Q1 2022 Salarius Pharmaceuticals Inc Earnings Call
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After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you would.
Require assistance during the conference. Please press Star Zero I would now like to hand, the conference over to your speaker today, Daniel kind of watching.
Good afternoon.
And thank you for joining <unk> Pharmaceuticals, 2022, first quarter financial and corporate results call.
This afternoon, Soliris Pharmaceuticals issued a press release detailing its financial results for the three months ended March 31, 2022, which we encourage listeners to read the press release can be found in the news section of Soliris pharma Dot com.
Before beginning todays call I would like to make the following statement.
Today, we will be making certain forward looking statements about operating metrics future expectations plans events and circumstances, including statements about our strategy future operations, the development and effectiveness of our investigational drug candidates <unk> and SB 306 floor as well as our targeted.
Routine degradation program and expectations regarding our capital allocation and cash resources as well as asking shareholders to vote before or during the 2022 and all stockholders meeting taking place on June 15th 2022.
These statements are based on our current expectations and you should not place undue reliance on these statements.
Actual results may differ materially due to our risks and uncertainties, including those detailed in the risk factors section of Soliris Pharmaceuticals annual report on Form 10-K for the year ended 2021 and subsequent quarterly reports on Form 10-Q, which have been filed with the SEC as well as other file is unique with the SEC from time to time.
Soliris pharmaceuticals disclaims any obligation to update information contained in these forward looking statements, whether as a result of new information future events or otherwise.
With us on today's call is David Arthur Director and CEO of Soliris Pharmaceuticals, who will provide an update on soliris as corporate and clinical achievements during the first quarter and its vision for the future and Mark Rosenblum CFO , who will review <unk> first quarter financial results. David. Please go ahead.
Thank you Daniel and thank you to everyone dialing into our conference call today, particularly all of you joining us for the first time.
The first quarter of 2022 and recent weeks have once again been an ex another exciting time for scenarios. The highlight of the quarter was our acquisition of an intellectual property portfolio from <unk> LLC.
Led by the drug candidate SP $31 64.
$31 64, now forms the basis of our targeted protein degradation for TPB drug development program.
And although we spoke recently on March 10th during our 2021 year end earnings call.
We already have news on advancing our $31 64 drug development program, which I'll discuss in a moment.
Our entry into protein degradation represents a significant expansion of our internal drug development pipeline and we believe positions hilarious for significant future growth TBD.
TBD is a fast growing field of cancer drug research with our commercial market potential in the billions of dollars as evidenced by drugs like Revlimid and <unk> that in 2021 generated global sales of over $16 billion as.
Ported by Bristol Myers Squibb in their fourth quarter and full year financial results for 2021.
In addition, the potential market for PPD is attracting interest from some of the world's largest drugmakers, including Bristol Myers Squibb, Amgen, Pfizer and Novartis and others, who have recently announced deals with biotechnology companies that are focused on targeted protein degradation.
We believe that the investment by pharma and protein degradation suggests the potential for protein degradation to be transformative within the health care space.
Coupled with our existing clinical development program for <unk>, and oral reversible <unk> inhibitor and our most advanced investigational cancer drug candidate Solarium is now pursuing multiple drug development programs built around two exciting approaches to targeted cancer drug development.
Protein inhibition and protein degradation.
We are optimistic of the future given the multiple milestones we expect to soon achieve and the potential to deliver value inflection points for our shareholders.
As CEO and the shareholder in the company I'm as excited about our future as I have been since arriving at Polaris.
Let me tell you about what we see ahead for the future of Soliris and I'd like to start the <unk>.
As you know several of them that is an oral reversible protein inhibitor designed to target LSD. One an enzyme that is over expressed in many types of cancer and an enzyme that is a promising target for anticancer drug therapies.
And as you also know second them Stat is currently the subject of two separate phase one slash two clinical trials. The first trial is exploring its potential in sarcomas, including one treatment arm exploring <unk> in combination with chemotherapy for patients with Ewing sarcoma.
The second trial is an investigator initiated trial sponsored by MD Anderson cancer Center in Houston, exploring <unk> potential in patients with too aggressive forms of hematologic or blood cancers.
<unk> continues to advance in clinical development with patients enrolling across both clinical trials and as we have discussed previously we are looking forward to providing updates on these studies, including interim clinical data later this year.
Now, let's discuss SP, $31 64 and targeted protein degradation.
Targeted protein degradation involves harnessing the body's natural degradation system to selectively target and eliminate disease, causing proteins and by doing so stop the development and progression of cancer.
This field of research has helped to transform the treatment of cancer with products, such as Revlimid and Palm last as I mentioned earlier.
