, this past quarter.
We continue to screen and enroll patients with diet nonresponsive celiac disease.
The phase two be proactive trial of our Amgen partnered anti IL 15, human monoclonal antibody or the <unk> or <unk> or one five.
Also.
As per previous guidance, we reported results from the final analysis of our phase one first in human prevent trial for <unk> 101.
A polyvalent coxsackievirus B vaccine candidate.
Targeting the key viral strains associated with type one diabetes.
The final results showed this trial's primary endpoint was met.
And confirmed the Tolerability observed in our previously reported interim analysis.
In particular, there were no treatment emergent serious adverse events.
Adverse events of special interest.
All adverse events, leading to study drug discontinuation or withdrawal.
The results also show durability of viral neutralizing antibody responses.
With 100% of subjects in the high dose arm, maintaining high titers to the majority of vaccine targeted series types.
We consider these results to be extremely encouraging and enabling us to explore prospective partnerships to advance <unk> 101 towards possibly becoming the first vaccine to prevent coxsackievirus b infection and its acute morbidity.
<unk> and mortality.
As well as potentially decrease the global incidence of associated type, one diabetes and celiac disease.
Earlier, I made reference to the catalytic potential of lithium.
Since the successful filing of our U S breakthrough therapy designation.
And our prime and innovation passport designations in Europe , and the U K.
We have not only witnessed considerable growth in <unk> potential to bring about fundamental change to the patients and stakeholders we serve.
We've actually begun to realize.
We experienced that change.
Mainly the prospect of an FDA approval for the first disease modifying therapy to delay clinical type one diabetes in at risk individuals.
Has generated heightened visibility and awareness of the importance and benefits of screening for two auto antibodies.
Not just for the relatives of existing insulin dependent patients, but also with respect to general population screening.
Medical societies key opinion leader academic consortium.
<unk> advocacy groups and corporations are now engaged in meaningful collaborative multi stakeholder dialogue.
This dialogue has shifted from house screening can reduce the <unk>.
<unk> of diabetic ketoacidosis.
How the revision of screening guidelines can help to identify at risk <unk> patients in anticipation of the potential approval of immuno modulator therapies like <unk>.
J D Rs <unk> detect program.
Other screening initiatives now bring disease screening awareness education patient support and affordable <unk> auto antibody testing to the kitchen table.
At risk <unk> patients and their family.
And we are proud to be a founding sponsor of J D Rs efforts.
If <unk> is approved by the FDA in August now only 15 weeks away <unk>.
Prevention will begin realizing its founding mission to change the world by providing a disease modifying therapeutic option.
So a patient and clinical community that has been deeply underserved for decades, and highly frustrated and burdened for generation.
We believe this fundamental shift in paradigm could have a profound impact on patients many of whom present with tier one <unk> for the first time in life threatening metabolic crisis.
And for those diagnosed under the age of 10, a reduced life expectancy of 16 years.
It also represents a major catalyst for change.
Prevention.
On the development front, we believe it will validate our founding conceptual platform and pipeline and our belief that life, threatening and debilitating autoimmune diseases, such as type one diabetes celiac.
Potentially have their progression intercepted and delayed.
If <unk> is approved it will also lay the foundation for what we believe will become a meaningful therapeutic franchise <unk>.
Beginning with at risk <unk> label expansion focused on children under eight years of age.
<unk> re dosing tablets enough to potentially extend the two to three year medium delay in clinical <unk> onset that was demonstrated in the TN 10 study and its follow up using a single 14 day course of therapy.
In the second half of next year, we expect topline results from our ongoing <unk> phase III trial in newly diagnosed patients.
And in parallel we anticipate the continuation or startup.
Collaborative development programs using <unk> in combination with tolerance genetic platforms like that of our existing partner active buyer.
As well as pancreatic islets and beta cell transplantation programs targeting the growing market of $1 8 million and stage insulin dependent type one diabetics in the United States alone.
It is worth noting here that Empire published studies.
The addition of <unk> to islet transplantation induction regimen has been successful in extending the durability of favorable post transplantation results.
With 75% of transplanted patients remaining three from the burden of insulin dependency.
For more than five years.
Outside of <unk>, we plan to explore the potential use of <unk> across other autoimmune related disorders, especially.
Especially failure.
Which to date have no therapeutic option for patients other than attempting to avoid contamination from anti genic gluten by way of dietary control.
Preparing for <unk> potential approval is also catalyzing significant organizational change within prevention.
As we transitioned to becoming a progressive highly focused omnichannel commercial vehicle leveraging capabilities and resources across the ecosystem to create penetrate and expand nascent market and cost effectively commercialize.
