Q2 2022 Navidea Biopharmaceuticals Inc Earnings Call and Business Update
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Yes.
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Greetings and welcome to the new video quarter, two 2022 earnings call and business update.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
And please note that this conference is being recorded.
I will now turn the conference over to Dr. Michael Rosell. Thank you Sir you may begin.
Thank you and thank you all for joining us here today.
This call is being webcast live on our website IR dot into video Dot com and a replay will be made available there.
There is an accompanying slide deck that is also being displayed following prepared remarks, we will be conducting a live question and answer session and the videos chair of its board of directors, Mr. Alex Capello, its vice chair, Mr. Kim Scott and its vice President of Finance and administration Erika Eves are joining me on the call today.
During the course of this conference call, we will be making forward looking statements regarding future events and the future performance of the company.
These events related to our business plans to develop new videos molecular diagnostics and immuno therapeutics, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters as well as the impact of the COVID-19 pandemic on the video business operations.
All of these statements are based on the beliefs and expectations of management as of today.
These statements involve certain assumptions risks and uncertainties and could cause actual results to differ materially.
We assume no obligation to revise or update forward looking statements, whether as a result of new information future events or otherwise.
<unk> should read carefully the risks and uncertainties described within the Safe Harbor section of our website as well as the risk factors included in the company's most recent quarterly and annual filing with the SEC.
With that I'd like to begin our update <unk>.
During the second quarter of 2022, and since we continue to work on financing for the company. We closed on our $2 5 million bridge loan from the company's Vice chair of the board of directors, Mr. Scott and last month, the company completed a rights offering with the investment banking arm of Maxim group.
The company received aggregate gross cash proceeds of approximately $6 2 million in the rights offering.
If exercised additional gross proceeds of up to $11 6 million, maybe received through the exercise of warrants issued in the offering.
The warrants are exercisable immediately expire five years from the date of issuance and have an exercise price of <unk> 50 per share.
We also received an accelerated reimbursement payment of $800000 for certain research and development expenses from our strategic partner, we continue to plan for additional capital raise in the coming months.
We have advanced our clinical trials in rheumatoid arthritis, as well as our pipeline and other diagnostic indications and in therapeutics. Overall, we've made good progress on our phase <unk> trial in rheumatoid arthritis or are a comparing imaging the biopsy and we announced the promising preliminary results and our ability to distinguish.
Fibroid paths type from the non fibroid in our first 11 evaluated patients.
These strong early results support our hypotheses and provide great data in support of <unk> imaging as a biomarker of CD <unk> six expression enjoying some patients with RA.
We also continue to enroll into the phase III and have recently opened up an additional nine sites for a total of 12 now open we.
We are also advancing our therapeutics and imaging applications through collaborative relationships with various well known institutions and investigators across the globe and we are growing and diligently maintaining the company's intellectual property.
The team here works extremely hard and efficiently and I'm very proud to be associated with this outstanding group of individuals.
You may have seen our recent release about the termination of the jubilant memorandum of understanding.
This memorandum carried with a binding terms of exclusivity such that we could not entertain discussions or offers from other parties for the rights to our potential commercial product in RA.
From the time of the original signing of the Mou to now we have continued to advance <unk> into the phase <unk> and phase III trials currently underway.
The ending of the exclusivity period is a significant opportunity to speak to potential partners with advanced data in hand.
In the capital royalty group case, we announced a ruling awarding <unk> attorney fees on their breach of contract claims against the video and macrophage therapeutics.
We are disappointed in the court's ruling and do not believe the law and the facts presented at the trial support. This ruling we are discussing our best course of action to pursue in response to the ruling.
As we've said in the recent past there are many things we're working on behind the scenes and we will provide you with updates as soon as we're able and as appropriate.
Now I'd like to provide more detail around the clinical updates.
I'll begin with progress in our rheumatoid arthritis program.
We continue to enroll into our phase III trial in <unk> as.
As I just mentioned, we recently announced that we have opened up nine new sites at the end of August and have enrolled 30 subjects to date.
We've done this with about 16 total site months of enrollment so our per site per month enrollment rate is significantly greater than the average.
The indications we are going for an all raw once again are one early prediction of treatment response to our new our first time anti TNF alpha therapy and to identification of <unk> patients with low level of localization of <unk>, who are less likely to respond to anti TNF Alpha therapy.
As we have discussed previously there is a large unmet need for reliable early predictor of whether or not a therapy is working in a patient with all array because if a drug is not working the patient's disease is not being treated and this can lead to long term health consequences, along with unnecessary high drug costs for ineffective therapies that bring with them.
Possible side effects.
Our phase III trial will establish the ability of technetium 99 am till manifest imaging to serve as an early predictor of treatment response in patients switching to an anti TNF alpha therapy addressing this unmet medical need.
And Nab $3 32, our comparison study of <unk> imaging to joined biopsy.
This trial remains an active recruitment as we've announced and discussed previously the preliminary results of this trial are promising.