Both drugs are protein Degraders indicated for the treatment of blood malignancies, such as multiple myeloma and non Hodgkin's lymphoma.
We believe.
That the therapeutic success of these early generations of protein Degraders represents significant potential for protein degradation to enable the development of medicines that can achieve a therapeutic effect with small quantities of drug.
But perhaps the most exciting part about targeted protein degradation is the potential to develop medicines that target cancer promoting proteins that have historically been considered undruggable.
We have observed the broader biopharmaceutical industry's interest in targeted protein degradation to a number of transactions over the past two years, we believe and $31 64, and we believe in its potential to be best in class.
<unk> thousand 164 is an oral small molecule <unk> binding protein degrader referred to as a molecular glue.
It is designed to bring disease, causing proteins.
In the proximity with an enzyme that induces.
The disease, causing proteins elimination or degradation.
What we think makes 31 64 unique is that is that is the preferred path.
<unk> preferred enantiomer of the widely studied drug <unk> with the potential for increased efficacy and improved safety.
Based on published reports of <unk> or Celgene Cc 122 has been studied in more than 400 patients across 10 clinical trials, demonstrating a promising safety profile, good pharmacokinetics and importantly.
Anti tumor activity across several cancer types with what we believe is strong data in lymphomas.
This is important because 31 64, though derived from <unk>.
Is actually a new molecular entity with unique and improved characteristics and its own composition of matter patent.
In fact in preclinical and in preclinical animal study where results were published in the proceedings of the National Academy of Sciences, $31 64 showed improved efficacy and increased anti tumor activity in multiple myeloma compared <unk>.
Soliris is focused on advancing 31 64 into the clinic as quickly as possible as a potential treatment for hematologic cancers and solid tumors and we are pleased to announce in fact, we announced yesterday afternoon that we have completed the pre investigational new drug or pre IMD meeting process.
With the FDA.
The pre IMD meeting process allows companies to submit drug development questions to the FDA and received guidance to inform studies and development activities to prepare an IND application.
Soliris is completed this important drug development staff and obtained valuable FDA input that provided clarity on preclinical clinical and other regulatory matters for preparing and submitting an IND.
Solaris is actively implementing IND, enabling studies and other development activities to support a planned IND submission in the first half of 2023.
Accordingly, we plan to provide preclinical data updates later this year.
The progress we have seen so far in our $31 64 development program gives us confidence that we will be able to initiate our first 31 64 clinical trial in 2023 next year.
As I mentioned earlier and hopefully as you can now appreciate it's been another exciting quarter in recent weeks here Soliris.
And our annual stockholder meetings next month, but before I discuss our upcoming stockholder meeting I would like to ask Mark Rosenblum, Chief Financial officer to provide details on our first quarter financial results Mark.
Thank you David.
For the three months period ended March 31, 2022, Solaris reported a net loss of $6 1 million.
Or <unk> 13 per basic and diluted share.
Compared to a net loss of one 9 million or six per basic and diluted share.
For the year ago quarter.
The loss for the three months period ended March 31, 2022 increased $4 2 million compared to the same time span last year, primarily due to the company, having higher overall costs and the absence of grant revenue in the current period.
The company closed the quarter with a cash position of $24 2 million.
The statement of cash flows indicates cash.
Cash used for operating at cash used for operating activities. During the three months period ended March 2022 totaled $3 5 million compared.
Compared to $2 seven in the prior year, reflecting increased personnel and expansion of clinical trial sites.
Investing activities on the statement of cash flow reflects the cash portion of the targeted protein degradation technology that David just spoke about.
At $1.5 million of cash expended.
Statement of operations research and development costs increased by approximately $2 $7 million year over year, resulting again from higher overall personnel costs and clinical trial expenditures more than offsetting lower drug manufacturing and drug development costs.
Year over year general and administrative costs increased by approximately $300000, resulting from higher again higher overall personnel costs, including noncash charges.
Resulting from stock, resulting from stock based compensation.
On March 31, 2022, our balance sheet states that the company again at $24 $2 million in cash and cash equivalents compared to $36 6 million for the same date in 2021.
Recall the March 'twenty, one the March 2021 amount reflects a $27 million in proceeds from our capital raised during that month in 2021.
We believe soliris.
Has the financial resources to advance our clinical and operational programs into 2023.
With that I would like to return the call to David.
Thank you Mark as we discussed earlier in the call. This is a year of significant potential for soliris with multiple value inflection points on the horizon.
And we believe I believe the company is well positioned to build value for shareholders.
On June 15th Soliris will hold its 2022 annual meeting of stockholders via a live webcast.
All shareholders, who own stock in <unk> as of the end of business on Tuesday April 26 of this year.
