Q2 2022 CASI Pharmaceuticals Inc Earnings Call
And.
you
To ask a question, you may press star, then 1 on a touchtone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Rezaan, Vice President of CASSI Pharmaceuticals. Please go ahead, ma'am.
Thank you, Vash. Good morning. Welcome to Casey's second quarter 2022 conference call. Early today, Casey issued a price release providing the details of the company's business updates and financial results. Foot quarter ended June 30, 2022.
This progress release is available in the investor relations section of the company's website.
Today's call will be led by Dr. Wei Wuhe, our Chairman and CEO , along with Mr. Larry Zhang, our President.
Dr. Alex Stukinski, our Executive Vice President and Chief Medical Officer. Dr. Jim Goldsmith, Chief Business Development Officer. They will also be available to answer questions during the Q&A session.
As a reminder, we will be making forward-looking statements, including our business plans, objectives, and milestones.
These forward-looking statements are not a guarantee of future performance, and therefore you should not put undue reliance upon them.
The statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those projected or implied in our forward-looking statements.
For description of the important factors that could cause actual results to differ, we refer you to the statement in our ICC findings.
It is now my pleasure to turn the call over to our Chairman and CEO , Dr. Wei Wu He. Dr. He.
Thank you, Ray. Good morning, everyone, and thank you for joining us.
Aawa began the call with an update on the business, followed by our lead programs and near-term catalysts.
concluding with our financial highlights.
In the second quarter of 2022,
COVID-related lockdowns and associated restrictions limited access to hospitals in several large cities in China, which had an impact on the sales of EvoMala. Our sales and marketing team is proven to be resilient.
rapidly adapting strategies to address these challenges to ensure that our priorities remain on track.
Revenues from sales of Ivomala increased by 19% compared to the same period last year.
equipped with experience from EvoMala and the ability to adapt to a changing environment.
I believe our commercial and medical marketing team
can efficiently execute the anticipated launch of CMCT-19 in China.
Our strategic focus in 2022 will continue to be to advance the development and commercialization of the portfolio.
We anticipate the start of BI 1206 phase 1 trial in China.
Very so.
We expect the CD5339 to receive clinical trial application CTA approval from the NMPA during 2022. Meanwhile, our CID 103 phase 1 study continues.
We are excited by our momentum and will continue to execute on
several key milestones across our broad portfolio in the quarters ahead.
In May, we evacuated a 10 to one reverse split of the company's common shares.
As a result of the reverse split, the number of shares of outstanding common stock will be approximately 13.6 million shares.
The objective of the reverse stock split is to satisfy the minimum bid price requirement.
for continued lifting on the NASDAQ capital market and will not affect our value and shareholders' ownership percentage of Cassie's share.
In the second quarter, we entered into a sub-license agreement with precision auto-immune therapeutics.
a Chinese incorporated company.
previously known as Beijing Tianzi Tongda Pharmaceuticals Technology.
We've granted positioning therapeutics.
Precision Autoimmune Therapeutics, an exclusive worldwide license for the anti-CD38 monoclonal antibody.
for the treatment, prevention, and diagnosis of autoimmune diseases.
Precision Autoimmune Therapeutics will make an upfront payment of $10 million equivalent in two equal installments upon completion of its first and second financing.
respectively.
plus potential future payments of development and sales milestones.
and royalties to Cassie.
Upon completion of equity financing,
Cassie's rule is wholly on the Chinese subsidiary.
will hold 15% equity.
is a newly established company.
The Civil License Agreement will allow Kathy to remain focused on the malignant...
hematology oncology market.
while allowing the clinical entity of CID 103
to be explored for the potential treatment of auto immune diseases.
Now let's move to Cassie's first commercialized product, EvoMala.
We are pleased to report 8.6 million
in revenue in Evo-Mala cells for the second quarter of 2022.
Evomela is approved in China for use as a high-dose conditioning agent.
prior to hematopoietic stem cell transplant.
stem cell transplant patient.
in patients with multiple myeloma.
