Q4 2022 Ibio Inc Earnings Call
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Okay.
Thank you for standing by and welcome to the eye by fiscal year 2022 results conference call. At this time, all participants are in a listen only mode.
After the Speakers' presentation there.
To ask a question at that time, Please press star one one when you touch tone telephone.
As a reminder, today's conference call is being recorded I would now.
I'd like turn the conference Mr. Stephen Kilmer Investor Relations. Please go ahead.
Thank you good afternoon, everyone before we begin I would like to remind you that during this call. The company will be making forward looking statements regarding our current expectations and projections about future events that are subject to rest of uncertainties reference to these risks and uncertainties are made in today's press release and disclosed in detail in the Companys periodically.
And current filings with the U S Securities and Exchange Commission.
No forward looking statements can be guaranteed and actual results may differ from the results discussed in the statements information on this conference call is provided only as of today and we undertake no obligation to update any forward looking statements made on this call on account of new information future events or otherwise, except as required by law.
On the call today, representing the company are Mr. Thomas <unk>, Chief Executive Officer, Martin Brenner, Bio's, Chief Scientific officer, and Rod loves the company's chief financial and business Officer.
With that said I'll now turn the call over to Tom.
Thanks, Steve Hello, everyone and thanks for joining us today I'd like to focus on our recent acquisition of rubric and the potential resulting opportunities ahead for <unk>.
I'll, then turn the call over to Martin to provide a pipeline update and additional color on the rubric acquisition, followed by Rob's financial update.
We believe the rubric transaction, we announced last week is transformative for <unk>.
Broadly speaking this acquisition will enable us to accelerate our mission to bring more immuno therapies to the clinic faster.
Specifically, we have added a proprietary computational biology platform that has a demonstrated ability to more precisely identify molecules that have the potential to address hard to treat cancers and other diseases.
The rubric acquisition includes several components.
The first is aerobics drug discovery platform, which incorporates machine learning tools or artificial intelligence at its core.
This is a patented system that uses AI to identify design and create <unk> models of unique binding sites or epitopes that may exist on cancer immune cells.
We can then use these unique models to facilitate the discovery of antibody drug candidates for epitopes that have proven challenging for standard screening and development techniques.
The second element of the acquisition are all rights to the two candidates we previously licensed from rubric.
That includes high by a 101.
<unk> sparing anti CD 25 antibody for depletion of regulatory T cells.
As one of the few companies with such a molecule in development and the data. We've published today, we remain excited for the potential of <unk> hundred one as both monotherapy as well as in combination with checkpoint inhibitors.
The other previously licensed candidate for <unk> is what we refer to as target checks.
Target <unk> was discovered and modeled as part of our joint development agreement with <unk>.
It was identified late last year using the discovery engine and has advanced quickly through the early development stages relative to traditional approaches.
The final element of the transaction is the acquisition of four new pipeline assets.
These include three promising immuno oncology candidates.
The partnership ready PD, one agonist designed for autoimmune diseases.
In exchange for these assets, we made an upfront payment to array breakup approximately $1 million <unk> bio common.
Common stock.
Over the next five years, where <unk> will be eligible to receive from <unk> up to $5 million in development milestones to be paid in common stock or cash or sole discretion.
I'd like to note that the rubric purchase agreement terminates and supersedes the previous agreements between the two companies.
That change eliminates all of <unk> obligations for development milestones fees and royalties associated with both current and future license Canada.
Caring robotics AI drug discovery engine with our existing platforms creates a biotech company with its own end to end discovery capabilities and an expanded pipeline of immunotherapy candidates.
We see this as an attractive opportunity to accelerate <unk> transformation into an immuno oncology focused discovery and development company with potential synergies with our existing fast farming and glad you're peering platforms.
Given the significant and attractive opportunities in the immunotherapy space. We have started evaluating multiple options to extend our cash runway past our previous guidance of September 32023.
The options. We are considering include asset sales partnerships cost reductions and portfolio decisions.