<unk> innovative immuno modulator therapeutics.
To highly targeted audiences.
Rather than go into greater detail regarding our catalyst demand commercialization plans on today's call.
Lighted to announce that later this month.
We will be conducting a promised commercial launch investor event.
On Thursday May 19 prevention, Chief commercial officer, Jason Hoyt and his commercial leadership team.
We will be sharing with you our deep understanding of the critical aspects of the at risk <unk> target market and patient journey.
Specific agenda items, Jason and his team intend to cover this event include the evolution and future of patient screening.
Our extensive market research, which now includes in excess of 1300 respondents across multiple target audiences.
Our go to market strategy.
Force deployment payer research, our supply chain and distribution model patient services and support.
As well as a well qualified and well prepared medical affairs infrastructure and team.
The potential approval of tablet demand just over one quarter from that would also be an important financial catalyst for prevention.
Before handing over today's call to theory to discuss our quarter, one results and future financing strategy and Optionality.
I want to acknowledge his leadership.
The hard work and expertise of his finance function and.
And the professionalism and dedication of the rest of the prevention team with a disciplined manner in which they have managed our business operations throughout the first quarter of 2022.
As Terry will explain our cash based operating expenses were well within guidance and we closed the quarter with a cash balance in excess of $113 million.
Sufficient to take us beyond the potential Pep lithium app launch and into next year.
Despite the worldwide macroeconomic challenges we are all witnessing.
Theory over to you.
Thank you Ashley.
Before I begin discussing the financials for the quarter I would encourage you to read our 10-Q that was filed today.
The 10-Q includes our financial statements risk factors as well as management's discussion and analysis of our financial condition.
I would also like to call your attention to the earnings press release, which was issued prior to this call.
Let me start with our current cash position and cash projection.
As Ashley indicated as of March 31, 2022, our cash cash equivalence and marketable securities position was $113 4 million.
Our cash based operating expenses for the first quarter ended March 31, 2022 was $26 2 million.
Aligned with our previously communicated guidance.
We expect our cash based operating expenses to be between $29 $33 million in the second quarter of 2022.
Reflected an increase in launch readiness activities as we prepare for the potential FDA approval of the cleanup in Q3 2022.
At the same time, we will continue to prudently allocate our expenses.
Based on our current business plan, we believe that our cash cash equivalents and marketable securities on hand as of March 31 2022.
Are sufficient to meet our operating requirements into the first quarter of 2023.
If the depletion liabilities approved.
Factors that could impact our cash runway includes but are not limited to changes to estimated cost of commercialization and potential milestone payments that may be triggered under our current agreements including with Macrogenics.
Despite the challenging financial markets, we believe our momentum with the potential approval of <unk>. In Q3, 2022 provides us with optionality to raise capital.
We will continue to be both strategic and opportunistic when evaluating potential financing alternatives.
We will provide updates on our cash based expenses and the runway as we progress towards the potential regulatory approval and commercial launch of the accretion math.
And position ourselves for long term success.
From a P&L perspective, we generated a net loss for the first quarter of 2022 of $22 million.
Or <unk> 35 per basic and diluted share compared to a net loss of $32 4 million or.
<unk> 52 per basic and diluted share for the first quarter of 2021.
The decrease in net loss compared to the first quarter of 2021 is attributable to a $7 1 million income tax benefit the company recognized during the period.
And the $2 $3 million decrease in research and development costs, primarily driven by decreased costs for the protect trial as target enrollment was reached in August 2021, as well as lower costs for the manufacturing and our regulatory activities with the cleaning up compared to the prior year.
Our first quarter net loss included $3 3 million of noncash stock based compensation.
Also during the first quarter, we recognized zero point $6 million of collaboration revenue under our license agreement with <unk>.
From a cash standpoint, we received $1 5 million in research development and manufacturing, calling from what only in this quarter, which is recorded in deferred revenue.
With that update I will now turn the call back over to Ashley.
Thank you Terry.
We believe we are well on our way to Catalyzing, a fundamental paradigm shift in the approach to managing serious life, threatening and debilitating autoimmunity.
Our conceptual platform of intercepting and delaying the progression of disease before it's too late.
Other than treating advanced stage tissue damage and symptoms chronically for a lifetime.
Offers game changing hope to the more than 23 million patients in just the U S alone affected by auto immune disease, along with their families and caregivers.
Doing so would allow them to focus on maximizing their true potential.
And living their lives to the fullest.
In turn providing them with greater opportunity to positively change the world for the rest of us.
With that operator wed.