Are eligible to vote on several issues on the meeting agenda information on how to participate in the meeting and how to vote your shares as available in the proxy statement filed recently with the SEC.
And in proxy materials, all shareholders of record.
At the end of the day Tuesday April 26 should receive by mail or E mail.
In many cases shareholders can vote online directly through their brokerage accounts by logging into their account searching for proxy voting information and following the instructions there.
The proxy statement and all other SEC filings from Soliris can be found in the investors section of our website.
And at SEC Dot Gov.
No matter, how many shares you hold.
Even if you own what you feel is a small number of shares your vote is important and we need you to vote, we're asking you to vote.
For shareholders with brokerage accounts at TD, Ameritrade, Charles Schwab and Robin Hood.
Please vote your shares through your brokerage website.
Or through the proxy materials, you should receive from Soliris, we have been informed that these brokerage firms will not both the stock that you own on your behalf at annual shareholder meetings.
This means your votes will only be counted if you take the few minutes needed to vote. Your shares remember every vote counts.
As I said earlier today. These are exciting times for Soliris and we're looking forward to building upon our current momentum as we continue into the second half of 2022.
I would now like to take questions. Joining me for the Q&A portion of this call is Mark Rosenblum, Chief Financial Officer, Dr. <unk> Mirza Senior Vice President of clinical development and Dr. Daniela Santee Esteban director of the targeted protein degradation program with that I will now open the call to your questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from other Deamer from Ladenburg.
Hello can you hear us.
Hello can you hear me.
Yes, we cannot hope good to hear from you.
Likewise, thank you very much for taking my questions. My first question will be on mute.
Hi Kumar study if you can.
Can you tell us on the enrollment status and when do you plan to disclose the next data Readouts on quickly the MOSFET sarcoma study.
As we mentioned.
In <unk>, <unk> and a number of releases and discussions it's our intention to release data mid year.
So we are on track to release information.
Shortly in the next few months definitely in the second half of 2022.
Enrollment is moving along in fact enrollment is moving along in both studies both sarcoma.
And in the investigator initiated trial with MD, Anderson, which as you know.
Is enrolling patients in two blood cancers.
S&P ml, which are precursors to AML a much larger indication. So we're pleased with where enrollment is and we feel we're on track to meet our earlier commitments to release interim data in the second half of this year.
That's great to know.
Data determination are you looking for a scientific conference.
Are there any targeted conference does that mean, we should be paying attention sale.
Well I think it's going to depend on when the data is available.
And when we are able to submit it to the conferences as you know many of these conferences have significant lead times.
But.
If we if we are seeing positive results.
I would feel we have an obligation to at least make the headline information available as we're treating patients.
Who in most cases have failed standard of care therapy and are actively advancing in their cancer and its circlet them stat either in the hematologic cancer study or the sarcoma study is showing a benefit patients need to know that so.
So they can they can look at both the sarcoma study in hematologic cancer study.
As options for their treatment. So I think there are two parts to answering your question. One is perhaps a high level dissemination through a press release and in the more detailed information through a subsequent Congress.
That sounds good March 31.
For our program.
What are the key highlights from the SBA.
The meeting discussion and also the second part of the question is what stage of pre IMD work are you currently at.
Well, let me take the first part of the question and then I will ask.
Dr <unk> bond to fill and fill any gaps that are appropriate at this time.
As you can imagine.
We are in a what we think is a very good position with $31 64, given that it is the preferred.
<unk> for the preferred in an <unk> of <unk>. That's been studied in over 400 patients across 10 clinical trials.
And because of that and the tremendous number of published studies, both clinically and pre clinically and the patents that have been filed on <unk>, we have a wealth of information to inform our.
Clinical development and even though we are the preferred <unk>, we are a unique chemical compound with our own characteristics and our own fresh.
Fresh our new and our composition of matter patent.
So as Youre aware you go to the FDA and you seek advice on key questions relating to toxicology studies specifications for <unk>.
Chemistry control and manufacturing clinic.
Clinical trial design.
And any other topics that you think may be important and while I'm not going to go with get into details on the actual responses. What I can share with you is that we felt all of the answers that we received from the FDA, where either as expected or positive and we are in line with.
The development plans that we had put forth. So the FDA response did not impact our timelines at all.
That's now great.
To your question where are we in the development timeline.
As you know we purchased.
Purchased the intellectual property portfolio in January where with with $31 64, as the lead asset.
<unk> been very fortunate as I mentioned on having the preferred half are the preferred <unk>. We had the clinical candidate. So we immediately began work on all of the activities that makeup standard drug development. Once you have a clinical clinical candidate or a lead candidate.
And that is <unk>.
Working on your GMP manufacturing.
