Q3 2022 Theratechnologies Inc Earnings Call
Speaker 1: You
Speaker 2: investors listening to submit a question may do so by clicking on the Ask a Question link on the webcast platform.
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Speaker 2: I would like to remind everyone that this conference call is being recorded today, October 13, 2022, at 8.30 a.m. Eastern Time.
Speaker 2: I will now turn the call over to Ms. Alethee McDonald, Head of Investor Relations. Please go ahead, ma'am.
Speaker 3: Thank you, operator, and good morning, everyone. On the call today will be our President and Chief Executive Officer, Mr. Paul Levesque, and Chief Financial Officer, Mr. Philippe Dubuc. During the Q&A session, we will be joined by Dr. Christian Marsalais, Chief Medical Officer, and Mr. John Leisure, our Global Commercial Officer.
Speaker 3: Before we begin, I'd like to remind everyone that Sera Technology's remarks today contain forward-looking statements regarding its current and future plans, expectations, and intentions with respect to future events. Forward-looking statements are based on assumptions, and there are risks that results obtained by the company will differ materially from those assumptions.
Speaker 3: As such, the company cannot guarantee that any forward-looking statements will materialize and you are cautioned not to place undue reliance on them. We refer current and potential investors to the forward-looking information section of our management discussion and analysis issued this morning and available on CDAR at www.cdar.com and on EDGAR at www.scc.gov. Forward-looking statements represent their technology's expectations as of October 13th.
Speaker 3: With that, it is my pleasure to turn the conference over to Thera Technologies President and CEO Paul Levesque. Paul?
Speaker 4: Thanks, Alif. Hello everyone. Thank you for joining us today.
Speaker 4: Before we start our review of the current reporting period, I am proud to say that thus far this school 2022 has been an overwhelming success.
Speaker 4: Quantitatively, our performance to date stands as testimony to the company's hard work in transforming the business for both immediate and future growth. We have witnessed the organization come together as a team over the course of the last year, which is reflected in our numbers.
Speaker 4: We have put great consideration into IFAO technology's forward operating plan, which has been designed to unlock value in the legacy business.
Speaker 4: This will be especially impactful now that we have built our own sales teams and have focused activities in the United States.
Speaker 4: This includes investing in areas such as our medical affairs programs to facilitate the diagnosis of patients with lipodystrophy and the identification of patients with uncontrolled HIV viral load.
Speaker 4: We are also enhancing the patient experiences through improved methods of administration in new populations.
Speaker 4: In speaking of the patient experience, we wanted to highlight the recent FDA approval of Trigarzo for administration by 30 seconds IV push for heavily treated patients.
Speaker 4: This new method of administration reduces maintenance dose time from 15 minutes to 30 seconds.
Speaker 4: Not only is the safety and PK profile of Trigarzo IV push similar to that of IV infusion, but the new method of administration is designed to make maintenance dosing easier on patients and healthcare providers.
Speaker 4: Thus, we firmly believe that we will be able to further expand Trigarzo into more clinics and increase patient adherence at the same time.
Speaker 4: Additionally, the new intramuscular study for trigarzo is now fully enrolled and the last patient visit is scheduled for next month.
Speaker 4: We believe that IAM could provide an even more convenient method of administration.
Speaker 4: including access to patient treatment outside of the clinic, such as in the pharmacy settings.
Speaker 4: We are delighted in the fact that we can demonstrate a strong commitment to posturing superior patient experiences.
Speaker 4: The simple fact of the matter is that the market is ramping up quickly towards non-oral regiments.
Speaker 4: So, the approval of Trugarzo for ID push could not have come at a better time.
Speaker 4: Incidentally, it is our technology's announced data from two poster presentations at the Gates 2022 conference showing the potential for improved treatment regimens.
Speaker 4: The first presentation demonstrated pharmacokinetic modeling data supporting proof of concept that additional methods of administration could be viable.
Speaker 4: This is a big endorsement for IAM formulation administration for which the study will shortly be completed.
Speaker 4: Furthermore, the second presentation demonstrated how trogarzo in combination with another fully active agent could lead to simpler dosing regimens in heavily treated, experienced populations.
Speaker 4: This abstract was selected as the top 300 abstract by the conference.
Speaker 4: Moving to Egrifita SV now, which is the current formulation on the market. As previously announced, the FDA requested that the company carry out the human factors study with the ultimate goal of fine-tuning patient instruction for use.