We'd like to take any questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing Nicky to withdraw from the question queue. Please press Star then two.
So first question is from Gregory <unk> of RBC capital markets. Please go ahead.
Hey, good morning, Ashley and team and congrats on the progress and thanks for taking my questions.
Actually maybe two questions for me then I'll just fire off now just on the the commercial updates and BNP investor event coming up I'm. Just curious if you could provide just a little tease on where you and Jason and the team really see the greatest areas of focus across the stakeholders that need.
<unk> certainly addressing there with the go to market strategy.
So just curious about the current state of the awareness of <unk> and the provider and prescriber community and maybe just a baseline understanding activated or otherwise.
Where that stands and what work you see ahead in order to try to correct and prompt those targets. There and then my second question actually just related to what you interior.
Discussed around the cash and the runway maybe if it's possible to provide us some scenarios around.
Where you see the spend and resource requirements being based on the potential outcomes of not just the the FDA decision coming up but also as the rest of your pipeline and priorities mature. Thank you very much.
Good morning, Greg. Thank you for your question, so whilst theories preparing to.
The second question I'm going to ask Jason if he.
Has the Ts for Greg.
Greg and the rest of our investors regarding the upcoming.
Commercial event.
Perhaps some comments about awareness.
Yeah, absolutely. Thanks for the question Greg.
For the event, obviously, we're really excited about having a focused event.
On the 19th of May to really just go through a lot more depth than we've been able to provide our plans to launch the closed map, we're going to get into.
A more in depth look at the insights that we've gleaned over the last two years since the <unk> commercial leadership team came on board at prevention, how those insights have driven our launch strategy, how we've optimized our channel strategy with respect to both consumer and HCP education and information.
We're going to we're going to discuss in a little bit more depth at the insights we have gleaned from payers over the course of the last two years.
As well as our distribution strategy.
Some of the learnings that we've heard from patients and caregivers.
And we're going to discuss them in a lot more depth, our sales force sizing and go to market strategy with respect to our field based employees.
With respect to your awareness not surprisingly, Greg we did at baseline <unk>.
Market Research study and in this quantitative piece of research not surprisingly physicians, we're more aware of daclizumab than they were of prevention buy right as prevention buyers only been around for a number of years to put some ads Ben.
Under study for for decades, now and so there's a pretty high degree of awareness of daclizumab, among both pediatric and adult endocrinologists, and we'll get into a little bit more of that during a commercial event a couple of weeks.
Thanks Jay.
Jason So.
Theory, I know, we've been working very hard on ensuring that there is optionality, especially given the volatility of the markets do you want to talk about.
Some of the scenarios.
Great.
Very good thanks, Gregg for the question so I'll just.
First of all on the spending.
Mentioned in.
Q1, 2022 guidance is an indication of the ramp up of spend on.
Hello trading activities with 2930 $3 million versus $26 2 million cash based.
Operating expenses in the first quarter. So from a spend standpoint, we will continue to assess based on our regulatory progress on label negotiations and BLA approval, we've been prudently gating our spend as you know and we will continue to do so and we will also evaluate this based on our on our cash runway now.
When it comes to financing.
It was mentioning.
Financial markets have been challenging, but we think we have significant momentum.
With the potential approval of <unk> in Q3, 2022, and we tend to be opportunistic about all the available options whether.
<unk> equity offerings private placement debt roll to you with strategic transaction everything is on the table and we'll make our.
Our decision based on what is in the best interest of our company.
And our shareholders.
I'll add to that we as you know we have an ATM $450 million of common stock the.
<unk> raised year to date as per the 10-Q.
$4 2 million and we also.
We acknowledge that the regulatory progress has re energized on strategic partnership discussions, which could be a source of non dilutive financing.
That's great. Thank you very much guys.
The next question is from Thomas Smith of SBB Securities. Please go ahead.
Okay.
Hey, guys. Good morning, Thanks for taking the questions.
Congrats on the progress.
Really looking forward to the commercial and then on the 19th.
Just on the <unk> BLA and the regulatory review.
Would it be possible to provide any additional color on.
How the regulatory review is progressing here because the FDA provided any feedback on our proposed dosing regimen.
Or any indication.
That they would be willing to engage in in labeling discussions at this point.
Thanks for the question Tom So to date, we've had the information request very straightforward.
And we immediately provided the agency.
With guidance as to where they can find the information.
In the BLA Resubmission.
We.
We don't really expect that to be.
Labeling discussions entered into in earnest until probably.
Six to eight weeks out from the anticipated action date, that's usually the that's usually the window.
Yeah.
Okay. That's great. Thanks, Ashley and then.