EvoMella is a proprietary formulation with patent protection until at least 2030.
and is currently the only psycho dextran enabled for the formulation of injectable malfolines commercially available in China.
Our experiences.
specialty sales and marketing teams.
in the heme oncology market in China is a major competitive advantage.
We have established access to a substantial number of key opinion leaders who can advise us on the unmet medical needs of our patient population.
Cassie continues to pursue a similar strategy.
with respect to marketing efforts.
and physician business.
to further the adoption of stem cell transplantation.
as a standard of care in the multiple myeloma treatment setting and will continue working to address the persistent high medical needs in this patient population.
Now I will have Alex address our upcoming pipelines.
our upcoming pipelines. products.
Good morning. This is Alex Cuski. I'm the Chief Medical Officer for CASI. I'd like to first speak about the CNCT19 CAR T product. Our partner, Javentus Cell Therapy, continues the development of CNCT19, an autologous CD19 directed CAR T investigational product for which CASI has co-commercial and profit sharing rights.
CNCT19 is being developed as a potential treatment for patients with hematological malignancies, which express CD19, including B-cell acute lymphoblastic leukemia and B-cell non-Hodgkin's lymphoma. In January , CNCT19 received orphan drug designation by the US FDA.
GNCT19 is being locally developed in China and will be locally manufactured, which distinguishes this program from other CAR-T19 therapies developed and manufactured in part outside of China.
The pricing of cell therapy and other innovative drugs in China is a crucial issue for patients.
Similar, CD19 CAR-T developed and manufactured utilizing imported components are subject to certain ex-China CMC at higher cost of goods, making the price point significantly higher than we believe the price of CN CT19 will be.
Juventus in China is currently undertaking the Phase II registrations in both the BALL and B-NHL indications.
Starting in mid-2021, our commercial franchise has thoroughly prepared for the anticipated China C&DA filing of the CNCT19 CAR T program, which we currently expect to be in the second half of 2022.
Now, let me address the other product candidates in our pipeline.
BI 1206.
Along with our partner BioInvent, we continue to progress the development and regulatory framework for BI 1206 in China.
We licensed BI1206 at first in class human monoclonal antibody that targets the FC-GABA R2B receptor for the greater China market.
BI 1206 has a novel mode of action.
blocking the single inhibitory antibody checkpoint inhibitor, FC-GammaR2B.
to unlock the anti-cancer immunity in both liquid and solid tumors.
The Fc gamma receptors are antibody checkpoints that modulate the efficacy of tumor-directed
Tumor cell directed targeted antibodies and immune checkpoint targeting antibodies used in cancer immunotherapy.
BI 1206 can potentially be used in all therapeutic monoclonal antibodies that rely on ADCC and our CDC for efficacy.
BI 1206 is currently being investigated outside of China in two phase one food studies. One is evaluating BI 1206 in combination with rituximab for the treatment of non-Hodgkin's lymphoma, which includes patients with follicular, mantle cell, and marginal zone lymphomas who have relapsed or are refractory to rituximab.
A second phase 1-2 study is investigating BI 1206 in combination.
with the anti-PD-1 therapy, Keytruda.
otherwise known as parambrolismat, in solid tumors.
The NMPA granted the BI-1206 CTA approval in December of 2021. Earlier this year, the US FDA granted orphan drug status for BI-1206 for the treatment of follicular lymphoma, the most common form of slow growing lymphoma.
slow growing non-Hodgkin lymphoma.
Together with BiolinBent, we plan to continue to develop BI-1206 in both the hematological malignancies and solid tumors with CAHSA responsible for the development and commercialization in Greater China. For more information, visit www.biolinbent.com
Our lead indication will be DI 1206 in combination with rituximab.
in patients with relapsed, refractory, non-Hodgkin's lymphoma. The BI1206 trial has been initiated, and we expect to dose the first patient in the second half of this year.
No, worried about CB5339.
DB5339 represents a promising new agent for selectively targeting the VCP-P97 target in cancers and is a complementary addition to our pipeline of hematology oncology assets.