Speaker 4: The study is ongoing and progressing well.
Speaker 4: It is ultimately our hope that this will improve patient adherence to treatment.
Speaker 4: As the FDA has asked us to do a human factor study for GRIFTA SV, we have proactively decided to do one for the F-based formulation as well. This study has been initiated and is running in near parallel to the SV study.
Speaker 4: Given the uncertainty regarding the supply of bacterial static water for injection, we have decided to take control of this situation and take matters into our own hands and have signed an agreement with a contract manufacturer to source the water ourselves.
Speaker 4: We believe this will firm up our timeline to launch the F8 formulation for lipodystrophy and ensure continuous supply of bacteriostatic water upon launch.
Speaker 4: In settling this go-forward strategy, we are currently on track to deliver the filing of this new F8 formulation in the fourth quarter of 2023, with a targeted launch date in the first quarter of 2024.
Speaker 4: Now, as a high-level overview of the reporting period, and with one more quarter to go, momentum in our business continues and the sales force that we have put in place is in full swing. As such, we are confident that we will deliver on revenue guidance between $79 and $82 million while achieving new heights in the new fiscal year.
Speaker 4: To be more specific on product performance, we are happy to report that year-to-date U.S. new growth is a blend at 18% in line with our objectives.
Speaker 4: Trogarzo revenues are up 17%, year-to-date Walle-Grip
Speaker 4: This financial performance is being driven by our strategies to facilitate both diagnosis for likelihood disreputable patients and patient identification for trogarzo.
Speaker 4: Philippe, as usual, will provide more insights into the reporting period's consolidated numbers on today's calls, which does include Europe .
Speaker 4: As noted on the second quarter call, we separately announced
Speaker 4: the signing of a $100 million non-dilutive credit agreement with Marathon Asset Management, a major institutional healthcare investor.
Speaker 4: Not only was this a vote of confidence for Thera,
Speaker 4: The financing also lifts the financial burden of having to repay a convertible debenture due in June 23, which in turn further allows us to execute our commercial and pipeline development plans unencumbered.
Speaker 4: And while the new growth associated to our commercial activities is very exciting, the future of our technologies remains with the advancement of our powerful SORT1 positive oncology platform.
Speaker 4: As such, we remain laser focused on recruiting patients and advancing the current BASC-IT trial.
Speaker 4: Earlier in the quarter, we provided an update on the dose escalation portion of TH1902 Phase 1 study and announced signs of efficacy that were observed in three heavily pretreated patients.
Speaker 4: The pre-clinical work that we are performing with our SORT1 positive technology is getting noticed by many in the industry.
Speaker 4: and was featured in the recognized journal, Pharmaceutics.
Speaker 4: The data was published as part of the publication special issue targeting drug resistance and metastatic pathways for cancer therapy.
Speaker 4: The publication highlighted the in vitro and in vivo efficacy of TH1902 in inhibiting ovarian and triple negative breast cancer stem-like cells.
Speaker 4: It also served to demonstrate potential mechanisms by which Th1902 can bypass underlying causes of resistance to dose attack cell contributing to treatment failure and disease recurrence.
Speaker 4: In prior studies, we have shown inhibition of vasculogenic mimicry in vitro, further adding to the body of evidence that SORT1 receptor in our peptide drug conjugate allows for enhanced benefits versus dose attack cell alone.
Speaker 4: This is really the first evidence of Th1902 targeting of human breast and ovarian cancer stem-like cells, both in vitro and in vivo preclinical models.
Speaker 4: Our excitement comes from the fact that the potential therapeutic benefits include sustained efficacy as cancer stem cells can act as hidden cancer cell reservoirs often associated with recurring cancers.
Speaker 4: Just yesterday, we announced that we have been selected to present new data showing high expression of SORT1 receptor in several cancer types.
Speaker 4: The data will be presented in a poster session at the 34th Joint Symposium of ENA, a highly recognized oncology conference that will take place at the end of the month in Barcelona, Venezuela on Wallace People's Day.
Speaker 4: We continue to believe that our program's unique mechanism of action.
Speaker 4: gives it an exceptional chance of succeeding where others have not been able to progress.
Speaker 4: On the TH1902 China Outlicensing and Partnership Front, discussions are moving forward as enrollment of the basket trial continues.
Speaker 4: Finally, as per previous communications, the NASH program remains on pause until we have identified a partner with the capabilities and resources to carry this program forward.