Yes, perhaps a follow up to I mean is there an expectation for a formal mid cycle review meeting with his BLA Resubmission and then I guess, if so has that been has that been scheduled.
Yes.
Unlike a <unk>.
Original BLA. So if you remember last year.
When we had noticed that the BLA has been filed after our submission.
Agency provided us immediately with a mid cycle review date of late cycle review date, and the date of the AD com.
This is a resubmission in response to <unk> and <unk>.
And so the OS formalities.
Not provided.
Okay understood and then just.
Maybe a question then again looking forward to the the commercial event here, but I guess, maybe one for Jason just in terms of a sales force hiring if you could just remind us I guess, where you are in terms of.
Hiring.
Commercial leadership here and then ultimately.
I think you've kind of previously stated that.
The labeling discussions could be a little bit of a gating factor in terms of more fully building out.
The sales force, but if you could just remind us I guess exactly where you are in terms of.
Building out the commercial force here.
Yes, Thanks, Tom So Jason.
Can do that I, just want to say in general that yes, we are.
Very thoughtful in how we get this in.
Move forward, especially in the current environment.
We have a an amazing leadership team in place.
With Jason that is able to do a great deal in preparation.
And be ready.
To try to align.
Any significant.
The increase in organizational.
<unk> organizational size and spend.
Around that approval anticipated or potential approval date, so Jason do you want to give a little bit more color on that.
Yeah sure. Thanks for the question Tom.
So our intent right now so as our foundation, we have mentioned before that we deployed a pilot team in the field about a year ago.
And they've done really amazing work and engaging with health care providers local advocacy.
Centres of excellence et cetera.
It's a modest force out there really targeting profiling of key accounts and just disease State education.
Our intent would be to Rick.
Accrued over the course of the next couple of months and have contingent offers that would be based on approval at this point, obviously, if we see an opportunity to accelerate that.
I would consider it but.
Our base case right now is that we would offer have contingent offers that wed go live at the time, we announce an approval.
Okay got it.
Thanks, guys I appreciate you taking the questions.
Thank you Tom.
Again, if you have a question. Please press Star then one the next question is from David Hawaiian.
<unk>. Please go ahead.
Alright, thanks for the update and taking my question.
So actually you you talk a little bit about the potential opportunities post market for expansion.
Into younger population and also looking at re dosing of patients can you elaborate a little bit on the efforts that you might undertake.
To pursue those procedures opportunities should capitalize about be approved and then in terms of kind of time frame, how you're thinking about.
Pursuing that.
Good morning, David. Thank you for the question, so I'm going to ask from Cisco to provide some more details, but yes, I think the very first priority is the under eight.
We know that.
Disease type one diabetes.
Immunity.
The onset is it.
Tends to be more aggressive in the younger population.
And of course, we are limited by the eight years enrollment criteria that was used in the <unk> study so we want to.
Reach.
The the population or populations that can benefit most from this and provided the FDA with the data to expand the labeling accordingly.
And then Francisco can perhaps also talk about another.
Another high priority for us, which is re dosing because everything that we're working on at the moment is the consequence of a single course of therapy in a TM 10 study and we believe that there is the potential to explore.
The possibility of even better results from re dosing at the right time, we need to generate data to evaluate that as well Francisco.
Yeah. Good morning, David Thank you for the question.
As we said.
And without providing any specific timelines, because we haven't guided to that kind of detail.
Our priorities in the or.
Going below 80 years of age.
Then create dosing, which as he mentioned.
Potentially down by looking at exhausted T cells.
As a biomarker.
To guide the timing of re dosing as you know.
Subjects, who have the greatest expansion.
In exhausted T cells.
Appears to be.
Very long duration responders, we can use those cells to determine when's the best time to dose again thats. The hypothesis. So we will study that post approval.
We will also continue working on combinations.
As you know we have.
A combination of volume right now with Plessey 10 active <unk>.
With excellent phase II data that has changed in the east.
In newly diagnosed patients.
Beta cell transplantation.
As we mentioned we have good data with either transplant and the potential to now move into the islands and stem cell derived beta cell field.
And then non type one diabetes indications.
<unk> and others.
And finally, potentially subcutaneous administration as well so we will plan on stagger and overlap.
These programs post approval.
Okay. Thanks, a lot.
This concludes our question and answer session I would like to turn the conference back over to Ashleigh Palmer for closing remarks.
Thank you Kate so thank you again, everybody for dialing in today for your time and attention. This morning, we are very much looking forward to keeping you updated on our progress throughout 2022, and especially to the upcoming commercial event.
On may 19th.
Have a good day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.