Q4 2022 Acasti Pharma Inc Earnings Call

June 21, 2022

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Thank you for your patience the conference will begin momentarily. Please continue to hold.

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Good day and welcome to the a trustee pharma fourth quarter and fiscal year 2022 financial results conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Robert Blum of life and partners. Please go ahead.

Alright, Thank you very much I'm, Jay and welcome to a coffee farmers our fiscal year end 2022 conference call on the call with US. This afternoon is Jan <unk>, President and Chief Executive Officer, Brian <unk>, Chief Financial Officer, and Monique Champagne Vice.

<unk> of clinical affairs. Following management's prepared remarks, there will be a Q&A session should any questions remain after the call. Please don't hesitate to contact me at 60288 to 99700 I'd also like to remind everyone that statements on this conference call that are not.

Not statements of historical or current facts constitute forward looking information within the meaning of the Canadian Securities laws and forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 1995, and the Securities and Exchange Act of 1934 such.

Forward looking statements involve known and unknown risks and uncertainties that could cause the actual results to be materially different from those expressed or implied by such forward looking statements.

In addition to statements, which explicitly describe such risks and uncertainties listeners are urged to consider statements labeled with terms of beliefs expects intends anticipates potential should may will plans continue targeted or other similar.

<unk> to be uncertain and forward looking listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this conference call.

Forward looking statements. During this conference call May include but are not limited to the success and timing of regulatory submissions of the planned phase III study for Gtx, one O four and a coffee as other preclinical and clinical trials regulatory requirements or developments in the outcome of meetings with the FDA changes too.

<unk> clinical trial designs and regulatory pathways legislative regulatory political and economic developments and cost associated with the Coffey as clinical trials. The forward looking statements made during this conference call are expressly qualified in their entirety by this cautionary statement the cautionary note regarding.

Forward looking information section and the risk factors contained in the coffee. The annual report on Form 10-K, which is available on Edgar at Www Dot FCC Dot Gov on SEDAR at Www Dot SEDAR dot com and on the investors section of the coffee website at www.

<unk> got a coffee pharma dot com. In addition, any forward looking statements represent our costs. These views as of today and should not be relied upon as representing our views of any subsequent date coffee undertakes no obligation to update such forward look for such statements to reflect events that occur or.

Chances that exist after the date on which they were made except as required by applicable securities laws I'd now like to turn the call over to Jan <unk>, President Chief Executive Officer, Carlos Your pharma Jan. Please proceed.

Thank you Robert and given that we conducted our last conference call only about a month ago, when we announced the positive results of our PK bridging study for Gtx one of them for we plan to keep today's prepared remarks, covering our fiscal year 2022 rather brief allowing for more time at the end for questions.

Fiscal 'twenty two is a truly transformative year for our coffee, we pivoted as a company and acquired Grace Therapeutics in late August 2021. This acquisition gave us a new mission of re formulating and Repurposing marketed medicines for indications in rare and orphan diseases, where cigna.

If he can unmet medical needs exist. This strategy allows us to proceed at a five O five b, two regulatory pathway, which is potentially a faster lower cost and lower risk approach to getting drugs approved by the FDA. We now have three drug candidates advancing in clinical development and all three have already received.

Orphan drug designation by the FDA, which could granted seven years of market exclusivity in the United States.

We also expanded an already extensive portfolio of approved and pending patents that cover composition of matter and method of use which can extend our market exclusivity to 2036 and beyond.

So let me give you a quick update on the status of our lead drug candidate Gtx, One O four which is a novel formulation of Nimodipine for IV infusion designed specifically for patients with subarachnoid hemorrhage or S. H, which is the condition caused by bleeding on the brain due to a ruptured aneurysm.

And C. H presents a life threatening emergency for the patient and our new proprietary IV drug formulation that addresses a vital need in the critical care market that has seen little innovation over the years.