Our aim is to recruit patients with each of the three paths the types of array to obtain comparative imaging and pathology results and the trial is designed so that we enroll a minimum of four subjects in each of these three paso types of raw fibroid diffuse myeloid and lymphoid myeloid. So overall trial size has.
Been expected to range between 12 to 24.
To date, we have achieved the minimum or more in two out of three of the Paso type buckets with patients having at both our imaging enjoyed biopsies completed.
The primary objective of this study is to assess the relationship between joint specific <unk> uptake values and the path of biology of <unk> involve joint tissue.
<unk> have an individual or a patient's path to tight may be clinically important because it may predict to which are a therapy a patient is likely to respond.
There is a growing body of literature, suggesting that those patients with the fibroid type of array are much less responsive to the anti TNF alpha drugs.
And so it means of determining whether or not a patient has this particular path to type. It is seen as extremely important to a number of key opinion leaders in rheumatology.
As of this time, there is no reliable way of assessing a patient's pass the type of raw other than by doing an invasive biopsy and we have hypothesized that <unk> could provide this information.
We previously discussed those preliminary results that I mentioned on the first 11 patients.
These results indicated that <unk> uptake in RA inflamed joints is able to discretely differentiate patients with the fibroid Pathetique I E. Those with low macrophage involvement from those having either the diffuse myeloid or the lintel myeloid path of types of raw I E. Those with high macrophage involvement.
Seven of the subjects had relatively low levels of <unk> uptake all seven of these subjects were found to have the fibroid Pathet type.
Of the remaining four subjects three had the diffused myeloid path of type and one had the lymphoma alloyed.
Furthermore, those subjects with either one of these two paths the types had on average more than three times. The <unk> uptake is the average subject with the fibroid path to tight.
So we have been able to clearly classify patients as either fibroid or non fibroid based on our imaging results taken before the biopsy and those 11 cases.
These data also provides support for one of our indications in the phase III trial, the ability to predict from a baseline scan alone whether a patient is likely to receive a meaningful clinically meaningful clinical benefit from an anti TNF alpha therapy since as I mentioned, there is increasing evidence that if a patient has a fibroid path of type of array there are less.
Likely to receive significant clinical benefit from anti TNF Alpha therapy.
You might recall that in our previously completed phase <unk> study now $3 31 that contain the pilot arm looking at the efficacy of <unk> imaging at early prediction of treatment response.
Patients exhibiting a low level of <unk> uptake in their joints on their baseline scan had an almost 90% non response rates to anti TNF Alpha therapy, using a clinical gold standard assessment.
You can look for these preliminary results to be presented at an upcoming conference along with full study results from this previous phase <unk> study Nab $3 31.
Finally, these biopsy trials are notoriously slow recruiting but in fact, our recruitment rate over our number of sites is faster than what our lead Pi indicated he would expect.
Specifically in our planning phase we were told that if we could open 10 sites for recruitment we could achieve our enrollment figures in about 18 months due in large part to resources as well as COVID-19 in sight reopening issues, we have only been able to open three to date for enrolment from.
From the opening of our first of three sites to now is 18 months.
As usual the clinical operations team has done a great job at exceeding expectations, where we've almost completed enrollment in the same time period with roughly a third of the sites.
We continue to make very good progress in automating the image quantification as well, which will have significant benefit for the commercial product. We have the letter of intent and continue to work closely with MIM software on a full agreement for them to be our commercial partner for image quantification of <unk> imaging in RA once again.
As a leading medical image software company based in Cleveland with a large footprint in the nuclear medicine space. They completed a pilot study using data from our trials demonstrating that they can develop a fully automated application that can robustly reproduce our quantitative imaging results using our proprietary algorithm.
This will be important for rollout of a commercial product the ability to perform the quantitative reads rapidly and reproducible and at large scale through automated means is critical to large scale use of <unk> for rheumatoid arthritis.
Keep in mind that all of this the imaging analysis methodology as well as the data upon which it is built including the normative database you have heard us discuss before is not only critical to deriving the most accurate insensitive objective read of our images, but it also serves as a significant barrier to entry to possible competitors in this space.
We will continue to work with them to finalize the terms of the partnership and we will make an announcement when done.
In other areas of our diagnostics pipeline development and cardiovascular disease. The group at Massachusetts General Hospital in Boston has published the results of the investigator initiated atherosclerotic plaque imaging study that we help to support.
The data are promising in terms of localization of <unk> to sites of atherosclerotic plaque and were in line with what was reported in the pilot study, we co published with them previously.
We press released the publication and you can find reference to it there.
Preclinical studies on gallium 68, <unk> for pet imaging and related next generation manifest imaging agents have progressed significantly through internal work at <unk> and through extramural collaborations with researchers at the University of Alabama at Birmingham or UAV.
We have completed work on our NIH funded preclinical studies for evaluating gallium 68, <unk> and various new imaging agents similar to <unk> in a mouse model of atherosclerosis.
Work on another important set of preclinical imaging studies was completed and presented at the recent society of nuclear Medicine, and molecular imaging meeting and the manuscript is currently in peer review. This work looked at a method to increase the localization of our imaging agent to target tissues, while additional technology was designed to block <unk>.