Together with our partner Cleve Therapeutics, we plan to develop CD5339.
in acute myelogenous leukemia as the potential initial indication, with CASIA responsible for development and commercialization in Greater China.
The CB5339 CTA application for the multiple myeloma indication is in progress after receiving initial input.
on the IND package.
from the China Center for Drug Evaluation.
Our partner, Cleve Therapeutics, is responsible for the ex-China development of CB5339 and is evaluating the molecule in a Phase 1 clinical trial in patients with AML and myelodysplastic syndrome.
We are excited by the
joint development of CD 539 with our focus on helping to accelerate the development program by initiating trials for the current and potential new indications in China.
Now for a short discussion on CID 103.
CID 103 is a fully human IGT1 anti-CD38 monoclonal antibody, recognizing a unique epitope that has demonstrated encouraging preclinical and safety profile compared to other anti-CD38 monoclonal antibodies.
Cassie maintains exclusive global rights and is developing CID 103 for the treatment of patients with multiple myeloma.
In June 2021, we enrolled our first patient in a phase one dose escalation study.
The phase one study in patients with previously treated relapsed or refractory multiple myeloma is currently ongoing.
in France and in the UK.
The phase one trial is expected to generate valuable information and has the potential to provide early evidence of clinical activity in the treatment of patients with multiple myeloma.
Lastly, on Filetipa.
We're in the process of responding to the China Center for Drug Evaluation response of regulatory submissions for two indications.
This completes the update of our key pipeline assets.
I will now turn it over to Ray to provide an update on the financials.
Great.
Thank you, Alex.
Today, I will briefly summarize our financial results and provide key highlights for the second quarter of this year.
Revenues consist of product sales of EvoMela.
Revenue was $8.6 million for the quarter ended June 30, 2022. 19% of the increase compares to $7.2 million for the quarter ended June 30, 2021.
secondary to the COVID-19 lockdowns in the few of the major cities in China. Even my last second quarter revenue was flat compared to the first quarter of 9 million in 2022.
Cost of revenues was $3.6 million for the quarter ended June 30, 2022, compared to $3 million for the same period last year, which includes the royalty payment of $1.7 million and $1.4 million for the same period in 2021.
We close this quarter with 18.9 million cash and cash equivalent.
In May, we entered into a business loan agreement with East West Bank to borrow a revolving line of credit up to US$10 million for working capital purpose.
By implementing management and budgetary control, we continue to be thoughtful on how we deploy our cash with a focus on creating shareholders value.
With that, I would like to now turn the call back over to the operator to open up the line for questions.
back over to the operator to open up the line for questions. Bye.
Thank you. We will now begin the question and answer session. To ask a question, we press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
At this time, we will pause momentarily to a sublet roster.
Our first question comes from Justin Vellan with BDIG. Please go ahead. Thank you.
Hi, Wei Wu. This is Vishal on for Justin. Thank you for taking our questions. Hi Justin.
I had two questions. The first is, if you could provide additional clarity on the challenges you are seeing due to COVID and if you believe this will be resolved in the near future. And the second question is, obviously, congrats on the deal we've seen struck with precision autoimmune therapeutics. You know, what did you find attractive about this deal and why did you choose precision autoimmune as a partner? Thank you.
Yeah, well actually Justin, the COVID situation because you know, Shanghai is a major part of our revenue.
Maybe after I finish, Larry can address this more specifically. Shanghai literally was shut down for two months and...
That probably is a major impact for our second quarter revenues.
We don't really know 100% for sure that this won't happen again.
But so far, at least in Shanghai, some of the major cities, the revenue is coming back. But the COVID situation is obviously quite unpredictable in this regard with the China policy on COVID control. So Larry, do you want to add a little bit on this question, the impact of COVID on our revenue?
Absolutely. Hi, Justin. As we were mentioning, I think the COVID-19 policy is a pretty
unpredictable in China and it's something like can happen again in Shanghai even though it's not impact our business further yet but sometimes we are ready and anytime and anything happened and again it's locked down and it's some other big cities it's like Guangzhou and Shenzhen is still is alert and the new wave of COVID-19 that is always and we are ready to deal with.
