Q3 2022 SCYNEXIS Inc Earnings Call
Good morning, and welcome to the same exit third quarter 2022 earnings conference call.
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I would now like to turn the conference over to Debbie excellent Executive Director Communications and Investor Relations. Please go ahead.
Hello, everyone and welcome to today's conference call to discuss our third quarter 2022 financial results and corporate update before.
Before we start let me remind you that today's call will include forward looking statements based on current expectations, including statements concerning our financial outlook for the future leadership expectations for our future financial and operational performance as well as our business strategy because such statements are subject to risks and uncertainties actual results may differ materially from those expressed.
Or implied by such forward looking statements. Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, and quarterly report on Form 10-Q, including in each case under the caption risk factors and in other documents subsequently filed with or furnished to securities and Exchange Commission all forward looking.
Statements speak only as of today November nine 2022, so not just undertakes no obligation to update such statements to reflect events or circumstances that exist. After the date on which they were made the information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions.
Joining us on today's call are Sonexus, President and CEO , Dr. Marco tackling Eddy Chief Medical Officer, Dr. David Angelo and Chief Financial Officer, Ajvar Mccloud. Following our prepared remarks, we'll open the call to your questions now I will turn the call over to Dr. Mark <unk> President and C.
Yeah. Thank.
Thank you Debbie good morning, everyone Guangzhou motto.
Thank you for joining us today for our third quarter 2022 earnings Investor call.
I want to begin by drawing your attention to a recent report issued by the World Health organization or <unk>.
This was the first ever list of priority deadly fungal pathogens that are becoming a growing global public health Manish.
The list includes well known Decius pathogens, such as Canada audience, another Canada species, because that part actually losses stop economies and more like I suppose he looks for me Gasless Histoplasma corollas or pathogens against which you bought extra point just shows greater even.
These streams highly resistant to other antifungals and.
And the data from our phase III studies Fortean cares provides clinical evidence of activity, although you brushed upon jump.
<unk> difficult to treat fungal infection, even when they are refractory to currently available treatments.
Moreover, these everyday chores call for action is further validating our corporate strategy to refocus on life threatening invasive fungal infections, while monetizing braxton in portable budget devices.
So we are actually proud to be on the Frontlines. We've embraced upon justified this never ending warfare against antimicrobial resistant pathogens, we are prepared and we're ready.
David will provide more detail on our continuing efforts to stay in front of this deadly fungal pathogens.
As we have recently announced an extra is transforming the company by focusing our resources to the clinical development of the oral and intravenous liposome formulation of a backstop for severe hospital base indications, we have higher long term returns are expected to be seen.
The right strategy at this time because of the growing strength of serious and potentially deadly fungal infections, which I just mentioned what do we believe are addressable and Jim can play a significant role saving lives.
Achieving its full market potential.
At the same time, we are actively pursuing suitable commercialization partners for Brexit.
For Volvo bus candidiasis in Florida, but actually up on Europe outside of the U S.
And we are making good progress on this call in particular.
While we are in the process of out licensing, but extra frame in the U S. For PBC, we will continue to keep these important product on the market in the U S and make it available for the many patients can benefit from its proven efficacy, we wouldnt minimize water sources allocated to be active promotional pressure.
In order to really align our cash to the development of a more Oregon Hospital indications.
Our supplemental NDA filing for according to VDC is on track with the deal for decision date of November 30 of 2022.
If approved for the second indication, but ex Japan will be the first and only therapy approved in the U S for both the treatment of BDC and prevention of the quality issue we.
We believe that these anticipated second indication is extremely attractive to a commercialization partner and will help expand patient access to our innovative joint treatment.
On the corporate side, the we closed the third quarter of 2022 with more than $96 million in cash and with our new restructuring plan, we have extended our cash runway into the second quarter of 'twenty 'twenty four.
This cash is expected to support our hostel programs to enable additional regulatory filings in 2024.