Off target imaging agent localization to the liver, which is a major site of localization when <unk> is administered intravenously.
These studies were highly successful showing that we can dramatically increase localization of our new <unk> imaging agent to tumors, while simultaneously significantly blocking off target localization to the liver.
On the therapeutic assets front, we are advancing our candidates in the oncology and anti inflammatory spaces in preclinical studies.
Work on new drug delivery construct a new targeted payloads has progressed these new construct carrying new drug payloads that may be more effective than doxorubicin for beneficially altering the immune status of tumor macrophages for example.
Results in mouse models have demonstrated that when administered alone or in combination with another cancer drug. These therapeutic construct significantly reduce the rate of tumor growth. Some of these results covering new bisphosphonate payload constructs were recently presented at the tumor myeloid directed therapy summit meeting as well.
This work is about advancing to a lead candidate for macrophage macrophage phenotype altering drugs for oncology indications.
In vitro studies examining the ability of our dexamethasone construct for inflammatory indications have shown positive results as well demonstrating macrophage phenotype change. These constructs will soon be tested in preclinical models.
Preclinical studies are also ongoing and leishmaniasis.
<unk> is a vector borne chronic disease caused by a protozoan parasite that replicates in CD <unk> six positive macrophages. It is transmitted to humans through the bite of infected sandflies found in parts of the tropics subtropics in southern Europe Leishmaniasis is rare in the U S, but in more tropical countries, where the San.
Fly vectors are found it as a common serious and potentially life threatening disease.
We published work in 2017, demonstrating that high <unk> expressing macrophages play a role in the dominant form of the disease and recently, we have renewed preclinical studies with one of the world leaders in this area and have promising early results from two preclinical studies.
A third replication study is currently underway.
And so our therapeutic pipeline is robust and moving forward.
That brings me to our overall intellectual property front.
We received notification of issuance of patent from the U S. PTO for our patent application covering <unk> based therapeutic for leishmaniasis.
We continue to submit new provisional applications and work on our pending applications as well.
We have filed two new provisional patent applications, one describing a new degradable linker for dexamethasone in paclitaxel containing manifest therapeutic construct and the other describing novel bisphosphonate containing manifest construct using studies I mentioned a few minutes ago.
These constructs are being evaluated pre clinically for effects on macrophages and in animal models of oncology and inflammatory indications we.
We have filed five new provisional patents in total since December 30, <unk> 2021.
We also received a decision of grants for patent application in Japan for claims related to targeted delivery of a wide range of therapeutic payloads attached to manifest platform based construct using a degradable hydrazone linker.
So we have an active IP protection strategy that we believe will provide needed protections and rights to both our current diagnostic and therapeutic agents as well as to our next generation molecules and disease indications.
No on the drug manufacturing and supply front for both Lymphoseek and the <unk> product.
We have been we have been and continue to work with a new active pharmaceutical ingredient or API supplier as well as the final drug product supplier. We will keep you up to date as this progresses, but as of this time, we are advancing towards completion of these in readiness for clinical and commercial supply going forward.
On the Lymphoseek Europe and rest of the World front, you might have seen our recent press release announcing publication of the manuscript by an Australian investigator using <unk>. This was the first such study coming out of Australia, and this investigator and his colleagues are enthusiastic about using lymphoseek in Australia going forward.
We are also in early discussions about potentially license licensing lymphocyte Europe with possibilities for a long term relationship with other diagnostic pipeline products as well.
Prior challenges to penetrating that market, where pricing and competition, but with appropriate pricing in a number of studies demonstrating the strengths of lymphoseek in Sentinel lymph node indications, we feel there is an excellent opportunity there for the right partner.
These are just some of the highlights of the last quarter that we wanted to touch on for this update.
We remain largely focused on the RA pipeline, specifically the phase <unk> imaging to biopsy trial and the phase III.
While we also continue to support and push for progress on our other diagnostic and therapeutic indications.
As always I want to thank the team here for their tireless efforts to keep things moving and our network of clinical trial sites and academic research collaborators for all of their hard work.
Our strategy remains to advance our pipeline products to key inflection points and seek appropriate partnerships for commercialization and marketing.
So thank you with that I'd like to turn the call over to Erica for the financial updates Erika.
Thanks, Mike.
So a brief review of our <unk>.
Second quarter results total net revenues for the second quarter of 2022 were $57000 compared to $261000 for the same period in 2021.
Net revenues for the first half of 2022 were $57000 compared to 385000 for the same period in 2021.
The decrease was primarily due to the 2021 partial recovery of previously written off in 2015.
2021 receipt of reimbursement from Cardinal health of certain R&D costs decreased grant revenue related to grants from the NIH supporting minutes up development and decreased license revenue from transitional sales of Tim that except in Europe .
Okay.
Research and development expenses for the second quarter of 2022 were $1 7 million compared to $1 5 million for the same period in 2021.
R&D expenses for the first half of 2022 were $2 9 million compared to $2 7 million for the same period in 2021.