This is one of the key challenges I would say for the rest of the year and for predicting forecasts and sales and revenue. But the team is ready and for the city we can do better. That's why for the second quarter our business can continue to grow 19% compared to the same period that last few years.
But it's a lot of the challenges ahead we are ready to deal with.
Justin?
I think the second question, you know, just being-
Justin, do you think we satisfied your question for the first question?
Yes, that was great.
Yeah.
The good thing, you know, Justin is China is a big country. So, you know, even, you know, we still beat the quarter the previous year. That just means that.
You know it although it's one country, but the country itself is diversified enough
to sustain the business.
So to answer your second question, why do we do the precision autoimmune therapeutics?
We have, you know, the board and the senior management team, we have made a commitment that Cassie is going to focus on the hematology oncology market.
Because you know we have a wonderful commercial team we have you know marketing sales
We have wonderful connection with KOLs, but we are still a very small company with very limited financial resources.
So we are just going to focus on hematology, oncology space.
So in the auto-immune disease, we actually all know that CD38 have been used to treat many different auto-immune indications of labels. And the data is really, really quite encouraging. So we just have a local venture capital fund is willing to finance a persistent auto-immune company and they...
kind of falling in love with the CD38 story on the autoimmune space.
And we believe autoimmune diseases are just like cancer.
for instance, like diseases like lupus, ITP, they're really not one diseases. They are actually driven by totally different biology. Some of them are driven by D-cell biology. Some of them are driven by T-cell biology. Some of them are driven by early B-cell. Some of them are driven by more later stage plasma cell. We think actually the major technology breakthrough in this space is...
is genomic sequencing technology and also the next.
the single cell technology.
So we teamed up with professors in Teking University who is really, really at the leading edge of single cell analysis technology. So by contributing our CD38, we are being part of this brand new...
possessing autoimmune indications.
We think this is an extremely exciting blue ocean.
since the single cell technology really opened up a lot of new potential segments for autoimmune cell treatment. And clearly, our CD38 is almost finishing phase one studies and we so far like our data. So we have no infusion reaction, even has pretty high dose. And so with additional financing from new investors.
Cassie does not need to bear the burden of clinical development for these drugs for CD38.
in autoimmune diseases. But the new call will spend the money to develop autoimmune indication, which could actually help our ophthalmology, oncology indication.
That's why we decided to do this deal.
Great, thank you so much.
And we also will receive about $10 million off on payment, which is significant for Kathy today's depressed.
you know capital market and with this ten million dollars we actually got a very low interest interest rate long from east west bank
and we have, you know, existing cash.
We think we are pretty well financed.
well into 2023.
Right, makes sense. Thank you.
Our next question comes from
Laylin Gochel with Oppenheimer. Please go ahead.
Hi, good morning. Congratulations on the progress and thank you for taking the questions. Good questions from me.
First is, as we anticipate the availability of CNCC19, I wanted to ask, to the extent that you would have any visibility,
what the timing could be on potential end URL listings.
Does the NDRL consider editions only once a year or is there a certain frequency or can these be made ad hoc?
Are there any activities you can do to increase the expediency or the likelihood of the NDRL? And then my second question would be, you know, if you look...
In the literature there's evidence of many many anti-CD-19 cell therapy, CAR T cell therapies that are you know being looked at in China. I think you know many of them probably academically in addition to yours and you know the pharma's. I'm just wondering what what the status of those would are in terms of commercial application.
Should we think about those as being also...
competitive with yours at some point or do you think
government would would maybe shut down
you know, the ability of those to be used.
once we have CNCT on the market. Thank you.
Yeah, Leland, thank you so much. CNCT, we're still, you know, I mean with all indications, Juventus is still on track to file the NBA in 2022.
So that's the, you know, that's what we have been always saying that, you know, before end of 22, we investors should expecting to see a gervantish MDA firing. The approval is most likely going to happen, you know, if the CDE agrees with our data, the approval is most likely going to be happening in 2023.