On the cloud our new CFO will provide more detail on our expenses and cash balance and then we will open the floor for a Q&A session.
Now, let me turn the likes of them to brush up in performance in the budget at least infections for this quarter.
We continue to increase in the number of Brexit to 10 prescribers.
In Q3.
Almost 2500, Hcp's prescribes, a brexit, representing an increase of 11% quarter over quarter and even in that year increased over 30% of our repeat prescribers showing that when hcp's used prices are important patients they are willing to prescribe it again.
The rest are in prescriptions continue to grow in the third quarter, we generated almost 5800 prescriptions in the third quarter of 2022, representing 30% growth, although the second quarter of 2022, continuing a trend of growth.
However, we do expect some disruption to the strength in the fourth quarter as it is also about what the decision dwindling in person promotion without the deal.
After signing a contract with a major national pharmacy.
Benefit manager P B and in October we successfully garnered but excellent coverage of 130 million commercial insured ensure the lives representing 70% of the commercial unit dose.
I will now turn the call over to Dr. David Angulo, Our Chief Medical Officer, and future Chief Executive Officer, David <unk>.
Thank you Michael.
Before I get toward the pipeline updates I would like to share with you a page out of the W. A chilled report on the first ever list of priority fungal pathogens that medical mentioned after that.
The intention of this report is to drive both research efforts and policy interventions to increase the global response to the phone guide that represent the greatest threat to public health as they become increasingly coleman and resistant to treatment.
I would accept it has demonstrated activity against most of the pathogens in the critical in high priority groups of these leased including candy that Audi and all other clinically relevant candidates specious mentioned here and we can lever that up.
Perhaps the low season therapy guidance. He has also shown activity against the Gielow suddenly got those is the plasma and nuclear islands.
IBEX affirmative spectrum of activity is very well suited to address many of these critical needs and other development programs at already evaluating objects that longer in these areas.
As you recall the <unk> study includes patients with infections caused by many of these pathogens that are not adequately treated with current treatment options that caters to study focus on Canada.
Thus the niches study in Aspergillus and the Mario study in Candida infections, they all clinical relevant species.
It has been very encouraging to see the W. Cho underscoring the need to further development on these areas and how well our development plan fit within the three critical and high priority list, we stand ready at the right place and in the right time with a significantly derisked antifungal asset.
That has already received its first FDA approval for one indication and are rapidly advancing development programs addressing critical needs in the antifungal space, including a difficult to treat and resistant format infections with an anticipated first approval in the hospital setting by late 2024, we believe that at all.
Hospital program can unlock significant value to both our patients and our shareholders.
We are advancing our pipeline quickly towards hospital utilization, we have already reached our target enrollment of 200 subjects in that study and will soon begin at study closure activities to enable completion of the follow up of all the cases by first half of next year.
This will be followed by the final data Review Committee review and reporting of final data as guided early in 2024.
The study will follow a similar timeline as a reminder, the cares and Judy study out of a lady named except for getting patients with Canada, Audis and other refractory form of infections.
Dustin just studying aspergillosis is closing enrollments well, we're planning to close up the study and analyze the available data in the first half of 2023.
The data from this phase II study, even in a smaller number of subjects that anticipate that will guide potential next steps in this development that.
Enrollment is active in the Meteor study, which is evaluating <unk> in patients with invasive candidiasis.
We aim to open approximately 70 sites globally.
As previously guided we are anticipating completion of this study by end of next year with data in early 2024.
As mentioned previously the data from the <unk> study along with the data from <unk> and <unk> studies.
We intended to be support People's on NDA submission in 2024 with an anticipated first approval for an indication in the hospital setting later that year.
We also plan to advance our IV formulation of <unk> into a phase II trial in 2023 with results expected in 2020 for.
The data from this study will inform the design of a phase III study that is expected to enable us to make the intravenous formulation available in the market broadening the clinical utility of diabetics of hunger as a comprehensive antifungal solution to the cooling critical needs.