These drug substance and drug product designing and contracting and then working on implementing the toxicology studies and.
The.
Myriad of additional studies that all need to be executed in order to submit an IND application. So we are well into the IND enabling process.
Thank you for that update my last question, if I may on the financial side looking at the R&D expenses that we do notice the significant increase compared to the previous quarter. If you could elaborate more on that Mark what is the main driver is it <unk>.
Are there any anything else.
Yes.
Well.
The answer is 31 64 is.
The largest increase when you look at the 10-Q you will see.
Our R&D expenses detailed in.
And a pretty significant way.
The targeted protein degradation program was a little less than $2 million like 1 million 988, and as you May know, it's called in process research and development and its expense thats not on the ballot is not on the balance sheet as an asset.
In process R&D expense so thats.
That's the first reason.
Additionally, we have increased our personnel and R&D.
Just two to manage our increased clinical trial sites and and.
And when you really get into the detail.
Dr. Seth Yes, the bond for instance, just now in the R&D side of the house, where she was shared.
Whereas you watched wear two hats half admin and half R&D. So yes. It is it is largely the 31 64 effort and clinical trial sites.
Very helpful. Much appreciate you taking my questions. Thank you.
Sure.
Our next question comes from Hunter Diamond with Diamond equity.
Hi, everyone I hope everyone's doing well.
My only question is around hiring and recruiting so I just want to get more color on how you are finding hiring protein degradation professionals epigenetic experienced professionals and how you're weighing that versus a capital light model, if you're finding it easy to hire people and how youre thinking about this in the next couple of years.
<unk>.
Well Hunter, it's good to hear from you.
The one of the ways to think about hilarious is.
We try and run an efficient operation by primarily acting as general contractors, if you will.
We try and hire very capable experienced and talented individuals.
Do some development work in house, we have a laboratory at J labs here at TMC.
But to a large extent.
Our preclinical work.
<unk>.
Manufacturing is outsourced and as you know we don't.
We don't spend we are not a basic discovery operation.
Our sweet spot is identifying clinical.
Drugs that are ready to begin the IND, enabling process lead candidates clinical candidates and taking them through phase one and two so along those lines. We don't envision significant head count increases. However, we will be looking to ensure that we have the right resources.
<unk> to manage and implement our clinical trials across both <unk> and.
31, 64, so if I look at where the head count growth might come from I think it's primarily going to be in the area of supporting drug development and advancing these drugs into the clinic to generate data that I think is is going to be critical not only for patients, but also to drive value inflection point.
Did that answer your question.
No absolutely. It was just the general sort of question because as you know wages have been increasing and in certain industries.
Even I've seen it in large pharma small biotech theres been salary increases and a lot of competition for talent. So it was a general more high level on.
How the company is hiring and it's affecting any hiring processes.
And as you know.
Hi.
The war for talent.
Finding the talent that you need to continuing to move your company forward is.
A never ending battle.
And we want to make sure that we're paying competitive salaries and we've taken.
Competitive compensation in total and we've taken measures to ensure that we're getting.
Advice from the professionals in the industry to ensure that we are doing that I mean, one of the things that.
I have to be responsible for CSO Ceos, ensuring that we're bringing the right talent on board training that talent motivating that talent and retaining that talent to make sure that we can continue to advance.
Our drugs through the development cycles.
So I think it's going to be inactive.
Inactive area.
As we all know it's been a tough time for biotech right now and there are there are always people out there talented people out there ready to work on promising projects and one of the things we've learned from Covid as you don't always have to live in the same city.
Is where the company is located so I think it's it's always a tough area, but I think theres a way through.
Absolutely and I think that's a great use of shareholder money is also not having expansive office spaces like Merck or something withhold.
Sensors and massive facilities right, because it's not necessarily driving shareholder value. So I think the model makes a lot of sense and again congratulations on the results and thanks for taking my question.
No problem anything else you'd like to ask.
I think thats it on my end, yes, it was very clear presentation.
Yes.
Alright, well. Thank you it's always good to talk.
You as well.
I'm showing no further questions at this time I would now like to turn the conference back to David Arthur Director and Chief Executive Officer.
Thank you.
As you've heard from today's discussion. This is a year marked by big expectations, and I think matching opportunities to build shareholder value. There's a lot of activity coming in the second half of this year.
I look forward to working with my management team and our board of directors to execute a business and clinical strategy that has the potential to build soliris pharmaceuticals into.
The anti cancer drug development powerhouse, we all know we can become and we all envision.
Supporting all of this is the dedication of our employees and the support of our stakeholders and on behalf of my colleagues. It's hilarious in the board of directors I want to thank everyone for your time and attention today.
Be safe and take care. Thank you.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect.
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