Those may include actions such as our decision recently to discontinue <unk> clinical trials planning, while evaluating partnership options for the nucleocapsid antigen.
We're reviewing multiple non dilutive ways to raise additional capital in addition to dilutive financing if necessary.
I think it's prudent to point out that while we are confident we will be successful in extending the runway there is no guarantee of that.
Now I'd like to turn the call over to our Chief Scientific Officer, Martin Brenner, who will provide us with more detailed information on the rubric transaction as well as an update on our pipeline drug candidates <unk>.
Martin.
Thank you Tom.
Today I'm excited to share specific details about group breaks AI driven discovery engine I bio acquired last week I will also provide an update on our lead pipeline program I buy a 101 and our COVID-19 vaccine candidate <unk> 202.
We believe the acquisition of rubrics AI powered discovery platform significantly expense <unk> ability to identify and develop monoclonal antibody drugs against truck targets, either undruggable or posted daunting challenge for traditional monoclonal antibody platforms. Therefore, this makes marks a significant step towards achieving it.
Strategic intent to become a drug discovery and development focused biotechnology company.
D. AI discovery platform is built on a foundation of three modules that seamlessly integrate to solve the challenges of finding medicines against heart to drug targets.
First the technology combines computational biology in three D modeling to identify and optimize stable artificial epitopes epitopes are small but important regions of targeted proteins.
Artificial epitopes mimic the exact shape and form of natural human epitopes by selectively targeting those human epitopes. The most specific antibodies can be identified which is usually lost or easily overlooked when the entire target protein is being used.
Then the epitopes can be used in two ways to identify antibodies. One is banking uniting animals, which then produce antibodies against them.
The ways much faster and more efficient and uses rubrics proprietary antibody library called rubric Q.
<unk> is a broadly diverse fully human antibody library that has implied machine learning algorithms to eliminate sequence liabilities.
This means that molecule from this library inherently the hike rate of develop ability, which should save a significant amount of time into costly lead optimization stage.
Finally lead molecules are rapidly optimized using stable Hugh and AI enabled antibody optimization tool.
A typical brute force approach to improve our lead molecule is to individually exchange many of the antibodies building blocks to generate a multitude of molecules for characterization, which is expensive and time consuming.
Stable shoe is designed to be able to predict which specific building blocks of our molecules should be exchanged to improve our lead candidates potency efficacy and manufacturer ability the lead up to my face to face with streamlined which should save both time and cost.
All three modules of the AI platform have already clearly demonstrated their value with <unk> pipeline target six a mutated form of the protein expressed in a number of tumors that discovery engine enabled the rapid identification of antibodies that selectively bind the mutated protein without binding the wild type version, which is more common expressed in <unk>.
LTE tissue.
Due to the unique characteristics of the AI discovery engine the program could expeditiously be advanced from the early discovery to the late discovery stage and could soon be advancing into in vivo in vivo proof of concept.
We also and we have also acquired three promising immuno oncology programs plus a PD one agonist program potentially for serious autoimmune diseases. All programs have been developed with the AI platform technology and while two of immuno oncology programs are in early discovery, the PD, one asset and one immuno oncology program have already.
Progressed into the late discovery stage and <unk> is preparing to conduct in vivo proof of concept studies for each program.
I'll now turn to an update on our development pipeline, starting with <unk> hundred one our lead immuno oncology candidate.
Our pre IND studies had been progressing and we have recently submitted a pre IND package, if I buy a 101 to the FDA as we continue to evaluate the best strategies for <unk> by a 100 one's development. We have updated our expected timing of an IND application filing with the FDA to occur in the first half of calendar 2024.
Moving now to our COVID-19 vaccine development program.
We previously reported the preclinical studies of <unk>, our nuclear capsid protein directed Sars Cov, two vaccine candidate demonstrated a robust antigen specific memory T cell response.
