Q2 2022 Brickell Biotech Inc Earnings Call
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Welcome everyone to the BRIC-L Biotech Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following some prepared remarks from the company, we will open up the call to Q&A. As a reminder, this conference call is being recorded. I would now like to turn the call over to Garth Russell from LiFi Science.
sign advisors Garth
Thank you, operator. Good afternoon, everyone.
Joining me on today's call are Brickell's Chief Executive Officer, Rob Brown, President and Chief Operating Officer, Andy Scholar, Chief Financial Officer, Bert Marchio, Chief Medical Officer, Dr. Monica Lucchi, and Chief R&D Officer, Deepak Chaddha. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ.
Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events, factors that could cause actual results or outcomes to differ materially from those of the following
Expressed or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and other periodic reports on Form 10-Q and 8-K filed with the FCC. It is now my pleasure to turn the call over to the company's Chief Executive Officer, Rob Brown. Rob, the floor is yours. All right, thanks for joining me for today's message.
Thanks Garth. Good afternoon everyone and thanks for joining our call today.
This is an exciting time for us as a company as we continue to advance our development pipeline of cutting edge autoimmune and inflammatory therapy.
This is highlighted by BBI02, our potent first-in-class DIRQ1a inhibitor, BBI10, a novel sting inhibitor, and our platform of next-generation kinase inhibitors.
These programs now define our company as we strive to transform patients' lives by developing innovative therapeutics and generate value for our shareholders.
During the second quarter, we initiated and announced dosing of the first patient in a phase one study of our lead DIRC1a inhibitor program BBI02. Advancement of BBI02 into the clinic is a significant milestone for both our company and this novel target, as it marks the first time a DIRC1a inhibitor intended for patients with autoimmune diseases.
has been orally administrated in humans.
We are pleased with the progress in this study thus far and remain on track to report sad and mad top line results by early 2023.
In addition, preclinical development activities are underway for BBI 10, our lead sting inhibitor candidate that we acquired earlier this year.
Finally, I'd like to briefly touch on soft-running bromide, or SB for short, for the treatment of primary axillary hyperhidrosis, which we sold to Botanics this past May.
Botanics recently publicly stated that it plans to submit the NDA for SB jail 15% to the FDA in the third quarter of 2022.
This is of course relevant to Brickell as we are eligible to receive various regulatory and sales milestone payments as well as tier to earn out payments ranging from high single digits to mid-team digits on net sales of soft crony and bromide gel. We look forward to sharing any additional updates regarding this program as they become available.
Now I will pass it over to Monica to provide an update on our ongoing pipeline development activities. Monica?
Thanks, Rob, and good afternoon, everyone.
We've had a very productive first half of 2022, and we look to continue delivering on this trend in the second half of the year.
As Rob just mentioned, during the second quarter, we initiated the Phase 1 clinical trial of BBIO2, our potent, highly selective, and orally bioavailable DIRQ1a inhibitor.
This randomized, double-blind placebo-controlled trial is designed to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of B2 capsules in both healthy volunteers and subjects with atopic dermatitis, or AD for short.
The first part of the study consists of a single ascending dose or SAD assessment of BBIO2 capsules or placebo, which is expected to enroll up to 56 healthy volunteers followed by a multiple ascending dose or MAD assessment of BBIO2 capsules or placebo administered once daily over 14 days in approximately 33 healthy volunteers.
The study is progressing as planned. As such, we expect to initiate the MAD part of the phase study next month and remain on track to report top-line results from both the SAD and the MAD parts of the study by early next year. Chemistry & Space
In the second part of the Phase 1 study, we plan to compare BBIO2 to placebo in approximately 40 patients with moderate to severe atopic arthritis, over 28 days of dosing.
This part of the study is expected to include a preliminary assessment of efficacy, which will serve as an initial model for the treatment of BBIO2 in immune-mediated disease.
This design fits with our broader strategy for this program.
the potential to develop BBIO2 for the treatment of a broad range of autoimmune and inflammatory diseases.
Based on a scientifically robust data package and promising preclinical validation that's been observed with this compound to date, we believe that BBO2's dual mode of action modulating both the adaptive and the innate immune systems could represent a paradigm shift in the way we currently treat these debilitating diseases.