The increase was primarily due to increased employee compensation, including incentive based awards and increased recruiting fees offset by decreases in drug project expenses and regulatory consulting expenses.
Selling general and administrative expenses for the second quarter of 2022, or $1 3 million compared to $1 4 million for the same period in 2021 S.
SG&A expenses for the first half of 2022 were $3 1 million compared to $3 7 million for the same period in 2021.
Decreases in employee compensation, including fringe benefits and incentive based awards travel Investor Relations General office expenses facilities costs and franchise taxes were offset by increases in insurance direct your fees losses on the abandonment of certain intellectual property and legal and professional.
Mrs.
Okay.
The video net loss attributable to common stockholders for the second quarter of 2022 was $3 million or <unk> 10 per share compared to $2 7 million or <unk> <unk> per share for the same period in 2021.
<unk> net loss attributable to common stockholders for the first half of 2022 was $6 million or <unk> 20 per share compared to $5 6 million or <unk> 20 per share for the same period in 2021.
And then he ended the second quarter of 2022 was $328000 in cash and cash equivalents.
As Mike mentioned previously the company received aggregate gross cash proceeds of approximately $6 2 million in the recent rates offering.
And if exercised additional gross proceeds of up to $11 6 million maybe received through the exercise of warrants issued in the rights offering.
The company estimates that it currently has enough cash to continue operations into the first quarter of 2023.
And finally as previously disclosed the company is not currently in compliance with the NYSE Americans continued listing requirements related to stockholders' equity.
<unk> see American has accepted the Companys plan to regain compliance and the company continues to provide quarterly updates to NYSE as required under the plan.
The company has until July 28, 2023 to regain compliance with the stockholders' equity requirements.
And now I'd like to turn it back over to Mike.
Thank you Erica.
So we're now going to open it up for questions. Let me remind you that you have myself, the chief Medical Officer, Mike Rosell, Erika Eves VP of finance and administration as well as our chairman of the board, Alex Capello, and our Vice chair of the board Mr. Kim Scott on the line and as well as our.
<unk> relations person, Jeff Smith.
Thank you at this time, we will be conducting the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.
The Star Keys.
We ask that you please limit yourself to two questions and then rejoin the queue. If you have additional questions.
One moment, please while we poll for questions.
Our first question comes from the line of Michael Okuda, which which met with Maxim Group. Please proceed with your question.
Hey, guys. Thank you for taking my question.
So.
First I would like to see if you could just discuss a bit about your.
Partial plans in light of the termination of the Mou do blend and how the value of the program may have been impacted by the additional phase <unk> data as well as the market analysis, which are both emerge in the time since that was fine.
Thanks, Michael appreciate the question I think the answer is embedded within the question as I think you probably know very good so.
We've advanced the program as we've said and you just reiterated significantly since the original signing of that agreement. So that agreement was signed a couple of years ago, and we were if I recall correctly in the early stages of our first phase <unk> study. So we had the hypothesis with limited data in hand, and as such the.
Terms that were initially outlined.
While beneficial of course to the company.
Nowhere near what we'd be expecting to get at this stage of the of the program development. So since that time, we've completed that phase II b that data were supportive to move into the phase III, we met with the FDA and they concurred with this assessment. We've also as mentioned begun and have a.
The preliminary preliminary positive results to the phase <unk> study.
Giving us proof points for our mechanism of action of localization of <unk> to macrophages in the joints of patients with with our array as well as being able to identify.
Two distinct classes of Pathet types at least.
Which helps us along the way towards having a true biomarker of rheumatoid arthritis, noninvasive biomarker or a virtual biopsy. So with the with the advances that we've done we think we're in a much better position to have discussions and.
The concomitant.
Benefits of having advanced the program significantly as we discuss our partnership with.
Possible players or players in the field and possible partnerships.
So with that exclusivity we have we were unable as you know to even entertain.
Our discussions with other partners, who had been following us as we advanced our program. So now we're in a position where we can have those discussions entertain those and since we've advanced further we've derisked the program significantly and.
The further we go the more we de risk it assuming things keep going on the trajectory that they are going you know looking very positive.
That doesn't mean, we turn away an offer now but if.
If we can keep going towards NDA.
NDA submission. The further we go the better we are for where we might.
B in terms of the negotiation.
So looking back on lymphocytic for example, the deal with Cardinal was struck the FERC approval of lymphocytic in North America.
As well as in the in the EU, although cardinal is not in the EU or at least Theyre not a player in this space in the EU market.
But since we advanced it so far to approval and we're actually running it.
Doing the commercialization in the United States on our own we were able to get a heavy inflator and great value for Lymphoseek in North America and those negotiations. So we see something similar to that happening in the <unk> space. So I gave you a long winded answer hopefully there is something in there that's meaningful.
Okay. Thanks.
No I appreciate as much color as you can get.
I do like to I'd like to follow up on that point without getting into anything that you are unable to disclose I'd like to see if you could just review some who are.
Some of the potential commercial partners that might be a bit.
