Q1 2022 PolarityTE Inc Earnings Call
Ladies and gentlemen, and you are currently on hold for the <unk> T E first quarter 2022 business update we're starting shortly thank you for your patience. Please remain on line.
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And ladies and gentlemen, please standby good day and welcome to the polarity T. He first quarter 2022 business update conference call.
This conference is being recorded and now at this time I would like to turn the conference over to Cameron whole Collier. Please go ahead.
Thank you operator, good morning, and thank you for joining polarity te's call to discuss first quarter 2022 results.
Qoyllur General counsel on the call today are members of the <unk>.
Decorative tempered Hague, Chief Executive Officer, 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 that 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.
But not limited to those detailed under the caption risk factors that are described in our annual report on Form 10-K for the year ended December 31, 2021 and subsequent reports filed with the SEC.
Any forward looking statements made on this call speak only as of today's date.
Monday may 16th 20 constitute.
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 to participants that the call is being recorded a.
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 clarity tea and any redistribution retransmission or rebroadcast of the call in any form without polarity. He's expressed written consent is strictly prohibited.
I would now like turn the call over to Richard Hague CEO .
Thanks, Cameron and good morning, and welcome everyone as we announced via a press release on Friday.
Pleased to report that the FDA has granted skin to a regenerative medicine advanced therapy designation.
This arm that designation is an incredible accomplishment for our company and it comes on the heels of the first patient being enrolled in our phase III pivotal study, a skinny Wagner to diabetic foot ulcers less than a month ago.
I'll elaborate on the importance of the arm out and the status of our ongoing pivotal trial. After we discuss the quarter's financials, but needless to say, we're thrilled with the progress that we've made over the last several months.
I would like to turn the call over to Jay Peterson our CFO .
Thank you Richard and good morning, everyone.
Operating costs and expenses decreased one 6 million or 15% for the three months period ended March 31 2020.
Compared to the three months period ended March 31st 2021.
For the three months period ended March 31, 2022 cash used in operating activities was 6.0 million or an average of two point, if you're a million per mark.
The $6 6 million of cash used in operating activities or an average of $2 2 million per month for the three months period ended March 31st 2021.
As of March 31, 2022, we had $18 7 million in cash and cash equivalent and.
And working capital of approximately $17 2 million.
We believe cash and cash equivalents on our balance sheet together with the net proceeds of the IBEX property sale will fund our business activities into the fourth quarter of 2022.
Our goal continues to be maintaining a base operational cash burn, which excludes costs associated with clinical trials and related activities below $2 million per month on average.
I'd now like to turn the call back over to Richard for additional operational remarks.
Thanks Jake.
So I'd like to discuss three key items in more detail Firstly, our met designation what it is how we got it and what we believe it means for <unk> T in skin T moving forward.
In our phase III pivotal study in diffuse and third the continued advancement of our intellectual property estate.
Some of you may know the arm that designation framework was established under the 20 <unk> century Cures Act.
It is a dedicated program designed to expedite the development and review processes.
Missing regenerative medicine products.
These can include gene therapies tissue engineered therapies, and human cell and tissue therapies.
Shortly however products that are regulated solely under section 361 of the public Health Service Act are not eligible for our REIT designation.
To be eligible for arm at a sponsor must submit an application and demonstrate to FDA that their product satisfies three criteria.
First that the product is a regenerative medicine therapy in the case of skins, he a human cell and tissue therapy.
Second that the product is intended to treat a lot of fly reverse or cure, a serious or life threatening disease or condition.
And third that the preliminary clinical evidence indicates that the therapy has the potential to address unmet medical needs such disease or condition.
It is clear that FDA agrees that the quantic cutaneous ulcers and D. A few specifically are a serious or life threatening condition to underscore. This we think it's important to highlight some key statistics related to defuse.
Do you view as the most common chronic wound is afoot with an annual incidence of 1.1 to three point million in the U S alone.
Lots of diabetes is roughly 37 million people in the U S or 11, 3% of the population.
The lifetime risk of someone with diabetes developing foot ulcers as high as 34% leading to 20% of all diabetes related admissions.
When courage Mad when current management strategies fail to heal D F U or when they are left untreated. It ulcers typically progress leading to increased risk of mortality and pyramid a day to day functioning and morbidity that often includes amputation.
Presence of Comorbidities length of a time.
One size depth and presence of exposed structures are all correlated to decreased likelihood of healing and increased risk of critical complications such as infection an amputation.
Unfortunately more than a half of D. F you become infected and 17% to 20% of these result in some level of amputation researched.
Researchers found that between 2010 and 2015, even after controlling for the prevalence increase in diabetes.