These patients are so critical that 10% to 15% die before they ever reached a hospital and about one third ultimately do not survive. Another third of these patients require dependent care for the rest of their lives.

The age is estimated to affect about 50000 patients per year in the United States alone and based on our market research. We believe that Gtx one O. Four represents a total available market in the United States of more than $300 million. The current standard of care is an orally administered drug called <unk>, which was approved by the.

The FDA back in 1988, Nimodipine is a powerful calcium channel blocker and it works primarily on the brain to lower the patient's blood pressure by relaxing cerebral blood vessels, thereby increasing blood flow and oxygenation Nimodipine is mandated by the joint Commission that certainty.

U S stroke centers to be administered to all patients with S. H as it's been shown to reduce the incidence of delayed cerebral ischemia and to improve neurological outcomes.

No motor Peanuts available in the U S. Only as an orally administered capsule, which is problematic as many of these S age patients are not conscious or if they are awake. They have a hard time swallowing oral drugs their nursing staff must pull apart the capsule siphon off the drug to be delivered orally to the patient.

And these are gastric tube it goes directly into the stomach as nimodipine can stick to the side of the case, but it's very difficult to control how much drug is actually being delivered and ultimately absorbed this leads to a lot of variability in dosing and the resulting blood pressure the patient.

We believe the Gtx one afford delivered intravenously it could be a major improvement in the standard of care as it more convenient and efficient and precise way to delivery nimodipine directly into the patient's bloodstream in.

On May 18th we held a conference call, where we announced that our Gtx one O. Four PK bridging study successfully met all of its endpoints. The primary objective of the PK study was to evaluate the relative bioavailability of Gtx, one O four delivered intravenously compared to oral nimodipine and how.

The adult male and female subjects, while the secondary objective was to assess its safety and tolerability.

The results showed statistically no difference in maximum and total exposure between IV Gtx, one O four and the oral formulation of Nimodipine and no serious adverse events were observed. This means the gtx one of where it can be centered can be considered essentially bio equivalent to oral nimodipine.

Additionally, the bioavailability of oral Nimodipine capsules was observed to be only 8% compared to Gtx, one O four which when given intravenously is naturally a 100% bio available consequently, less than 110th of the amount of Nimodipine is administered with Gtx one O four two.

<unk> the same blood levels as the oral capsules.

What are the most important findings from this PK study is the plasma concentrations obtained following IV administration of Nimodipine showed significantly less variability between subjects as compared to oral administration.

Let's see inter and intra subject variability with significantly lower for Gtx, one O four as compared with oral Nimodipine. This is important as we believe that because of its better absorption profile and more consistent blood levels Gtx. One O. Four may provide physicians with a more reliable and effective treatment for <unk>.

<unk> with S H.

This is a key advantages we believe gtx one O four could help to reduce the incidence of hypertensive events and raises status, which require immediate and costly intervention and can lead to worse outcomes for the patient. Moreover, it could provide dosing flexibility and a more consistent and convenient route of administration.

<unk> for the significant percentage of patients who present and remain unconscious during their ICU stay following S. H.

Finally, despite the positive impact in the motor Ping has on recovery and an improving neurological outcomes physicians must often discontinue nimodipine treatment, primarily as a result of hypertensive episodes that are difficult to be are difficult to control with the oral administration of the drug.

Such discontinuation of Nimodipine could potentially be avoided by giving the patient Gtx one O four.

Because of its IV administration the rate of infusion can be controlled and May also alleviate the need for careful attention to the timing of oral Nimodipine administration at least one hour before or two hours after a meal.

For all these reasons, we believe IV administration of Gtx, one O four it could be a much better option for S H patients than oral nimodipine.

It represents a significant commercial opportunity and we believe gtx one of work can be well positioned to rapidly capture market share if the FDA grants approval.

We plan to submit our recent PK bridging study results to the F. D. A very soon along with our proposed design for the Phase III safety study, which we believe can start as planned in the second half of this year.

