Q2 2022 Salarius Pharmaceuticals Inc Earnings Call
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I would now like to turn the conference over to Kim Golodets with LHA Investor Relations.
Kim, please go ahead.
Thank you. This is Kim Gallaudet, Senior Vice President and Principal with LHA Investor Relations.
Thank you all for participating in today's call. Joining me from Solarios Pharmaceuticals are David Arthur, Director and Chief Executive Officer and Mark Rezamblum, Chief Financial Officer. In addition, Dr. Daniela Santiago de Banz, Director of Protein Degrevation Development, will be available for Q&A.
During this call, Solarius will be making forward looking statements about operating metrics, future expectations, plans, events, and circumstances, including statements about its strategy, future operations, the development and effectiveness of its investigational drug candidate, Sec with MSTAT and SP31-64, as well as its targeted protein degradation program, and expectations regarding its capital allocation and cash resources.
These statements are based on Solaris' current expectations, and you should not place undue reliance on these statements. Actual results may differ materially due to risks and uncertainties, including those detailed in the risk factor section of the company's annual report on Form 10-K for the year ended December 31, 2021, and subsequent quarterly reports on Form 10-Q , as well as other periodic FCC filings.
except as required by law, Solarius declines any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise. might be
With that said, I'd like to turn the call over to David Arthur, CEO , Solarius, former tutor calls David.
Thank you, Kim.
And thank you to all of you for joining this call and for your interest in Solarius, particularly for all of you joining us for your first Solarius earnings and business call update.
The second quarter in recent weeks were once again very productive for Solarius as we continue to advance both of our lead programs towards multiple near-term milestones.
We are making excellent progress in pursuit of our vision of treating patients fighting cancer with either Secla demstat or SP 3164 while providing investors with potential value creating inflection points later this year
Indeed, based on the progress we made in the first half of this year, we expect a busy second half of 2022. We expect a busy second half of 2022.
I'll first talk about Secular DEMSTAT, our reversible LSD1 protein inhibitor. And although Secular DEMSTAT program is furthest along the development path, that does not in any way, the ministry excitement we have for 3164, our targeted protein degrader, where we plan to submit an investigational new drug application to the FDA and begin human trials next year. And we have a new drug application, and we have a new drug application, and we have a new drug application,
Enrollment in our Phase 1-2 study with secladimstat in Ewings and other FET-rearranged sarcomas is progressing well.
Last week we announced the addition of several prestigious sites to the study.
the Seattle Cancer Care Alliance, which is comprised of the Fred Hutchinson Cancer Research Center, Seattle Children's Hospital, and the University of Washington Medical Center, all well-known names in cancer research.
We also added Oregon Health and Sciences University, another well-known name, which brings us to 15 total clinical sites representing 23 separate locations around the country enrolling patients.
We also plan to add a few more sites in the coming weeks and plan to make an announcement once those sites are active. We also plan to make an announcement once those sites are active.
We remain on track to report interim data later this year with additional data being available as patients continue to enroll and continue on ciclobenstat treatment.
in our interim data later this year with additional data being available as patients continue to enroll and continue on Secular Them Stat Treatment. As a reminder,
Ewing's and FET rearrange sarcomas are rare with limited treatment options and poor prognosis, which makes the work we do extremely important.
All of the FIT Solaris and hopefully you as investors and interested parties are motivated by the prospect of making a difference in the treatment of these cancers would hire Metin. These cancers would hire Metin.
We are also excited to announce last week a collaboration with Volition Rx.
to advance rapid epigenetic profiling utilizing their NQ technology.
This profiling will support further development of Secla Demstad by studying biomarkers.
to allow for a non-invasive method of determining target engagement.
In other words, is the drug reaching and having activity in patients' cancer cells?
So, this exciting research collaboration provides us another tool to aid in the development of ciclodimstat to treat patients in the clinic and beyond.
The study of Cyclodempset is also progressing at the MD Anderson Cancer Center in an investigator initiated hematologic or blood cancer clinical trial. The study of Cyclodempset is also progressing at the MD Anderson Cancer Center in an investigator initiated hematologic in an investigator initiated hematologic
As a reminder, the cost of investigator initiated clinical trials is usually significantly subsidized by the sponsoring institution, which in this case is MD Anderson, which markedly reduces the cost to generate key proof of concept patient data.
We continue to expect interim clinical updates from this trial before the end of the year. Our final resolution is for the next year. We continue to expect interim clinical updates from this trial before the end of the year. We continue to expect interim clinical updates the end of the year.