They are the big nuclear pharmacies, like Cardinal and jubilant, but are there any other big players in that space or is there potential for other companies, maybe those in inflammatory disease or diagnostics.
It would make them viable partner for the product.
Yeah, Great question. So so there are indeed, you've hit upon two of those of course.
And the nuclear pharmaceutical space. In addition to the two you mentioned for example, Theres curium that has a worldwide reach there's also Atlantis medical imaging in neuro and there are several others as well.
But also as you mentioned, we certainly would not close the door on something with a with a with a large pharma player who has.
Traction in the inflammatory space domain, and then rheumatoid arthritis, specifically or an interest in that area.
And as you said I can't reveal things, but all of these are possible opportunities for partnerships for us.
One way or another.
Alright. Thank you very much I. Appreciate you taking my question and then I'll hop back in the queue.
Sure. Thank you.
Thank you and our next question comes from the line of Fred Zaino with Keystone. Please proceed with your question.
Hey, how are you.
Just a couple of quick questions the $800000 payment that you received from.
At third party is there more to come and if so how much and then.
I believe there is a sales milestone cardinal payment somewhere in the $10 million.
Curious if you could share any color on that.
Yes, without breaking confidentiality I think I can say that there are so this was an accelerated payment and there is the potential for another milestone based payment in our R&D development.
Related to that agreement.
So that is something that could be coming down the road.
And in terms of the Cardinal milestone, we do receive their annual sales figures for <unk>.
<unk>, we are not at Liberty to disclose those but there is the potential when if and when they hit the $100 million in sales.
Net sales in one of their fiscal years that we would get a $10 million milestone and that remains a possibility and that's about all I can say right now.
Alright.
Any plans to hire a CEO .
Yes, so what what our strategy had been was too.
In consultation with a with a search firm that we had hired was to.
Wait until the company was sufficiently capitalized to recruit.
Seo.
Caliber that could then take us into the next level, so with where we are now the board will be having discussions and determine if that should be opened up now or or what the next steps should be.
One final question I appreciate everything.
Sure.
The cash gives you the runway into Q2 Q1, 2023, do you think theres any substantial and meaningful catalysts that.
You'll be able to achieve in that timeframe, maybe final results from 332 or or something there that.
It allows you to raise more capital.
Yeah, exactly I think you've hit upon one of the big ones so potential.
Potentially the closeout of $3 32, with our results there are milestones in the recruitment in the phase III of course, and Additionally, some milestones in the development of the therapeutic assays, but the two big ones are likely the NAFTA <unk> results and then advancement of the phase III, maybe the first.
50 or 100 patients.
Go more towards completion.
Great. Thanks, so much great job. Thank.
Thank you.
Thank you as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two if you would like to remove your question from the queue.
And our next question comes from the line of Mike ratio with a private Investor. Please proceed with your question.
Yes, thanks, Dr Rosenberg and Eric for all your hard work and your staffs that's really appreciate it.
Dr. Rosol, you said there've been 30 people in the phase III Dash 33 already.
And they've just been in the stores. They also started the 213 day assessments.
Yes, a handful of those partner semi pane, Mike by the way. Thanks for the question a handful of those are still are finalizing the screening, but theyre enrolled the majority of those have been.
Imaged in our proceeding.
We have.
Several of those this month are reaching their six month milestone.
And so that's a big event and there are.
Something on the order of 13 who've achieved the 12 week or three months milestone so things are progressing.
Sure.
Alright.
Follow up question on that do you see with opening those nine additional sites will that give you a rough runaway assuming the funding is there obviously.
Beyond your targets.
Mid 2023 early 2024.
Yes, that's a great question. We're always we have a very me aside we have a very high performing team and we have great sites that we've chosen for very good reasons. So as I've mentioned and alluded to in the past our recruitment rate is several fold one to two or I'm, sorry, two to three times, what the normal recruitment.
<unk> is Ferrara trials and in some cases, it's been four times at individual sites. So we know what we're doing we can open up the right sites and they're motivated to get patients. It's always been for us about resources.
<unk>.
That filters down to how many sites we can open with that said, we're pushing the envelope here, but these opening these 12 sites. If we can maintain these very high recruitment rates that we've seen in the phase III in our first three sites and already we know that several of those sites. We've just opened have identified.
Some cases, five or six patients theyre going to bring in in the next month, if those sites can Ken.
Ramp up quickly as it looks like they can because they have been preparing and recruit at an accelerated rate.
We could still be on target for those for that guidance.
Optimally, we'd like more funding in order to open up more sites because that is that's how we built that model, but we can.
We have these sites that are over performing and if they continue to do it.
Right now that is still achievable.
<unk>.
Our miles may vary right, but we will do our best but it's still within the ballpark with these 12 sites, especially if they if they keep going the way they look like they are starting.
Third question, and then I'll come back in the queue almost 332.
The last conference call. There was a lovely completed and there are several potential so any of those potentials progress chip to the biopsy stage or are you still screening on $3 32.
No we have more I just.
Debated, giving the numbers on those it becomes.
Accounting game and of course, we have to think about when we released the data carefully both related to kind of breaking the seal of the trial usually you do these app defined time points and then.