The safety study is expected to be the final step required to seek regulatory approval under the five O five b two regulatory pathway before submitting our new drug application to the FDA we.

We believe the safety studies should be relatively low risk based on the favorable safety profile observed.

Not only more than 130 patients combined from our phase one PK studies.

In addition to Gtx one O four we remain enthusiastic about the depth of our clinical pipeline, which includes Gtx one O. One N G. T X one O two and we continue to make steady progress advancing these two drug candidates towards their next major milestones.

[noise] excuse me.

As a reminder, gtx 102 is a novel concentrated oral mucosal spray a beta message zone intended to improve the neurological symptoms of <unk> ataxia, <unk> or a T for short.

He is a progressive neuro degenerative genetic disease that primarily affects children, causing severe disability and for which no treatment currently exists gtx one or two is comprised comprised of the active glucocorticoid steroids beta mechanism and can be sprayed conveniently over the tongue or the 80 patient.

We believe there's a significant market opportunity for Gtx 102 is it could be the first FDA approved therapy for the more than 4080 patients diagnosed in the U S.

Based on third party market research, we estimate the 18 market for Gtx 102 to be about $150 million in the United States alone.

We plan to initiate the PK bridging study of Gtx 102 in calendar Q3 of 2022, and we continue to expect to report out the results before the end of this year. The objective of this important PK study is to compare the bioavailability of three different doses of Gtx 102 to an oral.

Solution in beta mechanism, which is only available in Europe and to the injectable form of beta mechanism, which is available in the U S.

Based on the Fda's guidance following the PK bridging study and assuming the PK bridging study meets its primary endpoint, we plan to conduct a phase III safety and efficacy trial in a T patients, which is expected to be initiated in the first half of 2023, if both the PK and phase III studies.

Meet their primary endpoints and NDA filing under section five O five b two would follow.

The final program that we have currently in the clinic as Gtx 101.

Which again is a non narcotic topical bio adhesive buyout bupivacaine spray that forms a thin film on contact with the skin and the targeted area of pain, we designed it to help relieve the painful symptoms of Postherpetic neuralgia or PHN.

P. H N is the excruciating nerve pain that many older people experience after the visible manifestations of shingles infection have subsided, we commissioned primary market research with more than 250 physicians.

That routinely treat ph and patients and they indicated that a significant unmet need exists.

Approximately 40% of patients that are prescribed the standard of care, which includes oral gabapentin and lidocaine patches experienced insufficient pain relief.

<unk> does not work well it can cause unpleasant side effects and was recently added to the controlled substance list due to a tendency for abuse.

The taxes are difficult to use they fall off and can cause skin sensitivity and irritation, especially in older individuals and depending on their placement, they're very inconvenient uncomfortable and unattractive.

And usually it can take up to two weeks for the patch to work and it can only be worn for a continuous 12 hours and then it must be renewed for another 12 hours. So breakthrough pain is common.

Given these issues with the oral and patch alternatives to many of these patients end up being prescribed opioids, which given the abuse potential physicians want to avoid at all costs.

The potential benefits of Gtx 101 could include faster onset of action, which is inherent in our active ingredient bupivacaine versus lidocaine.

As well as a longer duration of pain relief.

One O one can be conveniently straight on the skin wherever the pain is located and based on the PK profile of notification. We believe the Gtx one O. One may be applied twice a day to the affected area for 24, seven pain relief. Although this dosing schedule will need to be confirmed in our clinical trials, we believe <unk>.

101 has the potential to be a game changer as a non opioid analgesic for ph and patients who suffer from this debilitating pain.

We expect to report results of the mini pig skin sensitivity study in early calendar Q3, we're also planning to initiate a single dose study and a multiple ascending dose study in healthy human volunteers, both in calendar Q3, 2022.

These two important clinical studies are expected to report out before the end of this calendar year.