Now, turning to our protein degradation accept SP3164.
Recall that in January of this year we acquired an intellectual property portfolio from Duda-Rex LLC.
including the drug candidate SP31-64.
3164 now forms the basis of our Targeted Protein Degradation, or TPD, drug development program.
TPD is a subject of heightened interest in the pharmaceutical community because of its potential to develop medicines that target cancer promoting proteins that have historically
been considered undruggable.
In addition, we believe this is a validated area of cancer research, with a class of early protein degraders called molecular glues showing considerable therapeutic and commercial success. Let's not forget that Bristol-Myers Squibb reported in their fourth quarter and full year financial results for 2021 that the first generation molecular glues Revlimid and Pomalyst generated over $16 billion.
in global sales in 2021. As I just mentioned, we believe this helps explain heightened interest in protein degradation.
among the pharmaceutical community.
What we believe makes 3164 unique or differentiated from other molecular glues is that it is the preferred half, or preferred enantiomer, of the widely studied drug of atomide, with the potential for increased efficacy and improved safety versus of atomide and potentially other molecular glues.
Since its acquisition at the beginning of the year, we have made good progress in advancing 3164 and have already completed the pre-IND meeting process with the FDA.
That meeting process provided valuable input and clarity on preclinical, clinical, and other regulatory matters for preparing and submitting RIMD.
We are currently implementing IND-enabling studies and other development activities, and we believe we remain on track for an IND submission in the first half of next year with the start of clinical studies soon thereafter.
Included in our IND-enabling work are studies evaluating 3164 as single-agent treatment used in combination with other common anticancer treatments and compared to other molecular glues.
and we continue to look forward to providing updates layer this year.
Many large pharma companies are partnering with development stage protein degrader companies, likely catalyzed by the commercial success of first molecular glues.
like Reviment and Pommelist, which as I mentioned earlier had been in the year 2021 global sales of more than $16 billion.
As a reminder, we have seen a large number of partnerships for both preclinical and early clinical stage drugs, including most recently in February when Amgen signed a development deal for Plexium's protein degrader valued at more than $100 million.
We were interested in hearing from pharmaceutical leaders with respect to both 3164 and ceclodimstat and with that in mind we attended the 2022 BIO International Conference in San Diego, California.
With over 15,000 attendees, Bio provided members of the Solarius team with multiple opportunities to provide updates not only on both programs, but to capture input on what type of preclinical and clinical data a number of those pharmaceutical companies would like us to generate.
We've taken that advice, so we consider bio a success.
Before I turn the call over to Mark to review our second quarter and year-to-date financial results, I want to add that we have managed our expenses very well while progressing towards our 2022 milestones.
Each day draws us closer to achieving those milestones and potentially having two anti-cancer medicines to treat patients who have failed existing therapies. This draft textures regular hemocinitis from respiratory There are a few.
Mark, over to you.
Thank you, David. Our net loss for the second quarter of 2022 was $4.7 million.
or $0.09 per share, and this compares to a net loss of $3.1 million, or $0.07 per share, for the second quarter of 2021.
The increase in net loss was due to higher operating expenses and the absence of grant revenue in the 2022 quarter.
Research and development expenses were $2.9 million of the second quarter of 2022. The second quarter of 2022.
Compared with 2.1 million a year ago.
The $800,000 increase was primarily from spending on our targeted protein degradation technology purchased in January of this year. The $800,000 increase was also from spending on our targeted protein
Overall spending for Secla Demstat was unchanged compared to the prior year.
General and administrative expenses increased to $1.8 million during Q2 of 2022, from 1.6 million last year through the higher-person pay up possible increase cost to Dh camp below. Jay ?? gern alike, They'll cost.
and proxy solicitation services for our annual meeting of stockholders held in June of this year. I'm ready to maintain their
Netcash used for operating activities during the second quarter of 2022 with 3.6 million and this compares to 3.2 million a year ago. Netcash used for operating activities during the second quarter of 2022
Turning to our year-to-date financial results.
Net lost for the first half of 2022 was $10.8 million or $22 cents per share.
Compared to a net loss of 4.9 million or 13 cents per share for the first half, 2021.
The increased loss was primarily due to higher research and development expenses, including a $2 million dollar, one time non-recurring purchase of our targeted
protein degradation portfolio and other spending for this technology.
Secla Demstat costs for the six month period increased, almost all of which occurred in the first quarter, resulting from higher development and clinical trial expenses and higher personnel costs offset by lower manufacturing costs.