We are now.
Weeks away from on November 30 proof of data for <unk> in the recurrent BDC.
We remain on track and remain confident in the positive of our comfort breaks that have been patient for brake supplement for patients.
After this approval we plan to communicate with prescribers regarding this new indication and key information in the updated label.
Thank you and I will now turn the call over to eyeball applaud, our chief Financial Officer.
Thank you David.
Good morning, everyone and thank you for joining today's call.
I'm Ivor Macleod and it is my pleasure to speak to for the first time as the new CFO of Sonexus.
Before I get to the financials I have to say that I am delighted to join a company with such a talented management team as well as strong scientific acumen focused on addressing the ever increasing threats of infectious disease.
I very much look forward to working with Marco David and the team.
During this period of transition as well as over the coming years contributing to the future success of <unk>.
Let me now turn to the financials.
<unk> net product revenues in the third quarter of 2022 increased approximately 23% to $1 $6 million over the $1 $3 million that we realized in the second quarter.
Research and development expenses for the third quarter of 2022 was $6 4 million.
Impaired to $4 4 million for the comparable period in 2021.
The $2 million increase was primarily a result of the increased clinical development expenses for the Mario and Vanquish studies as well as preclinical expenses associated with our IV liposome formulation.
Selling general and administrative expenses for the third quarter of 2022 was $16 $7 million versus.
Versus $15 4 million in the third quarter of 2021.
The $1 $3 million increase or roughly 9% for the three months ended September 32022 were primarily driven by an increase in costs recognized to support the commercialization of Brexit.
Total other expense was $7 8 million for the third quarter of 2022 versus total other income of $18 8 million for the third quarter of 2021.
During the third quarter of 2022.
And the third quarter of 2021, <unk> recognized a noncash loss of $6 5 million and a noncash gain of $18 8 million, respectively on the fair value adjustment of our warrant liabilities.
Our cash balance remains strong.
The total of cash cash equivalents and short term investments at the end of the third quarter totaled $96 $1 million.
Compared to $100 1 million at September 32021, and compared to $104 5 million in cash and cash equivalents at December 31 2021.
<unk> believes that its existing cash cash equivalents and short term investments will enable the company to fund its operating requirements into the second quarter of 2024.
This assumption does not include any potential upside from ongoing business development activities associated with Brexit.
I will now turn the call over to Dr. Marco <unk>.
Thank you Ivor.
Before we close the call to the Q&A session I want to reiterate a few key points.
We are extremely proud to be at the forefront of a battle against deadly fungal pathogens, we have you.
<unk> acid <unk> can become a major player in the fight against this fungal infections.
We have a <unk> date in for our core rent Boulevard genetic analyses of November 30th.
But three weeks from now and everything is in line with our expectation to be.
We plan to provide updates of our progress and Mario which we believe can be leveraged to build a strong and differentiated optical brand. We remain on track to have data in early 2024 and to fly our NDA with 40 <unk> data later in the year with a potential approval by end of 2024.
Our <unk> franchise, not only has the potential to generate $300 million to $400 million a year and that's trailing the U S alone, but also will provide significant revenues until at least 25.
Finally, with our recent corporate action, we have over $96 million in cash and we have extended our cash runway into second quarter 2024, and this runway does not include any upside from ongoing potential business development deals.
Operator, please open up the floor for questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Using a speaker phone.
He kept your handset before pressing the keys.
Withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
And our first question comes from Louise Chen with Cantor.
Hi, Thanks for taking my questions. Here first question I had for you is when do you think we will see an out licensing and our partner for breakfast.
And how do you think about valuing this opportunity and as this year possible. After you pay two five or 2023 more likely and then second question I had for you is how will you succeed or how do you think about succeeding in the hospital setting when others have failed and then I have one more question, but I'll. Let you answer. These two first thank you.
Yeah. So first of all let me say, we are very active pursuing potential path announced.