We are excited to continue to progress this program in the ongoing Phase I clinical study over the next coming months.
With respect to our novel sting inhibitor program, BBI-10, in the first quarter of the year, we acquired exclusive global rights to BBI-10 and a portfolio of other novel, potent, and orally available sting inhibitors from Karna Biosciences, an established drug discovery company in Japan. In the first quarter of the year, we acquired exclusive global rights to BBI-10 and a portfolio of other novel, potent, and orally available sting inhibitors from Karna Biosciences,
STING, which stands for Stimulator of Interferon Genes, is a well-known mediator of innate immune responses. It is a well-known mediator of innate immune responses.
Excessive signaling through STING is linked to a number of high unmet needs, such as systemic lupus erythematosus, nonalcoholic statohepatitis or NASH, and dermatomyositis, as well as a series of rare genetic interferonopathies.
Several established pharmaceutical companies are currently investing in this space, and we are looking forward to developing these next-generation sting inhibitors that we believe are differentiated through their potent covalent inhibition of sting palmitilation.
Preclinical development activities are already underway for BVI-10, which has shown strong proof of mechanism resulting in significant reduction in key proinflammatory cytokines and a favorable initial pharmacokinetic, toxicology, and safety pharmacology profile.
We expect to continue to conduct these development activities throughout the rest of this year to support starting IND enabling studies thereafter.
Before I hand the call over to Burt to review the financials, I would like to briefly touch on our library's next generation.
This includes hundreds of new chemical entities that inhibit DIRK1, LRRK2, TTK, and CLICK kinases. Importantly, inhibiting these kinases has shown promising outcomes in numerous models designed to mimic a broad range of different conditions within the autoimmune, neuroinflammatory, oncology, and rare disease spaces.
We are conducting research to identify, characterize, and optimize both brain-penetrant and non-brain-penetrant novel kinase inhibitors, with the goal of progressing them as potential treatment options for debilitating diseases within some of these high-impact fields.
I'd now like to pass the call over to Burt to provide a financial review for the quarter. Burt? Good, thanks damage to all of us.
Thanks, Monica, and good day to everyone on the call.
Before I provide a summary of the second quarter 2022 financial results.
I want to encourage you to read our full consolidated financial statements and MD&A contained in our report on Form 10Q, which can be accessed through the investors section of our website once filed with the SEC.
Starting with cash, the company reported $14.5 million in cash and cash equivalents as of June 30, 2022.
We expect that our cash and cash equivalents, combined with $2 million from expected near-term payments under the asset purchase agreement with Botanics, will support our operations for at least the next 12 months.
Revenue for the second quarter of 2022 was approximately $4.3 million compared to $0.2 million for the second quarter of the prior year.
Revenue for the second quarter of this year consisted primarily of contract revenue recognized under the asset purchase agreement with Botanics.
which includes an upfront payment from Botanics of $3 million.
Reimbursement from botanics of $0.6 million in development expenditures.
Fees for consulting services the company provided under the transition services agreement.
of 0.4 million.
and sublicense income under the asset purchase agreement of 0.3 million.
Revenue for the same period last year consisted of royalty revenue we recognize from the sales of eCLOCK or SB gel 5% in Japan by Kakken Pharmaceutical.
R&D expenses were $1.9 million for the second quarter of 2022.
compared to 8.8 million for the second quarter of 2021.
This decrease was driven primarily by significant clinical expenses.
related to US Phase III clinical program for SB-GEL 15%, which concluded in the fourth quarter of 21 versus the substantially lower clinical costs that relate to the start of our Phase I clinical trial of BBI-02 during the second quarter of 22.
G&A expenses were $3.9 million for the second quarter of 2022 compared to $2.9 million for the same quarter of the prior year.
This the increase was primarily related to the sale of SB and higher legal compensation and other administrative fees.
Our net loss for the second quarter was 1.1 million compared to 11.1 million for the same period last year.
And with that, I'll turn the call back over to Rob for closing remarks. Rob?
Thanks for the financial recap, Burt.