Speaker 4: By making partnering a condition to advancing the program, we are acting responsibly, these idea our investors, as this is a costly endeavor.
Speaker 4: Recent positive news in the field of NASH has rejuvenated interest from many investors.
Speaker 4: As one of the only late phase NASH companies with a mechanism of action that targets the dysregulation of fat accumulation in the ectopic compartments including the liver.
Speaker 4: We feel more optimistic than ever in finding a partner and seeing this program move forward.
Speaker 4: I would like to now pass the call to Philippe, our Chief Financial Officer.
Speaker 5: So I'll go over the financials before I turn the call over to the operator to
Speaker 5: The consolidated revenue for the three-month period ended August 31st, 2022 was $20.8 million compared to $17.9 million for the same year-ago period, representing an increase of 16.6% year-over-year.
Speaker 5: For the third quarter of fiscal 2022, net sales of a Grifita SV reached 12.9 million compared to 11.2 million in 2003 of the prior year, representing an increase of close to 15% due to the combined effect of a higher number of units sold and a higher net selling price.
Speaker 5: In the third quarter of fiscal 22, Trigar's overhead sales amounted to 7.9 million compared to 6.6 million for the same quarter of 2021, representing an
Speaker 5: Higher sales of trigarzo were the result of a stronger performance in the United States, where we recorded 26% growth compared to the same quarter of last year.
Speaker 5: But these were also hampered by lower sales in Europe as a result of a weaker overall price environment.
Speaker 5: In the period, cost of goods sold was $5.3 million compared to $4.3 million for the same quarter last year.
Speaker 5: The increase in cost of goods sold was mainly due to higher sales of both Egrifita SV and Trigarzo and were generally in line on a percentage basis.
Speaker 5: with prior periods costs.
Speaker 5: R&D expenses amounted to $8.4 million in the three-month period and on August 31, 2022, generally in line with expenses of $8.3 million for the same year-ago period.
Speaker 5: R&D spending for 2022 relates mostly to our medical affairs programs and studies, our oncology phase 1 study and other research, as well as spending on the intramuscular method of administration, or TRGARZO, which should be completed in the fourth quarter of 2022.
Speaker 5: R&D expenses also include some severance costs related to our realignment in Europe .
Speaker 5: Selling expenses amounted to $8.4 million for the second quarter of 2022, compared to $7.7 million for the same three month period last year.
Speaker 5: The increase in selling expenses also reflects one-time costs relating to the setting up of our internal field force in the US as well as spending on new initiatives implemented in 2022 to increase awareness of our products in the North American market.
Speaker 5: The increase is also explained by severance costs related to our decision to exit the European market for Trigarzo.
Speaker 5: G&A expenses in Q3 amounted to $4.2 million compared to $3.6 million reported in Q3 of last year. The increase in G&A expenses is largely due to increased overall business activities in 2022 as well as key hires in North America to support the implementation and management of our internal field force in the U.S.
Speaker 5: G&A expenses also included severance costs associated to our realignment in Europe .
Speaker 5: cost for the three months had been August 31st 2022 for 1.9 million compared to 2.3 million for the comparable period of 2021.
Speaker 5: Net finance costs in the third quarter of 2022 included interest of $990,000 on the senior convertible loans and the new term loan.
Speaker 5: announced in July of 2022 versus interest of 847,000 on the Commoditable Dementor in the third quarter of last year.
Speaker 5: That finance cost also included a decrease in expense of $500,000 in the third quarter compared to $612,000 in the comparable period in 2021.
Speaker 5: The remainder of the difference can be explained by a gain on the repurchase of the convertible to ventures in July as Well as a smaller foreign currency loss than in the same period last year.
Speaker 5: So given the increase in revenue and the relatively lower increase in expenses, net loss for the third quarter of 2022 amounted to $7.5 million compared to $9.5 million for the same period last year.
Speaker 5: The loss in 2022 is also impacted by non-recurring severance costs and fees related to the decision to exit the European market for Trigarzo of $900,000.
Speaker 5: We ended the third quarter of fiscal 2022 with thirty six and a half million dollars in cash, bonds and money market funds.
Speaker 5: The company believes that its cash position and future operating cash flows will be sufficient to finance operations and capital needs for at least the next 12 months from the consolidated statement of financial position date.