Don't want to speak too much on the data itself because one its not finalized and validated yet and two we want to.
Eventually publish these data and so the more you talk about data the less.
The more difficult it becomes to publish or at least in principle you are not supposed to be publishing data that you've discussed in great detail. So anyway with that said we have advanced some of those patients have been recruited into the trial and image Dan Biopsied. So we have we have more patients.
In terms of the buckets as I mentioned, we need we need to fill out one more of the of the Paso type buckets and then the plan is to look at those data and determine what we have found can we discriminate between the three paths types or is it a fibroid non fibroid, which is very important.
Then we'll look at the correlations of the macrophage number and density across all of those subjects with our imaging signal.
The more data we have for that the better.
On the LLS.
You said that you couldn't disclose.
The sales the Cardinal agreement, but in your presentations you had about what we're doing about 600000 injections do you still see that number accelerating at a reasonable rate on the number of injections in the U S.
The number is above that now.
We do know where that is it's it's it's not.
Got it.
It is not.
Great Lee above that number now, but it is it is it has gone up.
Hard to say, what's going to happen with the trajectory just from my looking at it.
There were there were things going on in Covid and supply chain issues that impacted the.
The medical field is at.
Large not just.
The nuclear medicine field or Sentinel lymph node assess.
Assessment field, although it did input implicate those are impact those.
With all that said it looks like the trajectory is good they are a good percentage of the market share, but it's hard to predict.
Is it plateauing or is it going up.
I've, probably said as much as I can say.
Yeah.
Thank you and our next question comes from the line of Michael <unk> with Maxim Group. Please proceed with your question.
Alright, Thank you for getting getting back to me I just had one more I'd like to follow up on the.
On the enrollment side for the phase threes.
If I'm interpreting from your slides correctly it seemed like there's a decent bit of variability in the total number.
It was 198 to $6 72.
Could you discuss what factors will contribute to the total size of the trial just related to how the phenotypes breakdown during your enrollment.
Great question.
What it relates to is the number of responders and non responders to the anti TNF Alpha therapeutics. So we need if you look at <unk>.
Sensitivity and specificity NPV and PPV truth tables, you can model. These out the number of samples you need in each one of those boxes.
And your your power of the study if you fill those boxes and with a certain number of patients all of that is independent of whatever we're doing here our diagnostic.
But relative to our diagnostic what's important is the number of anti TNF Alpha responders and non responders, we need about 100 in each of those each of those those two buckets, we need 100 non responders on a 100 responders. The reason theres, such a bit and thats why the bottom of it as 198.
We have a breakdown where we're at about 100 of each it obviously, it's not exactly 100, that's why it's not 200, but its close so if we have about 101 hundred and we have no. Dropouts then we're done and we can analyze the data.
If if the breakdown of the non responders to the responders is more like we've seen in our previous phase two b trial or like some of the literature, where there are many more non responders to the anti TNF then responders than our trial size will need to grow. So we modeled out kind of the worst case ratio and thats, how we get to <unk>.
<unk> hundred 72 and on top of that there is a 10% to 15% dropout rate.
Baked into that so the worst case is if we have maybe the worst ratio that has been seen for non responders to responders wed have a trial size of 672 best cases 100 to $100 for a total of 200 and if you look across all therapeutic trials in rheumatoid arthritis.
With anti TNF Alpha therapies at the ACR 50, a response level.
You get about a 40% on average responder rate and a 60% non responder so that with drop outs would give us about a 300 person trial.
So I've said a lot, but the range is in there for those reasons and what we're doing.
Michael is we're looking.
As we go we have the clinical outcomes right. So we're looking at the three months clinical outcome to give us an idea of where our trajectory is going to give us an idea of where we are and how the trial size.
Going to look at the end of the day, how many do we need to keep collecting recruiting we're looking at the three month as a surrogate of the six month.
Outcomes, so that we can.
Stopped recruiting into the trial earlier, rather than later when we know we think we know we've recruited enough of responders and non responders. So really it's all about the responders we need to have about 100 responders and single those out because more patients than not are not responders to <unk>.
Anti TNF Alpha so we're at the mercy of the drugs themselves.
But and we're going to monitor it as we go.
Alright. Thank you I really appreciate the additional insight on that yes youre.
Youre welcome.
And our next question comes from the line of Adam English a private Investor. Please proceed with your question.
Hey, dogs rosell, thanks for taking my call and congratulations to the team for your progress.
I wanted to go back.
My question goes back to some comments that were made in April of this year on the finance call that we had there were some very encouraging and positive comments made about work that was going on with the investment banker and.
Potentially.
Having the collateral that the company needed to make a loan to achieve.
Long term and large financing that we need to go forward.
And then we had the S. One, which really fell short of the 35 million that I believe is closer to the figure that's needed for the long term financing of all your prop.
Projects and pipeline.
I Wonder if you could tell me what has happened since April .
Now change your funding strategy of a larger loan in our larger capital.
Being brought into the company.