Unfortunately data from recent IND, enabling challenge studies immunologically naive hamsters showed I biotech two did not provide a protective effect.
Given these results we feel it's not prudent to move forward with the IND submission we had planned for this calendar year.
Despite this disappointing news we continue to believe there remains a need for a last dose and not the next dose of a COVID-19 vaccine.
Interestingly, our recent preclinical study published in the peer reviewed journal Science translational medicine, Similarly demonstrated that and only a explanation provided modest protection from Sars Cov. Two however, the study also showed that combining <unk> with as well and process and use more robust protection against both Delta and omicron variants.
S only vaccination.
In light of the challenge study data and I bias prospects to secure non diluted funding and all partnership opportunities for the program. We are evaluating next steps all proprietary antigen drug substance.
With the addition of the four new programs to our rapidly growing therapeutics pipeline through the Rupert transaction and as part of the overall evaluation. Tom mentioned earlier, we will also be conducting a comprehensive portfolio review to ensure that we manage our resources appropriately and stay focused on our goal to become a clinical stage company.
With that I will turn the call over to Rob to discuss our financial results.
Thanks, Martin I.
I will start by simply speaking to a few preliminary unaudited financial highlights that we announced earlier.
Revenues for fiscal year ended June 32022, or approximately $2 $4 million and essentially flat versus prior year.
R&D and G&A expenses for fiscal 2022 increased by approximately $7 $7 million and $12 $1 million, respectively over the comparable period in fiscal 2021.
This reflects the companys growing investment in its pipeline platform technologies employees and related infrastructure.
Hi bias consolidated net loss for the fiscal year ended June 32022, with approximately $53 million.
This increased loss of $27 $1 million compared to 2021.
Largely due to an increase in expenses incurred to support the company's business strategy.
Plus $10 $2 million in Fraunhofer USA settlement income in fiscal 2021 that did not recur in fiscal 2022.
This was partially offset by $1 $8 million in fraud, Hartford USA license revenue recognized in fiscal 2022.
We held cash cash equivalents and investments and debt securities of approximately $39 $5 million as of June 32022.
The company and its auditors have concluded there is substantial doubt about the company's ability to continue as a going concern.
We are currently evaluating a number of potential options to expand our cash runway, which you also mentioned in last week's press release.
Regardless of whether we are able to reduce our burn rate or seller out license certain assets or parts of the business. Our business, we will need to raise additional capital in order to fully execute our longer term business plans.
But we believe it is likely we will be able to implement one or more options that will extend our cash runway for 12 months or more from today. However, there can be no assurance that we will be successful in implementing any of the options that we're evaluating.
Before I turn it back to Tom for closing remarks, I'd like to mention our board's approval of our previously announced one for 25 reverse stock split of our common shares becoming effective on October seven 2022.
On Monday October 10, 2020 to our common stock will begin trading on a post reverse split basis.
And why Etsy American under the same symbol bye bye.
With that I will now turn the call back over to Tom Tom.
Thanks, Rob we're excited with what the future holds try buyout, particularly as we created a differentiated technology enabled drug discovery capability for our business.
With a clear focus on achieving our mission to bring more and better immuno therapies to the clinic faster our evaluation of the business and extension of our cash runway remains critical to our future success.
Note that while it is premature for us to provide any additional color on today's call about our review of cash runway extension options. We look forward to updating our stakeholders as we move forward with our continued transformation into an immuno oncology focused company.
With that operator, please open up the call for questions.
Thank you again, ladies and gentlemen, if you'd like to ask a question. Please press star one one on your Touchstone telephone against the ask a question. Please press star One line one moment for our first question.
Thank you. Our first question comes from Christian cluster of Cantor. Your line is open.
Hi, everyone. Thanks for taking my questions and hope you're all doing well first question I had is just from a timing perspective, what led you to this decision now to close on substantially all assets from rubric versus the original agreement that you had in place with Dannys does specifically I guess, what I'm trying to ask here is.