We incurred higher general administrative expenses, resulting from higher personnel costs and public company costs.
We recorded no grant revenue for the six month period, whereas we reported grant revenue of 1.8 million for the first half of 2021. For the first half of 2021.
Net cash use and operating activities for the first half, 2022 was $7.1 million, and an increase of $1.2 million from this prior period. Net cash use and operating activities for the first half, from the prior period.
Netcash used an investing activities $1.5 million is the cash portion of our targeted protein degradation purchased in January of this year.
And now I'll review.
key balance sheet items.
We have benefited from grant revenue from the Cancer Prevention and Research Institute of Texas or CEPRIT, and note that we view receipt of these grants as a vote of confidence for our Secular DEMS staff program. At this point, we have reached the maximum amount of eligible spending that can be reimbursed from CEPRIT.
and we recorded a $1.6 million receivable on our ballot sheet. raw
As of June 30, 2022, Solaria said cash, cash equivalents, restricted cash, but 22.6 million compared with 29.2 million as of December 31.
So Larry has set cash, cash equivalents, restricted cash, about 22.6 million compared with 29.2 million as of December 31, 2021.
Current cash and cash equivalents are expected to fund the company's planned operations.
into 2023.
With that, I'll turn the call back over to date.
Thanks Mark.
One challenge I encounter with every investor call is communicating the confidence I have in Solarius and the excitement I have for the near future.
Both Secular M-Stack clinical trials continue to enroll patients and MD Anderson and Salarius are both collecting clinical data. We continue to plan to share that interim data later this year. Either or both of these clinical.
interim data updates could be positive news for patients fighting these terrible cancers.
In addition, our 3164 Protein Degrader program is proceeding as planned, preclinical data is arriving, we are planning to provide updates on that data later this year, we are progressing towards an investigation on the drug application, and I believe we will begin clinical trials next year with what could be the next generation molecular glue.
And we recently completed a productive series of meetings with pharmaceutical companies at the Bio-International Convention. And as Mark just mentioned, we ended the second quarter with over $22 million in cash and cash equivalents in the bank. So, a protein inhibitor in two clinical trials with interim clinical updates later this year, a protein degrader with preclinical data releases later this year, with plans to enter the clinic next year.
and over $22 million in the bank as of June 30, 2022. This is why I'm excited, and these are only some of the reasons why I have confidence and it's hilarious, and I'm excited about the future.
I also want to mention that we'll be presenting at the Latinburg Falman Healthcare Conference being held in New York City on Thursday, September 29th, and we'll be available, Solerius Management will be available for 101 meetings at the conference. Also, earlier that week, we plan to be in New York for 101 meetings with the investment community. Please contact LHA Investor Relations, RIR firm if you would like to arrange a meeting.
And in addition, Dr. Daniela Santiesteban has accepted an invitation to speak later this year at the fifth annual Targeted Protein Degradation Summit in Boston, Massachusetts.
Per the summit website.
The annual TPD summit is the world's leading industry dedicated conference that spans the full drug development pipeline from discovery through to the clinic and they are expecting over 700 experts from pharma biotech and leading academic labs to attend their conference from October 25th to the 28th and We are looking forward to Daniella providing an update on our 3164 program
Before we open the call for questions, I want to let investors know that in addition to making a difference in the lives of patients fighting cancer, we are also looking at the
One of our goals is to provide transparency to investors so they understand our development timelines and our expected milestones.
For that reason, moving forward, our conference calls are expected to be event driven rather than adhering to a predetermined schedule based on SEC financial filing deadlines.
We will continue to issue earnings and business updates on the SEC schedule, but I expect our next public conference call will be held when we have interim clinical or significant preclinical data to discuss.
With those comments, I thank you for your time and attention. Joining us now for the Q&A portion of the call is Dr. Danielle Santiago Esteban, Director of Protein Inhibition Development. And now operator, we're ready to take questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If you are using a speaker phone, please pick up your handset before pressing the keys.
To enjoy your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.
The first question comes from Awhudamir of Ladenberg. Please go ahead.
Good morning. Thank you very much for taking my question and congrats on the progress you made this quarter. My question will be about the partnership you established. I would like to get some more information on how you plan to implement that partnership with Volition RX in the ongoing sector of the MSS clinical trial. And then we might see some patient of your genetic profiling data.
Ahu, this is David. It's good to hear from you. Thanks for the question.
I think I'm going to let Daniela take this question. She was the person spearheading this partnership and she is the best one to give you the information you're looking for. Daniela, are you there? Okay.
Yes.