<unk> adjusted rates for diabetes related non traumatic lower extremity amputations increased by 50%.
Both minor and major applications increased during this time, which is a concerning finding is amputation is accepted as an important index for successful care.
Limb loss has a more substantial negative impact on the quality of life than any other complication of diabetes. In addition to their impact on the quality of life. Both debut in lower extremity amputation appear to be more than just a marker of poor health. They are independent risk factors associated with premature deaths.
Five year mortality rate for patients with a D F U a minor amputation, and a major amputation or astonishing, 30%, 46% and 57% respectively.
By comparison, the five year pulled mortality rate for all cause cancer, it's 31%.
Regarding fda's third arm that criteria related to preliminary clinical evidence we have long known that the clinical data we generated while skins. He was marketed as a 361 H T. T P add value not only to the patients whose lives were approved but also through our understanding of how the product works.
And different loan types.
Well, our skin T E development program remains focused on product cutaneous ulcers, such as the white or gray to defuse and our first pivotal study under I D. E. R. Mat submission also allowed us to show F. D. A all of the clinical data that has been published to date.
And there are bad submission. We included data from completed and ongoing clinical studies evaluating safety and efficacy of skin C E multiple patient populations, including three completed pilots pilot.
Pilot studies and D. A few Neil you and Burns and two randomized controlled trials in D. F U N V a U.
In addition to the formal clinical studies compelling clinical evidence was provider from 8-K series across a wider array of born types whats included trauma pressure and burn wounds.
I would like to emphasize that all of these data are in the public domain and are excited at our investor presentation. We would strongly encourage those interested in learning more about skin T. They read the peer review publications that report these impressive data.
Overall, we are very excited about what the arb that designation may mean for our skin to your development program.
Similar to breakthrough therapy designation arm that provides the benefits of intensive FDA guidance on efficient drug development, including the ability for early interactions with the F. D. A.
To discuss potential ways to support accelerated approval and satisfy post approval requirements potential priority review of the biologics licensing application and other opportunities to expedite development and review.
And its corresponding scrubbing, our math the F D. A offered us the opportunity to request a multi disciplinary comprehensive discussion between polarity tea in the F. D. A regarding this gets to your development program, including planned clinical trials and plans for expediting the manufacturing development strategy.
We will be making this request shortly and are eager to work closely with the agency to identify potential means to accelerate and broaden our development program.
I'd now like to provide an update on our first pivotal study being conducted under the open Iot or cover diffuse trial.
Two patients have now been enrolled and additional patients are being screened at three currently active sites.
Importantly, last week, we hosted a meeting with physicians and coordinators from 15 sites that will now be qualified to begin identifying patients for our study.
Personally had the opportunity to interact with many of the attendees at this meeting and the enthusiasm for having access to skin T to treat patients under this study was incredibly high.
As a result over the coming weeks, we expect enrollment to steadily increase.
Finally, I'd like to provide a brief update on our intellectual property we.
We received additional patent issuances and allowances.
A number of a lot of granted utility patents worldwide.
18 with for the U S in 2014 internationally.
We continue to pursue additional patent applications in the U S and abroad related to our regenerative technologies, including skin team.
In terms of recent developments the U S. P. T O notified us that an additional U S. Patent application will issue on May 24, and the claims to be issued compositions that relate to the company's N. P. F. You technology in combination with a car protected.
We also received notification of issuance allowance or patent grants or patent offices in Israel Zealand, Vietnam and close to recap.
To close the call I'd like to reiterate my thanks to our team who accomplished a tremendous amount in the first several months of 'twenty to 'twenty two.
We look forward to continued engagement with FDA I will share additional information regarding our progress in due course.
Finally, I'd like to emphasize that with these recent accomplishments. We believe the polarity T is well positioned for continued execution of our Delaware development plan for skin T and to explore opportunities for strategic partnerships or transactions.
Thank you I'd now like to open the call for Q&A.
Ladies and gentlemen, if you would like to ask a question over the phone line. Please press star one at this time.
You keep in mind, if you're using a speaker phone make sure. Your mute function is released so that she could reach our equipment once again star one for questions.
And as a reminder, if voice prompt on your phone line won't make hit that you would've open line just eat your name before posing a question.
We'll hear first from.
Hi, This is Christian.
Thanks for taking the questions and congrats on the recent designation wanted to his first.
Could talk a little bit more specifically about some of the topics you plan on discussing with the agency as a result.
I think in the press release, you said manufacturing an expedited ways of getting the drug approved so can you comment a little bit more specifically on that.