Was there any new information that came over this past year since that initial partnership further diligence on the platform that led to this expansion.
Yes, Kristen thanks for the question and indeed, the relationship as we've been running it for a year we did get.
<unk> is an experience with the platform as part of the joint Discovery agreement, So as part of what.
What we originally established was not only the.
The license to <unk> hundred one but.
Five seat licenses, if you will so five additional berberich discovery engine.
Opportunities to license over the coming five years, so as we referenced that target to six that we've been talking about was the first one.
We jointly worked on together and got those vary.
Favorable results. So we got to see the strength of the platform in our own hands and I'll, let Martin comment on this a little bit further so that certainly and forms.
Our diligence it was just real world experience with the platform.
Certainly we saw some of the progress that they were making.
With their own other molecules as well as with other partners in this space, but Martin any additional color there.
Yes, Kristen hi.
What Tom mentioned is.
Spot on we have been working obviously with rubric for the last year and our target six has been progressing really nicely. So we have proof of concept of the technology platform validating it to at least a preclinical stage.
It gave us more confidence as well to move on.
And then Christi Needless to say.
What we've seen in some of the work that we published on <unk> 101 here, especially over the summer.
Gave us some great confidence with the platform the development capabilities and the teams have been working well together here over the course of the past year as part of the collaboration so the opportunity to have four rubrics computational biologists join us and advance to work.
An attractive opportunity so that was able to come together.
Nicely over the course of the past several months. So that's why the timing sorted out the way it did.
Okay. Thanks for that and then once the first asset <unk> hundred one enters the clinic how are.
Are you thinking about the cadence of the other programs, though I understand of course that you haven't disclosed to us some of these other io targets, but I guess, how much work around this first candidate is going to be able to synergize with the other programs.
Right well, that's part of the portfolio review that Mark alluded to so to speak.
Cause of <unk> and the significant opportunities that we see for that there are a number of options that we're evaluating their two prospectively.
Increase the funding for that program is our lead asset.
But we're doing a review of the others because there are attractive candidates that are in there. So we haven't yet made the decision fully stack ranking of each one of the candidates and how much.
What we wanted to allocate in terms of resources.
The attractiveness of <unk> 101 remains.
Foremost in our thinking here and where.
Cleaning the assessment and the prioritization, but part of this obviously goes to cash.
Cash management that we've talked about a couple of times here on the call.
And we want to make sure that we're moving aggressively to get what I wanted to the clinic at the same time that we're creating the opportunities that we see out there for the other assets that we just added to the portfolio.
Got it thanks, Tom and Martin.
Thank you thanks Christy.
Our next question comes from Roy Buchanan of JMP Securities. Your line is open.
Okay, and I guess, the first one kind of follow up on the last one just what can you detail what remains to be done.
Submitting the IND for <unk> 101, and are you going as fast as you can with that or are you're capital constrained ahead of making these.
Decisions and then I guess for target six.
PD, one agonist and the other oncology asset that Martin mentioned could be an in vivo proof of concept soon.
I guess can you put maybe a range on how soon as soon.
I kind of wanted to benchmark that against these financing options. Thanks.
Alright. Thanks for the question Roy I think that all goes to the resource allocation for the portfolio altogether. So we are evaluating a couple of options of course, we only just completed the <unk> transaction a couple of weeks ago. So.
Our resource allocations to the discovery platform itself necessarily then as far as the assets are concerned there is a couple of opportunities with <unk> 101. So we are evaluating the clinical strategy. So to your good question are we going as fast as we can.
Yes, but then at the same time, we're seeing opportunities here and as you know there is a leading major global biopharmaceutical company.
Driving forward and as sort of first into the clinic.
Their own version of an IL two sparing any CD 25 molecule and we're learning a lot.
What they're seeing in the clinic as well as what.
We're intending to do so it's important for us to be looking at.
The opportunities that we have here or I buy a 101 as a mono therapy, but then also taking a look at other options that we have and do we or do we not double down.