And well, we will just continue to keep up.
All of you updated just let you know that we are in very active conversations with potential partners.
And so stay tuned.
We will also of course on these type of things with this we cannot really provide yet.
Perfect.
Our commitment certainly we expect to be as I mentioned with BG will be approval of our recording to BDC, which we expect to drive at the end of this month. So in three weeks from now as well and always we expect to be is to continue to create the interest in a potential and potential partners and well.
We expect.
Let the vis vis vis profitable will will be valued by Patel.
Potential partners because as we mentioned before we are looking for partners whether the.
Greater footprint, when we can afford with <unk> in women healthcare and most importantly, they may have other products in the bag of their reps synergistic products that will really help to make the most out of correctional fab. So we expect to be let.
The value with excellent can achieve in the in the market is going to be recognized.
The third one is up for their hospital or hospital the hospital setting.
<unk> truly appreciate that.
It's also any cause.
Can be a challenging one but will be unique product belonging to a new class. We expect these to be to be.
Certainly a product that will create interest as we have seen a just on on the way what we have been able to enroll patients.
David would like to add something about how this is being received from our kols.
The use of <unk>.
Based upon jud for serious invasive fungal infections sure Michael Louise we do believe that really the public IDEXX. Upon there is well differentiated it really be enabled to address very significant unmet needs. As you can see here. This is being recognized again and again what are what <unk> hundred potential can be achieved and <unk>.
I believe that with the right development program that we have said to focusing in the indications that are very substantial and life threatening conditions that we have focused on and with an efficient development program being able to get.
Favorable label in that regard and so we believe that we will be very well positioned to really have a predominant players in the market and predominant place in the treatment of <unk> for these patients that have very limited treatment options. We must also remember that the antifungal space is likely unique because of the fact that there are not so many players there or not.
So many treatment options that are not so many groups of drugs and once the patients become resistant to one or two or intolerant to one of the two that options had extraordinary limited. So this is this is providing us a unique opportunity in our opinion to really maximize the potential value of multiplex have hung in there in the in the commercial in the commercial.
The market in the commercial market in the hospital setting.
I hope that addresses your.
Your question.
It does thank you and if I could just squeeze in one more modeling question here I think if I heard you correctly it sounded like the fourth quarter sales will be down versus the third quarter because of some disruption and then I wanted to ask you about the opex under your new business strategy as you wind things down how should we think about opex in fourth quarter and then in 2023. Thank you.
Very much.
So.
As you have seen but there is actually we have seen a poor always positive trend in the last few quarters.
And what we are saying is that at this point, we tend to be conservative and given the fact that we are stopping act.
Active promotion in the field with the termination of our amplitude partnership.
At this point, we don't expect probably future growth.
So we.
We will see as you May know if you look at our sales will be accumulated database on others. We continue to actually right now to continue to have sales of the product and we will continue to make the product available to with regards to be.
As to the patients because we want to make sure that.
Patients who needs it who who need an alternative to fluconazole.
The only product approved and was approved almost 30 years ago have access to to be to the product. In addition.
As I mentioned that is as I mentioned before we have some new coverage of a new BPM, adding another $30 million. So the fact that we may be stopping promotion may be active promotion may be balanced by the fact that there are more patients balance. So we will see at the end of the quarter really how we've been doing.
We will go through our Opex.
Operational expenses, we have not really provided the guidance, but since we are really focusing our efforts on.
R&D on the development of the of the product in.
Invasive fungal infection.
Think that actually.
The guideline of the Sams to what our Opex will be probably you may want to look back at our expenses in 2019, 2020, where we were let's say pre commercial and this is maybe the type of operation, especially as you can be right in the range of where we expect it to be.
With the new sign actually solely focused on R&D development.
There is the rest of your question.
Yes very much.
Yeah. Thank you very much Louis.
Next question comes from Michael Higgins with Ladenburg Thalmann.