From the multiple ascending dose study is required before we can initiate our phase III program in ph and patients which is expected to start early in 2023.

So you can see that we currently have significant ongoing clinical and CMC activities underway for all three of our pipeline programs. You'll also note that we had a total of almost $44 million in cash cash equivalents and short term investments on our year end March 31st balance sheet. We continue to believe this cash position will allow us.

To complete phase three for Gtx, one O four and submit our NDA for the FDA to review, while also advancing Gtx one O two into phase III and Gtx, one O one into phase two all important milestones and key value inflection points.

We're very excited about the prospects ahead for the company and look forward to keeping you apprised of our progress towards our many milestones in this new fiscal year.

I'd like to now turn the call over to Bryan Ford, Our CFO to review our fiscal 'twenty two financial results.

Thank conclusion of Brian's remarks, we'll open the call for questions Brian .

Thank you Jan welcome everybody to the call. Please.

Please note that unless otherwise indicated all financial numbers that we discussed are denominated in U S dollars unless.

So naturals are reported conforming to U S GAAP guidelines.

Should also note that we are a clinical stage company. Thus, we do not yet generate revenue or have any cost of goods expense.

Research and development expenses net of government assistance for the year ended March 31, 2022 totaled $5 6 million compared to $4 2 million for the year ended March 31 2021.

Our research and development during the year March ended March 31, 2022 was focused primarily on the death.

<unk> clinical development program for our Gtx, one O or one or two and one O one drug candidates all three.

We were acquired in the merger, which was completed in August 2021.

Research and development during the year ended March 31 2021.

Related to the phase three clinical program for <unk>.

Which was discontinued after September 2020.

However, this did include some due diligence work and activities are various strategic options under review prior to the merger announcement.

General and administrative expenses before depreciation and stock based compensation expenses for the year ended March 31, 2022 were $9 3 million compared to $5 5 million for the year ended March 31 2021.

The increase was a result of increased legal accounting and other professional fees related to the grace merger.

And expenses related to the renewal of our at the market program.

Loss from operating activities for the year ended March 31.

And in 'twenty two.

It was 15 point.

Compared to a loss of $16 4 million for the year ended March 31 2021.

The company incurred after natural gains for the year ended March 31.

2021 or 'twenty two.

$5 1 million compared to a $3 3 million loss for the year ended March 31 2021.

This was primarily due to a change in the fair value of warrant liabilities on the balance sheet.

Next year or so that loss for the year ended March 31, 2020 was $9 8 billion or 27 cents per share compared to a net loss of $19 seven.

Or a dollar a 33 per share for the year ended March 31st 2021.

I already noted our cash cash equivalents and short term investments totaled $43.7 million.

At March 31, 2022, compared to $60 7 million.

March 31 2021.

Based on management's current projections current cash is expected to fund our lead out the GTS one O four through to NDA submission and Gtx 102, and 101, two additional key milestones.

With that I'll now turn the call back over to Jeff.

Thanks, Brian I appreciate that.

Now turning the call over to the operator M. J can you open it up for questions.

Of course, thank you Jan.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.

Any time your question has been addressed and you would like to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our first question today comes from Leland <unk> of Oppenheimer. Please go ahead.

I think Jim.

Brian .

Thanks for the update.

Questions first.

As respect to one or four.

I'm, sorry, if I missed it in your prepared remarks, but if you could remind us on the design and number of patients or subjects will need in that safety study and when we might be able to see the results.

And then also have a question.

With respect to the I T.

I know you have a notice of allowance is you know when you those patents are expected to issue. Thank you.

Yeah, Thanks, Leland and thanks, so much for being on the call today I'll I'll briefly describe you know what we're thinking of here for the design of the safety trial and also turn it over to Monique Champagne, our VP of clinical affairs and she can add any additional comments so.

We're in the final stages of designing the study right now and will be submitting the protocol. The draft protocol along with the results of our PK study I'm very soon probably within the next month or two so we'll submit that to the FDA and then we look for any comments from.