In looking at perhaps opportunities in combination with checkpoint inhibitors. So we're taking a moment here to evaluate that as we recently.
Picked up the asset and now wholly owned it and then four.
PD one.
We do think that there is opportunities for that now that that when you see us make reference to as partner ready.
And we do see the immunotherapy in the autoimmune space as being attractive prospectively, there may be partners for that.
It's well enough advance, although albeit these are all <unk>.
Fairly early stage.
With with what we have at this particular moment, we do think that there could be some interest and so we'll be looking to see about prospective partners in the autoimmune space for PD, one as well as doing the portfolio review and saying if it would make more sense for us to invest ourselves.
And trying to drive that one forward.
Makes sense.
Okay that makes sense.
Thank you.
Maybe reading between the lines, maybe I assume everything's on the table, but maybe ex U S partnerships for 101 or something you're exploring.
Yes, I think for US I mean, 101, where at the moment and focused on moving it forward to the clinic ourselves, but to your good point and what we said during the call were.
Looking for both non dilutive.
Well, primarily non dilutive partnerships for certain of the assets to move them forward and accelerate past the clinic.
But at the moment I buy a 101, we're planning on moving that forward as a mono therapy ourselves.
And with certain other molecules were exploring the opportunity opportunities for partnerships like you say, there could be regional or global or disease state.
Specific as we go but indeed all of those options are being considered.
Got it thank you.
Thank you.
Our next question comes from Philip Barnett Your line is open.
Thank you for taking my call.
While I speak for myself I think.
So speak for a lot of shareholders, who were very excited for you to come in and bring new life to <unk> bio, but it would've been really discouraged with the lack of transparency provided under your leadership you came in with messages of transparency and instead, we seem to have only received obfuscation omission in perpetual dragging a goal.
<unk>.
I really appreciate Mr. Brenner brief detail on our pipeline.
It feels like the first we've heard in years.
Also very interesting to know that we're requiring acquiring rubrics portfolio, rather than focusing on our own incredible pipeline, which had fibrosis in swine fever that rituxan have bio better that you said wasn't worth pursuing.
We've had so many collaborations and partnerships that have been announced over the years and none of them have gone anywhere we havent even received updates that Dave.
Or that they are continuing.
And then there's this wildly suspicious backdoor deal with Jim <unk>, I think you owe the shareholders an explanation.
That was that was incredible news.
Incredible I've never seen anything like it.
But what I really want to ask here is.
<unk> does not appear to be in financially good times now.
And I want.
I want to be respectful, but I also want to hold you to the fire here.
<unk> got a very nice salary and you recently received an option to get to 2 million shares.
Public company that's been.
<unk> reported a consolidated net loss of $53 million.
I believe that leadership should benefit when times are good but times arent. Good right now so if you could speak to that I would really appreciate that thank you.
Okay.
Sure, Mr Barnett and ill.
I'll say first I mean in terms of transparency.
The premise there.
I would dare say I think we've been quite transparent a lot of our peer groups in fact don't even have conference calls.
Put out frequent updates and I think versus many of our many of our peers. We we certainly attempt to be quite transparent so.
That being said with regards to stock options and compensation and some of the rest and also we'll also mentioned with regards to transparency when.
When I came in with the company we initiated.
Our first conference call. So I did not have those in the past so.
Certainly made the effort to be transparent forthright and when there is bad or and or disappointing news to report like we have today.
There's no doubt we're extremely disappointed by how things played out with <unk>, two and I'd like to talk about that a little bit more in a moment.
And invite Martin to comment too.
But as <unk>.
Undoubtedly heard on previous calls barton's given updates each and every time.
On the portfolio and we've published around those and all of our documents so that said.
With regards to stock options of course.
That's incentive compensation for any executive in any company and we.
We want to benefit from those and if we're not adding value and driving things forward for our shareholders will that obviously stock prices affected so.
Everybody at <unk> has been working very hard to transform the company Youre.