Speaker 5: As previously discussed, the company secured a new non-dilutive $100 million term loan facility with Marathon Asset Management, significantly strengthening our balance sheet.
Speaker 5: The first tranche of $40 million was drawn during the third quarter, which enabled us to buy back $30 million principal amount of convertible ventures.
Speaker 5: For the three month period ended August 31st 2022, cash flows used by operating activities were 4.4 million compared to 4.6 million for the
Speaker 5: During the quarter, changes in operating assets and liabilities had a positive impact on cash flow of $3.2 million, whereas in 2021, these had a positive impact of $1.5 million.
Speaker 5: These changes were mostly attributable to positive impacts from lower accounts receivables, lower inventories, and lower prepaid expenses.
Speaker 5: As Paul mentioned, we are confirming our fiscal 2022 revenue guidance to be in the range of $79 to $82 million for growth of the commercial portfolio to be in the range of 13 to 17% as compared
Speaker 5: So, with that Paul will be back for final comments, but first we will now open the call to take your questions.
Speaker 2: Thank you. If you would like to ask an audio question, please press star 1 on your touch-down phone at this time.
Speaker 2: If your question has already been addressed and you would like to remove yourself from queue, please press star then 2. And as a reminder, you may also ask questions via the webcast in the submitted question box.
Speaker 2: Today's first question comes from Andre Oudin with Research Capital. Please go ahead.
Speaker 6: Hi Paul, Philippe and Christian. Just had a couple questions here. Just looking at this quarter, in terms of sGNA, is that a good run rate going forward?
Speaker 5: Yeah, it should be generally in line for the next couple of quarters, yes.
Speaker 6: Okay, that's great. And then also just looking at the intramuscular formulation of Tregarzo, if this current study continues and it actually, the data looks good, would that study be sufficient to file a supplementary BLA?
Speaker 6: and when would you expect to file for FDA approval?
Speaker 4: Yeah, Andre, thank you for the question. I will ask Christian to tell you more about the timelines and the filing strategy. But obviously, you picked up that this can be significant for Trigarzo. We have indications that the IV push will be well received. And as I said, we see a significant trend developing for non-oral regiments. And I think that what we have coming up can be very significant. Christian, do you want to add a few things? Absolutely, Andre. The study that we're doing with the IM...
Speaker 6: is a copycat exactly the same as the study that was done for the IV push. Therefore, we know that it's been approved based on that one study with the IV push. And the end point is really the C-Truck, the truck level of the drug just before the following infusion.
Speaker 6: And the mathematical model or the PK model that was shown during AIDS conference showed great confidence that that story could be passed to.
Speaker 6: And when do we see that data then, Chris?
Speaker 6: around.
Speaker 7: When can we see the data? Yes.
Speaker 6: Well, the last patient that was in or the last dose will be in November . Shortly after that, we will have an idea about the results. We need to do the PK analysis. It takes a few weeks. Then, beginning of next year, we'll have the data, and we'll be ready to submit the file to the FDA.
Speaker 6: in the fall? No, no, at the beginning of next year. The last patient must visit is in November and the time to do the analysis. Then first quarter of next year we will have the data and we'll be able to submit to the FDA.
Speaker 6: That's great. And also just can I ask one other question here? So in terms of the annual WAC for both eGrift, could I maybe get the annual WAC price for eGrift and Trigarzo? That'd be great, if you have that handy.
Speaker 5: Well, I can give those to you. I don't have them handy, but for EgrifTA, it's $6,500 or so per month.
Speaker 5: Okay. And for Trigarzo, it's about 2700 per two week cycle. So you can...
Speaker 5: It's 2600 times 26.
Speaker 6: Perfect. Thank you.
Speaker 7: Thank you, Andre.
Speaker 4: And our next question today comes from Andrew Leno with National Bank. Please go ahead. Hi, good morning and thanks for taking my questions. I have a few. I just wanted to start first with the DH 1902. So the first question I had there, I was wondering if you had any thoughts about the
Speaker 4: If you can share with us on the patient recruitment, what is the target for that and where are we now?
Speaker 5: The target enrollment you mean for the phases of 1B?
Speaker 1: Yes.
Speaker 1: Okay.
Speaker 4: As you know, we have a basket trial now composed of 70 patients. We have targeted very specific tumors for which we know the SORT1 expression is high. We have a fast track designation which allows us to have ongoing discussion with the FDA. We could modify this basket trial along the way if we can. There are companies that are modifying your...