There are already two party 19 approved in China, all imported from USA. One is Kaya's party 19, so it's Fushi Kai's and Wuxi Juno's party 19 is also approved.
But they are significantly priced at around 1.2 million IMD. It's about close to 200,000 US dollars.
which at that price point is really only, you know, kind of available to the very high end climb base.
We, because our copy 19 is a Chinese domestically developed copy 19.
We believe our data is comparable, it's not more competitive, but our cost of manufacturing is significantly lower than US-produced CATph19 therapy.
So there is a, we think there will be a price advantage in China.
Secondly, because of the collaboration between
Kathy and and Gervantes. We already have a very experienced
commercial and sales team.
through the launch of IWAMALA.
So because the KOLs for Ebola are the same sets of KOLs
for copy 19 treatment.
We do believe that we are much prepared.
as a commercial channel for CNC 2019 in China.
So, you know, there might be additional drugs coming. You know, the consensus is, you know, it's probably not going to be more than four or five.
of the 2019 approval in China.
And we hopefully will be the number three, but the first domestic party 19 in China.
Leland, does that answer your question?
Yes, yes, thank you, that's helpful.
Yeah.
Again, as a reminder, if you have a question, please press star, then we want to be joined into the queue.
Our next question comes from Sean Lee with HC Vainwright. Please go ahead....
Good morning guys and thanks for taking my questions.
My first question is on the CAR T19. So with the upcoming results later this year and potentially approval next year, I was wondering are there any additional steps that need to be taken before you're able to launch this in terms of manufacturing or in terms of expanding your commercial structure? Thanks.
Hi, Sean. Can you repeat the last sentence? I couldn't catch it very well.
I was wondering, assuming that we get positive results this year and approval next year, are there any other steps that you or Juventus need to take before you're able to launch the product? For example, do you have to go through additional manufacturing checks or do you have to expand the commercial structure?
My understanding is we have sufficient manufacturing capacity for at least, for the first year, at least a five to a thousand patients.
which we don't expect the first year to exceed a thousand patients in the first four years. So we don't anticipate any manufacturing issues after approval.
Now, if our commercial team did such a great job, it's over a thousand patients.
we might actually have to invest into additional manufacturing capacities.
Great. For my second question on the clinical pipeline side, could you give us an idea of the timeline for data expectations for BI 1206 as well as the timeline for keypad development?
So, Sean, would you like to address that? Yes.
So Sean, this is Alex. On the final tipo, we're working with our partner Steve to address all of the recently received CDE questions. We anticipate submission shortly, and then it'll be a review process to hear back from CDE. We're optimistic that we will be able to address the vast majority of the questions in a timely fashion. Some will take a little longer.
secondary to the complexity of new analytics that has to be done.
but I would hope that we will have you know submission and feedback within the next four to six months.
on the BI-12-06. That program is moving forward. As I noted, the CTA has been approved in China. We have a very close collaboration with our colleagues at BioInvent. And the goal is to get the first patient in as expeditiously as possible.
as our ultimate goal is to participate with BioInvent in the future global registration study for the combination of BI 1206 plus your types of it.
I apologize, but to give you firm dates on some of these things we have not announced and that we would only do so in collaboration with BioInvent.
Fair enough. That's all I have. Thanks.
This concludes our question and answer session. I would like to turn the conference back over to Vadim for any closing remarks. Please go ahead, sir. Thank you,
Well, thank you again for joining today's call. There's no doubt in my mind that we are on the course in building a fundamentally strong biopharmaceutical company.
We look forward to leveraging our existing commercial infrastructure.
pursue pre-commercial launch activities for the KA-C-19 program, drive expanded pipeline progress.
continue to observe sturdy, even mellow revenues.
We thank each of you for your continued support in PASSE during this exciting period.
Operator, thank you. You may now conclude this call.
The conference has now concluded. Thank you for attending today's presentation. You may all now disconnect. Have a good day.
Thank you.