Thank you, Austin, for the question. I'm seeing, we're very excited about this collaboration with Felician. They'll be taking samples from patients on our stercoma trial.
And it's plasma sample. So like David said, non-indasive. And they're looking at methyl marks for tumor nucleosomes. So what that will tell us is if seculodempset is getting to the tumor and having an effect on cancer cells. And having an effect on cancer cells.
we should see an increase in methyl marks. And that's what the volition data will provide us with. And we're hoping to start collecting that data towards the end of this year and into early next year.
Does that answer your question?
Yes, it does. Thank you so much for that answer. I have a follow-up question on the second MSTED program. I am curious to know what is the current enrollment status and you did mention there will be a data readout we are excitedly waiting for. Is there any determination of conferences when you would be disseminating the data that we will see the data or is it going to be a press release? Any information in the color will be very helpful.
I'm happy to provide some color.
As we've mentioned a number of times, we're looking to the second half of this year to be a period of time where we'll have a very rich.
Data Update
series of announcements, both clinical from the CICLA-DMSAT program and preclinical from the 3164 program.
specifically about Ewing's Tacoma.
We don't discuss actual enrollment numbers, but as you can see, based on the data we're generating, we are continuing to get interest from...
clinical trial site. We just added four prestigious names to the list and we have a couple more coming online any day now and we're looking forward to that release and that will take us up to, I think, 17, maybe a few more, 17 sites would even use more than possibly 23 locations across the country.
So the enrollment is going well. Now, what we're looking for in this patient data, and you're probably aware of this based on the recent release of the ReCUR data coming out of Europe , is that what's really important, according to the principal investigator of ReCUR, is progression-free survival.
And that just takes a little while. You know, the progression-free survival data for the...
The second, for the first and second relapse patients with Recur was sadly just terrible. I can't remember the exact numbers. It was maybe two and a half months and maybe three and a half or four months for the two different treatments they were releasing data on and it's just terrible for these patients with Ewing. So we're very fortunate that the patients we've enrolled.
our on-drog and we're monitoring them. And by the end of the year, definitely in the second half of this year, we'll have enough data on their duration of treatment, of rent-free survival, progression-free survival, however you want to look at it. To we think really provides some great guidance to the marketplace and the doctors and investors on what we think we can do with this drop.
and we'll just have to wait and see what happens, but we feel really good about sticking to that timeline of being able to provide some data. Now, how will we do that? Not entirely sure yet. You know, once we have the information and we feel confident that it's ready to be released, you know, from an ethical perspective, if it's good information, I'm certainly not gonna sit on it just to wait for a conference when we could be telling patients that fighting this terrible disease or might do a good option out there.
Okay, well, I hope we have a few minutes if you'd like to continue now.
Yes, of course. So my next question will be on the 3164 program. What stage of the IND-enabling studies are you at? And if you can give some information on that, that will be very helpful as well.
Well, I think I'm going to let our director of targeted protein development take that question. When you ask if you have been a minded doctor and to use support? udon supports ??????? and when it comes toFit that once you have left the sentences. Yes, those are the sentences. In fact, Cre expecting do-up surgery for her right birth would be an avoidance, let it, let it be you want to be their representative. Afterwards to drop the sentence. Thank you.
All right, thank you, David. And thanks, Afro, again, for the question. So, yes, like David mentioned during the call, we remain on track to submit an IND in the first half of next year. We kicked off the IND-enabling studies last quarter, so we're going through all of the required IND-enabling studies right now. And in addition to that, the data I'll be presenting at the October conference will be more a mechanism of action.
more in vitro and in vivo proof of concept.
So yeah, to answer your question, we remain on track to submit the IND in the first half. And then like David said, we are going to start the trial soon after that. We are going to start the trial soon after that.
Who are you there?
Yes, I am. I could not hear you for a moment. Thank you very much. Very helpful. Thank you.
Okay, I think with that we are going to turn it back over to the operator.
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Thank you.
trailing.
Okay, seeing no more questions in the queue, this concludes our question and answer session. I would like to turn the conference back over to David for closing remarks.
Absolutely.
So hopefully this call has provided you with the opportunity to understand some of the confidence and excitement we feel at Solarius. We're certainly looking forward to the second half of this year and I'm sure you all are all as well. I hope you all are as well.
Let me thank you for your time and your attention. We look forward to keeping you appraised of our progress and expect a robust schedule of announcements in the second half of the year. Be safe and have a good day everyone.
The conference has now concluded. Thank you for your participation. You may now disconnect.