Speaker 4: Phase 1B trials in many, many different ways. But, Christian, we don't want to be releasing any specific numbers on recruitment at this time, but the target is to have 70 patients, correct? Absolutely. Then the recruitment is going well for the study and we're on target to complete the recruitment of the study by the end of the first quarter of next year. And the recruitment is going well.
Speaker 4: That's great to alert. Thank you. And the other question I had on 1902, I mean, you mentioned the partnerships discussions in China and –
Speaker 4: and how they're kind of tied to...
Speaker 4: to recruitment. I just wanted to kind of elucidate that a little bit. I mean, is it specifically patient recruitment level or is it more efficacy in results, right? Like, you're just trying to gauge when you could potentially have some news of that outlier discussion there.
Speaker 4: Well, if I understood your question while you're talking about Th1902 partnership.
Speaker 4: Yes, so the TH1902 partnership is for greater China only and we've had discussions with many, many good companies and obviously as we get closer to you know lining up the signs of efficacy some companies want to see more before obviously finalizing the deals but we still have companies interested and impressed with what we have you know published so far.
Speaker 4: So, we are in good shape for finding a partner for greater China. This is a good short-term way for us to create value for the enterprise. But at the same time, the way it goes is that the more data we'll publish, the higher will be the price for partnership. So we can't lose by producing good data. We can only win. Christian, I mean that's the bottom line, right? Absolutely, and the discussions are going well with the different...
Speaker 4: a partner for Greater China. This is a good short-term way for us to create value for the enterprise, but at the same time the way it goes is that the more data we'll publish, the higher will be the price for partnership. So we can't lose by producing good data. We can only win. Christian, I mean that's the bottom line, right? Absolutely, and the discussions are going well with the different potential partners.
Speaker 4: Philip, anything to add on this?
Speaker 7: you add on this? Thanks for your question.
Speaker 8: Great, thank you.
Speaker 8: A couple more on moving on to the NASH.
Speaker 8: the nice discussions that you're having.
Speaker 8: I mean any kind of color you can give in there in terms of what is being discussed with potential partners Is it potentially more work that needs to be done? or by
Speaker 8: or a combination of a partner or is it more regarding the F8 formulation and once it gets more resolved we can see some development there.
Speaker 4: Well, the NASHIP program, as I said, we've said for a couple of quarters now that we wanted to find a partner that would come with capabilities and resources. I said it in my speech, I think that this is the right way to act. We're acting in a very responsible way because the cost of running this trial is very significant. But what is very, very good is that you might have seen...
Speaker 4: additional interest in that NASH space developing in the last couple of months, which is great. This is what we anticipated, but a year ago that was not the same context. And as such, we feel that there is more interest now for a discussion in this NASH space, which is a high on meth medical need, one of the big markets left. And I think that any companies that will want to actually lean forward and identify late stage in everything else, or line-up in terms of sorts and holding, they will many people headala and look at bank Fine LUAG out a huge chain for witchcraft. We know we have a majority of people who are homicide-critical Loki solid company, which has the biggest loss out of || money, because of one farm from Mozeput and the differences
Speaker 4: compounds that are ready to go into the clinic will actually get to us. That's where we come in, that's where we're having more meetings with potential partners. I'm not sure I understood the last part of your question, but we've got all kinds of companies interested. Sometimes it's big pharma, sometimes it's small size firms. The point is that by having a more favorable context regarding is it possible to tip this over to an approval.
Speaker 4: It actually creates a positive environment for us to identify a partner. There have been, as you know, some competitors and biotechs that have published some favorable data recently in that space and I think that the context is way more favorable. So for us, there are all kinds of possibilities. You talked about the bacteriostatic water. That's very important because we need that at one point. We need continuous sourcing of that.
Speaker 4: You saw the key decisions that we made to be able to go ahead. For now, we are going to actually file with our FA formulation as soon as we have completed the human factor study. But at the same time, if we were to find a partner now, we could actually start to see the trial fairly fast, right? Absolutely. In terms of the trial, we are going to have to do a couple of things.
Speaker 6: We already have identified the CRO that can work with us and as soon as we may be announced shortly thereafter, a few months, six months thereafter, we can start a trial.