Sure Eddie Thanks for the question I'm going to I'll tackle it and then I'll open up the the.
The line too.
Board members as well if they want to chime in so indeed are.
What the board and management did as well.
Where we are.
A high level of due diligence.
Working closely with our investment banks.
And.
Looking at all possibilities for raising sufficient funds to have the capital to get us across the goal line.
The long and the short of it is for for various reasons, including the market.
All of this I'm relating to you from what we've been told by our investment bankers.
We are where we are now and so what the board has to do is now work with our investment bank.
And and close out the rest of the capital raise raise the rest of the money. So that we can have the resources to get ourselves, where we need to be.
So that will be in a great position to not just advance these products, but also to make big business partnership deals.
Get the return on the investment that folks like you observed.
The board I know has gone through a great deal of due diligence working with the investment bank and the forces at play.
And this is where we are now and they are now working closely.
Having many meetings and discussions about what are the next steps so with that said maybe.
If you want I'll, just say, Alex if you'd like to chime in and then maybe Kim.
To you.
I'll, let Jim respond.
<unk>.
We're dealing with all three investment banks, whereas.
Thanks, Alex.
This is Kim.
Yes, we I have been running with <unk>.
Financing and working with different banks to try and get the $35 million, which is totally funded all the way through.
The period of time to get the NDA submitted.
There has been a number of problems there were a number of problems since April Barton market.
Other other things that have happened that we probably can't really.
Express right now, but at this point.
We have the commitment of Maxim to finish out what they started and get us.
The additional funding.
Those talks will be.
And moving forward, but it was a good start to get $6 2 million.
Hopefully, we will get the balance of it.
In the near future.
Thanks Kim.
Thank you.
Another question if I may.
Sure.
Going to the third party assessment on the <unk>.
<unk> product and the <unk>.
Revenue charge.
Those charts show that.
Possible she received $41 million of revenue in 2024 and that program. Other charge that were published in June .
With your timeline on the <unk>.
D or the product wont get filed until late.
24, so has that revenue projections shifted due to some delays in <unk>.
The $3 33.
I mean, I mean, it could by the way I wouldn't call those delays and $3 30 and $3 33.
It's also it's an NDA submission.
The plan is is to has been or the guidance has been to have full enrollment in 2023. There is a six month tail on the trial folks right. So once they enroll we follow them for six months up to a maximum of 213 days as Mike Rocky Ali pointed out.
And then what we need to do then is right up the final data this depending on the team size and the resources, we can throw out at this takes anywhere from three to six months.
To get all of that together and to file for the NDA and then you have the NDA process. So there's a little bit of flex in there.
Because things may push a quarter or so here and there or more but as we've made these projections we've had our best.
We put our best foot forward in terms of predicting.
If there are discrepancies in those.
They came about over.
Some time in and.
Based on when we when we thought we could ramp up.
Opening of the trial sites, so that would get to your delay comment opening up the maximum number. So yes. There is some there is some flex in those if they don't exactly align its because over time things might shift a little only because we havent had the full amount of money to fully fan the flames.
As you pointed out that makes sense it yes, yes.
Hello.
Eddie This is Kim again I.
I just want to make it crystal clear that the board is.
<unk> committed to finish the phase II trials in phase II trial.
The phase III trial, and Thats, where our focus is.
The majority of our money is going.
And we continue to watch our <unk> and we continue to find money, where we can find money.
Light that $800000 it came in.
Mike worked really hard on that and so I think.
With the money.
This too shall pass and we will.
Look at this as just a little blip on the backend from a standpoint of.
Getting the phase III trial.
Going all the way to NDA and approval of the drug for which arthritis.
Got it got it.
One more question if I could Mike.
Sure.
July prospect had timeline.
It suggested that the $3 32 would complete in the third quarter, which that's just a few weeks from now.
And I noticed that the Queen Mary side still isn't recruiting are you still on track to complete 332 this month.
Yes, no at that.
It's a good question at that stage again based on the enrollment trajectory.
That was where things were looking but again these things can vary over time recruitment can can wax and wane and then we can't control who walks through the door. So we still want to fill in all of those buckets. We've also discussed frankly speaking we've discussed internally over whether a sufficient number has already been has already been.
Our crude so that we could stop the trial and.
Make do with the data we have because we already have a compelling story. We think however in order to meet the full objectives of the trial and we think this is important for several reasons, including discussions we're having with.
Possible partners, we think it's important to complete the trial as originally intended and so we just need to keep it going until we get all those people we need to get walking through the door. It's really hard to map. These trials out where not only can do not control recruitment, but you don't know who you got until you get them right and so that's the tricky.
Part so we're doing our best to to enroll as rapidly as we can I work with the sites. So does Rachel Hersey our lead of our clinical trial ops is in constant communication, we brainstormed with the <unk> of these sites recently to talk about recruitment and how it's looking in what we can do.
And as you mentioned the Queen Mary site.
Mentioned way back when when we were told that that site could be opened up quickly. It turned out and this was this is not an excuse but it was out of our it is out of our hands.