Them on the design. So we are currently on track to initiate the safety study before the end of this year and we still expect that it'll be in roughly 100 to.

125 patients.

It'll be two arm. So we will be comparing our the safety profile of Gtx, one O four with the safety profile of of the oral capsule.

Hum.

And so this is important obviously nimodipine can't be withheld from those patients. We are we don't.

Think that we'll need more than a couple dozen sites.

We're working with some of the biggest centers in the in the country biggest stroke centers.

And are we would expect you know pretty decent recruitment.

So you know we're anticipating this study will take them probably in the ballpark of 12 to 18 months to complete.

So we're thinking towards the end of 'twenty two 'twenty three early 'twenty for this study should wrap up.

And then you know it'll take a.

A quarter or so to compile all the results and submit our NDA, but we were still on track we believe to submit the NDA in early 'twenty 'twenty four.

Monique is there anything you'd like to add that I didn't cover there.

No I think inflammation with the company I wasn't there.

Also ask some questions on the study design.

Yeah.

Sorry, you broke up their money.

But he design of what.

Yeah.

Published.

Or am I.

But you are still breaking up I can you repeat that.

Yeah.

Were there other questions you wanted to clarify on this line of business.

He.

Oh, Okay got it yeah Leland any any questions you have on the PK.

No no the PK look to them.

That's terrific.

Yeah, Yeah, I think the other question was on the IP right the status of the IP and when it would be issued.

As you know we will see those patents in issue later this year.

Sure.

No need can you comment on that.

Yeah.

So communication is really bad can you. Please repeat the question.

I'm, sorry, just asking about the patents are following.

Windows.

Presumably in the coming months.

I was informed that everything was on track for that and so I don't foresee any issue with that.

Yeah, I think that's right Leland I think we would expect our issuance very very soon.

Great. Thanks, so much for taking the question.

Thanks did you have any other questions Leland.

That's all for me.

Okay. Thank you.

And operator, I don't know if for some reason the line seems to be breaking up I don't know if it's just my line.

You're coming in loud and clear, Okay, I had I had difficulty hearing leland as well.

College is for that.

Or we have any other questions.

Jay do you want to Oh, Gee, maybe while we wait to see if there are additional questions I'll jump in here with just a couple of Jan if that's okay with you Leland touched a little bit on Gtx, one O four maybe transitioning to Gtx one O two.

It has the the one O two PK bridging study protocol been developed or approved.

Yeah. That's a great question. So yeah. The study has been designed it's going to be a fully randomized open label five arm crossover study.

And of course, it's going to evaluate the comparative bioavailability and pharmacokinetics of Gtx 102, which again is a concentrated oral mucosal spray and we will be comparing it to beta methadone administered as an oral solution.

Which is only available in Europe . So we'll be doing that comparison that arm for future filing purposes in in Europe , as well as and I am arm. So it'll be an injectable form of beta matter zone for filing purposes in the U S and in Canada.

So that study that protocol has been finished we are you know.

This will be conducted in healthy male and female volunteers and is set to start within the next month or so so we're fully on track with that program.

Okay, Perfect and then just I guess on the cash burn offs, Jan or Brian wants to talk through this but from a monthly sort of burn perspective, now versus when somebody whose trials again is there any updates that you can provide to us there.

Sure Brian do you want to take that one.

Sure as we've been ramping up the the research and development activities for these three products or our monthly burn has been rough.

Roughly $800 million.

You know over the last nine months.

Going forward, we expect that to increase to upwards of $2 million a month as we get heavier in too.

The clinical trials, which are you know are administered by.

Contract research organizations and that sort of thing.

So that was a fully plan to scale up and that's where we expect things to land.

Over the next several months.

Yeah.

Okay perfect. Thank you for that that's what I had M. J. If you want to provide instructions on how to queue up if there are any questions.

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