The first half of 2022 proved to be a defining period in our company's evolution. As we shifted our focus towards the development of an exciting pipeline of novel candidates with broad potential in the fields of immunology and inflammation.
As we look ahead to the next few quarters, there are several important milestones planned that we believe present a significant opportunity to start building value for our shareholders.
This is highlighted by the SAD-MAD top-line results from the BBI02 phase 1 study, which we expect to announce in early 2023, and the continued development and characterization of our other novel therapeutic candidates, including BBI10 and our next-generation kinase inhibitor platform. This is highlighted by the BBI02 phase 1 study, which we expect to announce in early 2023, and the continued development and characterization of our other novel therapeutic candidates,
This concludes today's prepared remarks. I'll now ask the operator to open the call up for questions. Operator.
We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
To withdraw your question, please press star then 2.
The first question comes from Tim Lugo of William Blair. Please go ahead.
Hey guys, locked on for Tim. Thanks for taking the question and congrats on the progress in the quarter. So I was wondering, you know, obviously BBI02 is the priority and sounds like BBI10 is the next priority, but beyond that, how are you thinking about prioritising resources across the platforms and the various?
early stage kinase inhibitors that you've gotten over both the DIRQ1A and STING.
you've done in the past year. And then second of all, after you get the SADMAD data in say early next year, what kind of turnaround is it to then initiate part two of the study in patients with atopic term?
Thanks for the question. Let me answer the second one first and then we can talk in broad terms about the early pipeline. The real answer is we are going to need the data from the sad mad portion of the study to inform us about our future plans and the timelines. You have to remember this is the first time this drug has been in man. It is the first time a DIRC1a is oral DIRC1a.
On the first question about the pipeline, maybe I'll ask Monica to opine on that a little bit, but needless to say, the vast majority of our time and our focus and our resources as an organization are on BBI 02 and then BBI 10. We are starting to characterize the library of assets we acquired through the two transactions, but again, the majority of our time is being spent on those first two assets.
Monica, would you like to add any color to the pipeline?
Sure, I can add a bit and then of course Deepak can add some as well. We've been sorting through the various molecules that we have in that pipeline. Quite a bit of characterization work has been done already, but not quite enough to move completely into the...
I'm sorry there was a bit of feedback there so I apologize for that. Actually Deepak and his team are actively evaluating the various molecules.
We'll identify which of these has the most favorable characteristics for going forward. Deepak, do you want to give any extra information on that?
I think, Monica, you provided the highlights, but just to add, so our focus right now is in terms of understanding physical and chemical approaches to help our next-gen kinases. We are very much interested because, you know, during our update, we mentioned that really neuro-inflammatory side of things. So based on our next-gen kinases, we are really focused on understanding theCEFORM EXAY unaff lifting US AI logic instantly EVOLUTION trunk V Hearthstoneids involuntary variation Jonah T Magan R
whether those compounds even have the blood-brain barrier penetrating properties. So we are very focused in exploring that aspect, which opens up the whole neuro-inflammatory side of things. And again, we are planning to first understand the chemical and physical characteristics of these compounds. But the next step will be doing some PK exposure studies. And we'll be very interested to understand the...
blood brain barrier penetrating properties, and then we will look into starting some of the in vitro preclinical work. So there's a lot on the table for the next 12 to 18 months on the next gen kinase as part of the pipeline.
Thanks for the call.
The next question comes from Ram Salvaraju of HC Wainwright. Please go ahead.
Hi, everyone. This is Mitchell on for Ram. Thank you for taking the question.
The first one is on the BBI02 program and the strategy there. Could you just give us an update on what you're thinking after atopic dermatitis? What goes into the decision to pick an indication? I know you'll have to look at a bunch of different cytokines and other markers, but is there a decision tree you can kind of walk through that, broadly speaking, you're analyzing and thinking about as you go forward with this program?