There were internal milestones and processes that they had to put in place that they're still working on finishing up and sometimes you get this with academic sites were their own.
Im not throwing them under the bus but their own internal processes are such that they have delays. They didnt, even anticipate so that site has been delayed.
For longer than I would like because of these internal processes and again, maybe too much info here, but I remember working at Novartis and even here in the video there have been academic sites that have taken us one and a half years to open up.
And at Novartis actually there were a couple of very famous sites, we stopped working with because we could never open them up and it isn't that isn't that amazing but in any event, we're working hard with the Queen Mary I'd like to get them opened so we've done all we can and we're asking them. If we can do anything more so we're going to keep running that trial until we finish it and I think.
It is going to pay dividends for the company and for investors like yourself. So please be patient with us.
Thank you and our next question comes from the line of Mike ratio a private Investor. Please proceed with your question.
This is a follow up Doctor rosell.
Can you provide any more color on the two oncology related preclinical trials ongoing that you're currently planning 2020 for earlier <unk>.
One is the <unk> two and <unk>.
Can you provide any more color on those.
Sure what we're doing is we're doing.
Right now we're doing preclinical studies to select our lead candidate to move first towards IND for first in human studies and so you've heard me mentioned the various new payloads, new construct we have the docks manifest construct that has some promising preliminary.
<unk> results.
There are reasons to believe that some of our other new newer therapeutics therapeutic payload construct will have would have and will have superior efficacy.
And so we've been advancing those as well pre clinically and we're getting very close to a phase where we can say this is our lead and these are our other candidates that we will also continue to advance behind those so.
Things are moving we will be looking to do some investor investigator initiated studies to help us advance towards IND and possibly investigator initiated <unk>. So.
So we will work closely with.
Research collaborators at well known institutions, who can help us get these into humans more rapidly and do those first human studies rapidly as well and then on the inflammatory side or in for inflammatory indications.
We've worked quite hard to optimize the dexamethasone containing construct so that we can then put those into animal models and.
In advance of those towards <unk> as well so and in addition, there's the leishmaniasis. So again we have.
I want to be clear that we're very focused in our strategy. We develop our lead candidates by going through chemistry in vitro in vivo towards human right. We're doing that in the oncology space. We're doing it in parallel in the inflammatory space and we have our studies ongoing as I mentioned in the leishmaniasis space for example.
And so that May also go towards an IND in the next one or two years as well depending on how these studies that we're currently carrying out go so when that slide was crafted it was really about taking an anti <unk>.
And immunotherapy for cancer to R&D as well as an anti inflammatory.
At the end of the day optimistically it might be more than one.
Immunotherapy with give.
Give or take a year between the two and maybe an anti inflammatory and maybe leishmaniasis.
There's quite a bit of potential with this molecule and what we can do with with it right. It's adaptable we target. This key player of the macrophage. We've shown we can alter the phenotype of the macrophages in ways that can have significant consequences for.
Therapeutic benefit we've shown this in preclinical world.
We continue to do it as you know and others know in general the macrophage.
<unk> is a hot area growing and big and small pharma are starting to pay more attention to the macrophage as a key player in disease.
In a wide variety of diseases and the cool thing is where this little company in Ohio that is really at the forefront of this of this hot area of medicine.
What we need are the resources to keep us at the forefront and move us forward.
We can.
Get to the goal line.
The way we'd like to.
Good.
Yes, I think that's great you know to me, having being a total novice, but studying the potential is so strong and like you said.
The external world is starting to wake up to no matter, where you look all the way from ratio Ing too.
Targeting but what would you think.
That is positioning you have people start knocking on your door, if not already in the near future.
Not positioning you for the winter.
Yes. It is yes, so when I first started Aetna video of the therapeutics, where we couldnt focus on them quite up quite as much as we wanted to or as much as we wanted to because of ongoing litigation.
Over the last couple of years, we've been in a much better position, where we can.
Released the.
Potential of our team onto those the potential of the molecule in this domain the therapeutic domain broadly so what's been happening is that we've been accumulating data, we're starting to have our coming out parties where were.
Presenting abstracts now.
Having conversations I can't get into details with with with players in this space and indeed, there are there is a growing recognition not just of the macrophage ports of the macrophage, but and what we can do in the domain of the macrophage.
As a company with our molecule so that's happening and it may not happen as quickly as any of us would like but it is happening and I think if we can keep our momentum going and maybe ramp it up.
Big things will happen sooner rather than later.
My personal opinion.
Yeah.
Okay. At this time, we have reached the end of the question and answer session and then I'll turn the call back over to Dr. Rosol for any closing remarks.
Thank you I'd like to thank you all for taking the time to participate in today's call and to ask for those of you who ask questions. Thank you for the questions.
<unk> remains dedicated to getting.
Getting things done here moving forward, we're working closely with our board of directors and we look forward to next discussions.
As the months the days and months ahead proceed. So thanks again and with that we'll close the call.
Yeah.
Thank you everyone that does conclude today's conference you may now disconnect. Your lines at this time. Thank you for your participation and have a great day.
Yeah.
[music].
Yeah.