Speaker 4: So the point related to NASTAD, I want everyone to understand is that we are asking ourselves how can we create value with this program? There's got to be a way we could create value without having to actually spend a lot of dollars and I think that partnership is the way to go. How are we going to actually split the work? How are we going to actually address territories remains to be finalized, but I think that
Speaker 4: Having a context now where the mission is possible is creating a favourable environmental partnership.
Speaker 8: Okay, no, that's great color. Thank you. And one last for me is on the Trigarzo IV push. And a two-part question there. The first one, can the patient switch quickly, or is there a transition with the current formulation? And the second part of that question is when do you think we can expect to see contribution?
Speaker 8: or a larger contribution from the IV portion to the result.
Speaker 4: That's it. Thank you. Yeah, thank you for your question because we're very excited about this. The PDUFA date was October 3rd. We delivered on time. It's well done. And John , can you answer the question? So, switches, how do you foresee the transition? And the second is the overall contribution from the I-V Push.
Speaker 8: Yeah, thanks Paul. So it's the method of administration that's different the product itself. There's not a different skew. So physicians and patients have access to it right now and they can begin immediately. We have actually a POA plan next week. The Salesforce has been trained and so they're going to be out there communicating this information to physicians right away.
Speaker 8: Does that answer your question?
Speaker 5: The first part, are you able to share any kind of target?
Speaker 5: be the majority of the contribution or is that still in the...
Speaker 8: Yeah, I mean our research indicates that there will be increased utilization. Physicians and patients will have greater access to this, which will create an increase in market share, we believe. And that again can happen almost immediately because the product is out there now.
Speaker 6: Sorry, just one further explanation. At the moment, when you infuse it, it has to be diluted.
Speaker 9: then it's not all clinic that can do that step. And now it could be the drug that will be just taken into a syringe and injected directly in the vein of the patient. And there are many additional clinics that before had to send their patients to infusion center that will now be able to do the administration of the drug. And we think that that will be a significant advantage both for the clinic and the patients. Yeah, thank you Christian. This is key, you know, access to potentially new clinics for...
Speaker 4: you know the administration of Wartrogarzo is key and we're counting on this and we're looking forward to reporting back to
Speaker 10: That's it, thank you.
Speaker 2: Thank you. Thank you. And our next question today comes from Zimlei Ahn at Cana Corps Genuity. Please go ahead.
Speaker 11: Hi team, good morning and thank you for taking my questions. I'm on for Edward Nash.
Speaker 11: I'd like to ask about the Th 1902 program. Based on your recent publication and prior dose escalation study results, is it fair to believe that breast cancer and or ovarian cancer will be the first indication for the stress?
Speaker 4: Yes, well thank you for your question and interest in our TH1902 program. Obviously, having different arms to our basket trial was done on purpose. But, Christian, what do you think? It's hard to say, I guess, what cancer is going to give us the first go. It is hard to say and as we announced yesterday morning, there will be a publication, a poster publication.
Speaker 9: at an upcoming meeting showing that the source interceptor is highly expressed in a number of cancers. And at the moment, the five cancers that we're targeting in the basket trials are all high expressor which is in the area of about 80-85% or more which is very significant to many other cancer targets. And in the basket, we're also recruiting small cell lung cancer, target cancer.
Speaker 9: that are expressing the receptor of more than 90%. And then at the moment we're just waiting to see.
Speaker 9: one or two good response and one of those cancer type, it's difficult to say which one it will be at the beginning.
Speaker 4: but it's going well. Thank you, Kishore. That's very significant. The paper that will be presented at the end of the month in Barcelona will tell a lot about the SORT1 expression. We've been saying that this is a receptor that is very significant, that is highly expressed when the patient or the cancer is advanced. So, that's going to be significant. I'd like to remind people that we had, as part of the BASCET trial, two signs of efficacy coming out of
Speaker 4: cases of prostate and that was not necessarily expected as this one doesn't seem to be the one that is expressing the SORT1 receptor at the highest level, yet we had early signs of efficacy. So, the point is that as long as the receptor is playing the role that we think it's playing, I think the potential is enormous.
Speaker 5: Just as a clarification, Paul, you said in the BASCIP trial, it's in the dose escalator. And the dose escalator, I'm sorry.
Speaker 11: Okay, that makes perfect sense. Thank you for the answer. So as a follow on.
Speaker 11: Can we assume that for like assuming positive data from the basket trial that in the Phase II the indication will be within the cancer types that are currently being evaluated in the basket trial? Is that like fair? I do believe that based on all of the AdMOL data that we have done and based on the patient selected which is based on the high expression of the sourcing receptor.