Thanks, Mitchell. Let me start with that and then Monica, let me ask you to jump in as well. First, it is important to remember that we have picked atopic dermatitis as the indication that we are going to look at in this part 2 of the study. It does not necessarily mean we are going to focus on atopic dermatitis long-term. We think that it is the ideal vehicle, if you will.
to help us with a proof of mechanism, if you will, of the drug and see how it's working. Because it's a skin disease and we can measure a variety of different endpoints and understand we think what's happening in the human body, atopiadrym types of patients, better. That's really why we're focusing on that. That data is really what drives how we decide what to do.
And maybe, Monica, if I can turn it over to you for a minute to share a little more insight into that. Thank you.
Sure. So because this molecule is the first time in humans, as you know, and I've learned more about the pharmacokinetics and the pharmacodynamics and safety, we're going to be assessing a wide variety of endpoints in the AD study that would be extrapolatable to other autoimmune disorders. So of course, we're going to be measuring cytokine trends. That's going to be important to us on all.
We'll also be looking at various cellular markers. We'll be looking at cell markers ex vivo. We'll be also looking at in situ.
cellular populations in the actual space of inflammation via biopsies that I'm talking about. So we'll be able to identify what types of cells are present pre-treatment, what types of cells are present after treatment, and inform ourselves about how DERP1A inhibition actually affects this chemotaxis into the tissues. We'll also be looking at tape stripping, which will give us some idea about any impact on
So we have a wide variety of information which will give us data on...
Both inflammatory disease applicability and autoimmune disease applicability. And depending on the trends and what we see in that data, that's going to probably shift us one way or the other as being the most beneficial.
There's so much information that we're going to be getting and I can't stress that enough and it will help to shape the future direction. If the AD data is stellar, of course we'll think about that as well.
Does that help? Thank you very much. Yes, absolutely. That was very thorough. And then on BBI 10, could you just talk about the strategy there and what are the next updates we can expect as you move towards the clinic?
Deepak, would you like to talk about that? Sure, I'm happy to answer. So as mentioned, BBI-10 or the sting inhibitor compound is just getting out of discovery into preclinical. Our focus for the next 12 months is very much in understanding more into the in vitro side of things. So we have already planned to carry out some of the in vitro.
metabolism study, solubility. We are really interested to get an early read on SIP inhibition, induction, plasma protein binding. So that's just the gamut of data is going to help us.
starting the IND enabling study next year. So short answer, next six months in vitro work and then once we moved into 2023, we are going to embark on the IND enabling talk studies.
And then subsequently as we move the asset forward, clearly sometime around 2024, we will be looking into starting first in human. A lot of preclinical work to be done in the next 12 to 18 months.
Great, thank you. Last question from me, just wanted to ask about what more needs to be done on the botanic side to get that submission in, that NDA submission in for soft peroneum.
We are excited that they are on the cusp of getting that done. They have stated publicly that they will get it done in this quarter. I think we probably ought to leave it for them to provide any more information on that. Obviously, we are tracking and working with them. Our team is helping in the preparation of that submission. I will leave it to them to provide any more guidance on timing. Thank you.
Great. Thank you for taking all the questions.
The next question comes from Leland Gerschel from Oppenheimer. Please go ahead. You're welcome.
Hi, this is Ron Mather speaking on behalf of Leland. Congrats on another great quarter and appreciate you taking my question.
Just a couple questions on the DB 10 DB I 10 portfolio
In light of the recent Carnisting inhibitor portfolio acquisition, have you made any progress in determining the
What kind of indications in your information might be of interest and what particular stages of the disease would you be looking at? And moreover, are there any diseases you feel sting inhibitors would have a competitive advantage over other therapeutics?
And just to follow up on that.
How do we think R&D expenses will look?
As trials pick up and we move into the clinic and also. Are there any plans to get some kind of partnership funding involved? Thank you.
Great, well let me answer the first part, the first questions on R&D expenses first and then we'll talk about BBI 10 briefly. I think the quarter as you see is far more representative of what our spend going forward will look like. We had R&D expenses 1.9 million in the second quarter and that's far more representative of what it will look like plus or minus some as we do this.
this phase one work. So very, very different obviously than the soft running bromide expenses we were spending a year ago or even a couple quarters ago. So this last quarter's probably not a bad barometer to use for the next few quarters. On the DBI 10 portfolio, you know it's really too early I think for us to opine on which indications and what stages of the diseases that might make sense for this at this time.