Yeah, Hi, Christian and thanks for the question first off the that's the first topic that we will be discussing with them is our second trial design. So we had mentioned previously we've been working with FDA to get clarity around that we actually had requested a type C meeting and as a result of the arm at being.
Granted to us FDA asked.
<unk> asked us to actually cancel that meeting and reschedule it under the they are met so we're gonna request a type b meeting.
Shortly and in that discussion will absolutely be talking about the trial design for.
Our second study in order to accelerate the a D. A.
The approval or the generation of data I should say for for this per our current indication of chronic cutaneous ulcers. Additionally to your to your point about manufacturing.
Obviously, we want to make sure that we have every I dotted and Ts crossed when it comes to our manufacturing capabilities and our ability to to achieve results that are in line with the fda's expectations. So as part of those discussions of course, we'll be talking to FDA about the status of our ongoing.
Our transition to GMP and our ability to ensure that we are in line and on target with Fda's expectations and obviously, if there are ways for us to expedite this process through these discussions with FDA, we'll certainly pursue that.
Okay appreciate that and just from a communication standpoint, what what should we expect are you going to plan on our press release and when you have a meeting scheduled or you know that.
The next update gonna be that the minute it sounds like you're just trying to figure out how.
How you guys plan on communicating when or if the meeting takes place.
Yeah, It really depends on timing if it aligns with in upcoming earnings calls and certainly we'll use that as a vehicle if not we'll certainly P. R. Any material information that is gathered through the interactions with the FDA if its a standard interaction that is simply a dialog.
To determine you know certain processes that we're gonna follow we wouldnt necessary.
Early share that but certainly as we get clarity around certain specific actions that we plan to take we will most definitely share that publicly.
Okay. Thank you and then final question for me is just on durability and follow up. So obviously you have a very unique back story in terms of utilization.
So just you know curious I understand this new path towards the approval, but have you looked at collecting further follow up data or have you talked about.
Utilize the product both the ones that were in the trial and then both the ones that were kind of these one off.
Utilizations like are you tracking the durability in terms of the follow up or out in skin.
Yeah, that's actually a very a very good question and a timely question. We are actually working to continue to gather data.
Both data that has not yet been published or presented anywhere and other data in terms of as you described.
Continue follow up and durability. So we are working currently on a a publication plan and hope to be able to generate some meaningful data from all the past use of.
Skin T E and a variety of different wont types. One specific area that we are targeting is it is it is a update on pressure injuries. We had a couple of different sites using the product quite a bit and in that particular, one type and we hope to be able to be in a position to.
Get some data published a specific to that so it's a great question and it's something that we consider to be a very unique opportunity for us given our past commercial experience I will say that in talking to the physicians that attended.
Our recent investigators meeting I'd say roughly half of the physicians there had a youth skin T. He previously and as I said the excitement for getting access to the product. Once again under this study was was really really high and.
They all had very very positive things to say about their past experience with the product.
And the patients they are treated so we certainly plan to a defined vehicles for ensuring that debt any data that we can't capture will be will be utilized effectively.
Got it thanks again.
Thank you Christian.
And we'll now move to our next question, we will hear from.
Thanks for the question. This is Carl Byrnes from Northland Capital markets I'm wondering if you could speak to your expectations with respect to your timeline for the phase III <unk> trial, specifically when you might.
Concrete.
Patient enrollment and if there would be interim data and approximately what timeline that would occur as well.
Topline complete top line readout from the study thanks, so much.
Yes, good morning, Carl and thanks for the question. So we've talked previously about timing and you know it's early days, but our internal targets are are tied to our monthly enrollment of roughly anywhere from four.
Four to six patients per month, approximately we are planning to do an interim data readout. So if we were fortunate to stay on track with our target we would expect to have Ah patients.
Half of our patients fully enrolled by roughly around the end of this year early into Q1 of next year, which would given the six month follow up of last patient in would get us sometime in.
Late Q2 early Q3 of next year for the interim data.
Obviously, we're going to do everything we can to accelerate that.
As I said these 15 sites that were part of our investigators meeting were very enthusiastic about enrolling patients. So we'll continue to report back as we as we see enrollment increase and give us a better clarity on.
On the timeline of the targets, but what we believe that sometime as I said Q2 Q3 of next year would be in a position to have the interim data.
I think at this point I'd I'll wait to see how enrollment.
Shapes up in the coming months to make a longer term a statement around the full full data readout.
Great. Thank you very helpful.
And ladies and gentlemen, this will conclude your question and answer session I will turn the call back over to your host for any additional or closing remarks.
Thank you all very much for joining the call today and have a nice day.
With that ladies and gentlemen, this does conclude your conference for today. Thank you for your participation and you may now disconnect.
Okay.
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