Speaker 9: that we should see sign of efficacy in some of those tumor types. And as we've discussed or mentioned before, Paul mentioned that at the beginning, once we see signs of efficacy that could be two responses or more in one tumor type, we would be ready to do an amendment and discuss with the FDA to increase the number of patients and to initiate phase two assignment design with an additional 25 patients, as an example, and after that to move into the pivotal trial.
Speaker 11: Okay thank you. And when should we start to expect more data from the basket trial please?
Speaker 9: Well, as we mentioned before, it will depend in terms of the efficacy, but at the end of the quarter or next year, within the next six months, we should be expecting to have more signs of efficacy that we'll be able to announce.
Speaker 11: Okay, thank you. Looking forward to that and to post the presentation at the end of the month. Thank you.
Speaker 7: Thank you.
Speaker 2: Thank you. And our next question today comes from William Patzer with Bank of America. Please go ahead.
Speaker 12: I think the last questioner actually followed up on the things I was interested in. One thing I might ask is, although enrollment is going well overall for the BASCET trial, are there any particular cancer types of which you're ahead or behind on enrollment, or where it's particularly difficult to get the patients you need?
Speaker 9: Well, it would be difficult to comment at the moment. It's like recruiting. We're trying to ensure that the pace of recruitment is similar in all cancer types.
Speaker 9: We are doing different activities with the sites and we are also...
Speaker 9: by working on activation of additional sites in Europe , in Canada, and other in the US. So everything is moving in the right direction. And again, we're trying to recruit as many patients from the different tumor types that we have in the protocol.
Speaker 13: Okay, thank you.
Speaker 2: And our next question today comes from Doug Lowe at Lee Jones Gable. Please go ahead.
Speaker 14: Thanks, operator, and good morning all. While we're talking about the oncology program, gentlemen, just one thing if you have any update on status of development of the Boston Consecute 1904, presumably it will be informed by data that you get from 1902 and how you want to stratify the market with the two conjugates. But anyway, just wondered if you have any thoughts on how you might want to push that asset forward.
Speaker 9: In terms of the 1904, what happened in the earlier, just before we initiated this study or the phase one with Th1902, we did an efficacy study in the animal model with 1902 in overhead cancer and you know 1904 was more for in cancer. And the results that we have obtained in 1902 was as good, if not better.
Speaker 9: than 1904. This is why we took DH1902 as a lead compound because it showed very good efficacy in all tumor types tested so far. There's been a number of those. In terms of follow-up compounds, we're talking about 1904, but as we mentioned before, we're looking also at other tetrahedra conjugate. As an example, it's known that docetaxel does not work in colorectal cancer.
Speaker 9: Then we decided to start working on PDCs with SN38 and Irelotigam to see if that could work better in colorectal cancer. It's in preclinical at the moment. It's moving well, and we are also working on potentially attaching other anti-cancer agents to our PDC.
Speaker 4: It's important to know, thanks for your question, but TH1902 gave us stunning results as part of the preclinical work that we've done and that's the reason why we decided to concentrate our activities on this one and that doesn't mean that we don't have the capabilities for conjugating other payloads as per what Christian just said but stepwise when it comes to this, for now...
Speaker 4: We want to be laser focused on accelerating the recruitment of patients as part of the Basket Trial.
Speaker 14: Good feedback, thank you. Second question, you spent quite a bit of time with other questions on the match indication. As you know, abundant published data on fatty liver disease and HIV infected individuals. I was just wondering if specifically targeting on the HIV market and liver pathologies might be a subset indication that you might still be interested in pursuing independently or is that definitively off the table?
Speaker 4: Well, thanks for the question. Where we are now is that we have support from the community of KOL in the NASH space, including also the agency in the US. We have good support for going into the general population and I'd like to remind you that HIV patients, if anything, are more difficult to treat. So that's the way that our protocol has evolved and our protocol now is ready to go. So it could go and what we have decided to do...
Speaker 9: Then that is where we will go at this stage.
Speaker 14: Perfect, great. And then actually the question for which I dialed in originally was with regard to the multi-drug resistant HIV-1 infection market. So, you know, to guard those sales are certainly trending nicely and your main competitor is the Likobia also trending nicely. But it strikes me as though both drugs are probably trending a little bit below what all of our original expectations would have been for market penetration into that space. So just a general comment on how you're seeing the macro environment for that.