You are probably aware of its status back in 2019.
And our efforts to move it forward and create a vibrant growing business and bring real value to shareholders patience and the rest is.
As our focus so we took an organization.
That was a had a CMO business.
That did not generate much in the way of revenues and made this attempt to go ahead and transform it and.
And move it forward.
And with that we started a couple of programs. We didn't have anything advanced in the clinic. So we decided to use some of the organization's capacity and capability to begin producing our own pipeline of products.
And so or therapeutic candidates I guess I should say so as those opportunities came forward.
We invested behind them in the case of I'll just come back to 202 to round out the response to your final question.
Well note that.
We have put ourselves in position to get in front of the FDA.
File the IND we.
We did somewhat unexpectedly get feedback that required the challenge study back in January .
And so if you'll recall at that time.
I suppose one could say well should.
Should the company invest.
Time money and resources in a COVID-19 vaccine when you had a couple of players out there already.
Form of Darren and Pfizer, who we.
We're doing just fine. Thank you. So I think a good case could have been made to say well why did we spend that money. It was a it was a pretty daunting challenge.
And the FDA was now requiring an extra staff and we had to try to move things forward with an animal model.
That may not may not be ideal for what we wanted to do but.
If youll recall.
That's a fair criticism, but if you'll recall at that time <unk> was raging and it didn't look like and we still don't believe well I'll speak for myself I still don't believe that.
Sure.
The case that a spike but frequently mutating spike vaccine is is the greatest solution here, but nevertheless, our team was able to do.
I think really excellent work in a.
Supply constrained environment for contract research laboratories, and some of the rest we were able to quite quickly pull together a study.
That would allow us to test out our nucleocapsid antigen.
And we thought that on its own it could provide some other protective effects and.
Quite honestly in a primate or a human it's possible that and then only vaccine could work. However, our data came back and in the animal model in which we tested we.
We did not get the protective effect, but we were looking for.
So as we signaled back in August even if it had been.
Excellent if one takes a look at.
The requirements to go into the clinic, how the market is shaping up well.
The pandemic is in the rest.
Combined with the technical data that we got back we needed to make a business decision on behalf of our shareholders in the company and we're certainly very disappointed because we did see a nice opportunity prospectively with government funding there was a call in fact for plant based.
Vaccine manufacturers too so I don't want to go on too long in response to your question. There was a lot in there, but just wanted to make the point that we're making both business and technical decisions.
Behalf of our shareholders.
Unfortunately, sometimes the biology doesn't work out and we have to make a tough call.
Which is what we did with 212, so I hope that addresses some of the points in your question and thanks Bart.
Thank you. Our next question comes from Juan Angel.
Billy Land group your line is open.
Hello, Mr BARDA sentiment.
What are you going to do to some what do you suggest to somebody that's down 80%.
Okay.
Hi.
Well I think in terms of the market sits.
And the macroeconomic environment that we're seeing there are many biotech stocks and others.
That are down that percentage.
The macroeconomic situation.
Biotechs generally for the better part of the year as I'm sure you've read and we've all seen.
Has been somewhat challenging.
So I think as always investors should do their due diligence and take market conditions into effect.
I think in the case of <unk> as an individual.
Our investment decision.
We remain excited about what we're doing in the field of immuno oncology and in particular.
With the <unk> hundred one candidate and we think that the space.
Pharma attack.
For AI, driven drug discovery remains an attractive one and we intend to build value for our shareholders.
With a.
And to end discovery capability that includes that technology and capability.
Thank you again, ladies and gentlemen, I'd like to ask a question. Please press star one on your techs tone telephone again to ask a question. Please press star one line one moment please.
One moment.
That's question one moment.
And I'm showing no further questions at this time, ladies and gentlemen. This does conclude today's conference. Thank you all for participating you may now disconnect have a great day.
The conference will begin shortly to raise Johan during Q&A, you can dial star one one.
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Okay.
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