We're excited about the broad potential for this product. There's a number of really interesting diseases with unmet needs, but it's probably a little too early for us to find too much. In terms of advantages, Monica, I don't know if you have any sense for where the stings might have an advantage versus other treatments that are out there and provide any thought on that.
Well, things very clearly related to the interferon pathway, and particularly in autoimmune diseases, but also in auto-inflammatory diseases. There's clear overdrive of the interferon pathway.
So I think because these are so focused on the interferon pathway, that gives us an advantage over the more broad-based immunomodulatory modalities.
more focused targeted
Great. Thank you so much.
The next question comes from Thomas Flatten of Lake Street. Please go ahead.
Hey, good afternoon. Thanks for taking the questions. Just a quick 1 for Bert, the cash runway of at least 12 months. Is that an accounting? At least 12 months, or should we think 12 to 15 months from that perspective?
That's at least 12 months.
from an accounting perspective, which also means we've got to have the cash to go out that far.
Right. Monica, I'm struggling with how to really word this question intelligently, so please bear with me. Given that you're taking a look at atopic dermatitis for BBI02, is there a kind of decision tree that you already have in mind if you see certain PD dynamics that will drive you towards the certain other autoimmune indications versus a different one? I'm trying to understand how that decision tree really works once you get that data in hand. What are the particular pathways that are pre-established?
that target actually behave in humans. Obviously, we're going to need to take safety in regards and what kinds of risk-benefit ratios that we have. When we're looking at deciding on different diseases, that's one thing we need to think about. We'll need to see how well we do in terms of being able to shift the cytokine flow from pro-inflammatory cytokines to lower levels of inflammatory cytokines if we hit some more than others.
Obviously, there are some diseases that are driven a little bit more by some cytokines. You look at IL-6 diseases, for instance, the TNF-alpha-driven diseases, which often overlap but differentiate slightly. If we see an impact on Th2 cells, when we look at our cellular populations, that might take us down one path. If we have more of an impact on Th17, that might take us down a different pathway. So unfortunately, there are so many unknowns that I can't say that we have a definitive
Path right now to say, if we see this, and then we said that there's just too many different balls in the air. We'll have to see how they all line up. And then, I guess, see where they lay, make our decisions then. I'm sorry I can't be more specific. It's just a little bit early.
Yeah, no, that's absolutely fine. And then one final one. Is there a... okay. Okay, sorry...
What is the risk, if any, that 28 days of treatment simply isn't enough to see an early efficacy signal or see the pharmacodynamics that you'd be hoping for or some of the downstream consequences of treatment?
That's a great question, a really good question, and one I can't answer. As you well know, there are, that AD, there are drugs that'll give you an impact already, two to four weeks, and there are some that you have to wait 12 weeks, and ultimately, it's chronic long-term diseases, and if you get the best outcome, and it takes you a little bit longer to get there, sometimes patients are waiting to wait for that in order to get to the better outcome. So we don't know how S
And we'll learn a little bit about that with the AD program, but we were sensitive to that question and that's why we very consciously have said all along that this will give us a preliminary assessment of efficacy. We don't want for ourselves, we don't want to think that if we don't get the biggest bang for the buck after four weeks that this is not a good way to go. So we're very conscious of the fact that 28 days is a limiting factor and that's why we're going to be starting our...
Actually, our subclinical talks is going to be starting imminently. It's the longest three months. Thanks, Phil.
Thanks so much for taking the questions. I appreciate it. Thank you.
We've reached the end of our question and answer session. I'd like to turn the call back over to Mr. Rob Brown for closing remarks.
Thank you for taking the time this afternoon to listen to our update. We're enthused about what the future holds for BRICCL as a biotech exploring cutting-edge treatment alternatives for patients suffering from debilitating autoimmune and inflammatory conditions.
We look forward to sharing additional updates on our development progress moving forward. As always, please feel free to reach out to us at any time if you have further questions. Have a great day.
Thank you. That concludes today's teleconference. You may now disconnect your line at this time. We thank you for your participation today.