Speaker 14: beyond existing quasi-stable levels. And I'll leave it there. Thanks very much.
Speaker 4: Thank you for your question. As you know, Recobia and also Trigarzo are indicated for multi-drug resistance. There is a significant unmet medical need for that, no question. What is the on-tap population? Is it 2,000? Is it 3,000 patients? We are not entirely sure. What we know is that Trigarzo is much needed for patients facing resistance. We are very excited, as I said a few times, with all what is developing in that space. What is developing in that space.
Speaker 4: is a trend towards non-oral regimens and we can be part of that. I think this is the exciting part and being relevant is always first whenever you actually market pharmaceuticals and we are. And second, I think that if you take a look at sales, despite the great growth number that we have now, for the quarter now we reported 26% regards all year to date 17. That's quite a jump. We are excited about what we see, the IV push is going to help.
Speaker 8: John , do you want to provide additional color on market size and for Trigarzo in its entire entity? Well, we understand the market size, I think, fairly well. It's around 2,000 patients a year. Remember, in a highly treatment experienced patient population, these patients are on three drugs. Drugs like Ricobia and other newer agents coming to market will typically be used in combination with Trigarzo. So, it's not a single-sum game here.
Speaker 9: And there's increasing need in this space and for Garza, that's a great niche. Christian? Maybe one additional thing. It's a good thing that now you have two drugs in this market because before Gajimab, there hasn't been any new mechanism of action to treat or to take care of that patient population. Patients were four or five drugs as an average. And now that you have two new mechanism of action, I think that the switch is starting to go from those five to probably two drugs or two drugs.
Speaker 10: and Christine said that you can go right away or quick enough after a partnership to start a trial. But I'm just going over the MBNA in the meantime. And it says the FDA has asked some questions on the modified protocol and they have not been approved yet. I just wanted to clarify that when you say that you can go quickly, would this be on the modified protocol or the original one? And as a second part, when would you expect the FDA to...
Speaker 4: to respond once you answer their questions. Thanks. Do you want to take this one? I think that we are in discussions with, as I said, several companies for NASH. The protocol that we have received...
Speaker 4: the Study Me Proceeds letter so we could go with the original phase three. What we have done is that we have embedded an interim analysis in the study. We think that this is the best way to go stepwise to actually confirm that after 400 patients we have already good signs that we can have an impact on the NAS score in fibrosis and or fibrosis. But today from a partnership point of view, anything else to add?
Speaker 5: I think we, you know, we did get some questions from the FDA on the protocol. They're not deal-breaking questions. They're just questions to adapt the protocol, but we're not finalizing the protocol because if we do have a partner, we will want to have their input, their final input on the protocol before launching the study. So we can answer them and we're in agreement
Speaker 5: but we're not finalizing until we have a partner and until we can agree with a partner on a final protocol.
Speaker 10: That's great, thank you.
Speaker 2: Thank you. Ladies and gentlemen, this concludes the audio Q&A session. I'd like to turn it back over to the management team for any closing remarks and or webcast questions. Please proceed.
Speaker 5: So on the webcast questions there are quite a few but they're all related to the enrollment on the BASTA trial and so I think we've gone in details on that. So on that I will turn it back over to Paul for closing
Speaker 4: Well thank you Philippe. I hope that everyone can see the transformation of our technologies over the last two years. The strategic changes that we have carefully implemented are now firmly rooted in bearing fruit.
Speaker 4: We have in spirit and practice rebooted the growth potential of our two drugs while continuing to invest in the line extensions of these products.
Speaker 4: Additionally, while we continue to deliver solid performance in the commercial business, we have been given a strong vote of confidence and have fortified our balance sheet even further through an exceptional transaction with a major investor in healthcare.
Speaker 4: We believe that we will have a solid four quarters to finish the year strongly and are optimistic for the new year. And I'm happy to remind everyone that we remain focused on executing the basket trial. And we believe we are only months away from the next catalyst.
Speaker 4: I look forward to our discussions where we will begin rolling out the next steps for where management is taking their technologies.
Speaker 4: Thank you everyone for being on this journey.
Speaker 4: I hope you all had a wonderful start to the fall season and cooler temperature. Thank you again.
Speaker 2: Thank you. Ladies and gentlemen, this concludes todayís conference call. We thank you all for attending todayís presentation. You may now disconnect your lines and have a wonderful day.