Thanks, operator, good morning, guys I appreciate you taking the questions and welcome aboard Ivar to so nexus.
David and Mark.
Yes first question for you guys.
Does the inclusion of a Brexit hunger onto whose prior to passenger list improve the chances for non dilutive funding our global partnerships.
Anything you can mention in regards there thanks.
Thank you. This is David Michael So I just want to clarify certainly the <unk> least identifies what are the priorities of <unk>. They are really asking.
Our skin policymakers and also ask in research and development organizations to focus on because they considered extraordinarily important and take care of a very significant impact in public health I.
Given meant to imply that it breaks up on that is part of that Lisa just mentioned and within that <unk>.
We're showing here is that we have almost <unk>.
Perfect fits in regards to order focus on air for software development program vessels, but they kept consider our priority focus that should drive innovation in the future.
<unk> is a reinforcement all four of our vision that we have been putting together since two years ago and focusing in this very difficult to treat unmet medical needs in the formula space.
How will this impact our ability to continue being successful in attracting people to our story and really invest investigator store clinical trials had said that we think that is important and we think that is important because.
Recognition of the W. Shaw, along with the recognition Patrick cognition from CDC and all the organizations that this fungal pathogens represent a substantial unmet medical need and that is very welcome innovation in those areas. We believe that will potentially eventually translate into.
Into policymaking favorable conditions towards commercializing a product like that that offered that broad spectrum of DVT is addressing needs not only.
Not only mentioned by the company, but needs that are extraordinarily well validated by organizations worldwide. So we see that definitely has a positive outcome and we see definitely.
As a positive signal that we are in the right path and if I can add for example, talking about the non dilutive funding if you think about it.
BARDA has been providing demands in the field of anti Infectives. Their focus has been really an antibody antibacterial.
Now with <unk> really making a very strong case with fungal infection.
Or actually a global threat as much.
Bacterial infections that can change if they have a better.
Their approach and the other is really the recognition that fungal infection.
A major global again again, a major global freight what can I.
Also introduced new legislations.
Like the past.
For example, the disarm act.
Let me just say, yes, probably Michael I told you in the past that it was down in Washington, a couple of times talking with the legislators and they still think about fungal infection of the Adobe D is a fleets food and of course that is not the case with this we are talking here about the infection invasion infection of the blood screening.
Oregon's in very sick patients, where the outcome as we mentioned many times with mortality can still be 25% to 40%.
Extremely high mortality and I think with the <unk> report really with the right focus the right the emphasis on how critical this infection site.
That's very helpful guys I appreciate it if I can turn our attention to Mario.
Design in the study that it makes a lot of sense for this asset.
Can you give us an update on the number of states I think you were going to 75 just wanted to clarify.
If that's where you're going to or if that's increased and.
How the enrollment is going so far thanks.
Yes, Thank you Michael.
Certainly as the number of sites that we hit plan has not changed so we are in the process of the startup of the study as I mentioned.
But we typically don't guide on enrollment.
An ongoing basis. However, I can tell you that the trajectory of the study in terms of site initiations approvals in different countries et cetera that is as we have been expecting so everything seems to be on track for us really being able to complete. This study is to complete enrollment of this study as we are estimating right now by end of next year.
So at this point, yes, very very intense.
Activity is happening really what happens at this stage is that you go out to all regulatory agencies different countries.
When we are opening centers et cetera, and and we have been receiving.
Positive response from that point of view so approvals are coming in we are just in the process of really setting up all the sites and will we get them ready and we have already several sites already opened as you know.
And Ralph Great clarification, Okay. I appreciate that one last one if I could.
The feedback for us on your conversations with the FDA ahead of the November 30th Purdue.
We don't.
Actually we didn't this particular supplemental NDA did not required in a late cycle or I need or any type of conversation with the FDA. They didnt complete them better.
In addition out.
Our conversation on what's needed and we are just in the in the normally stages of this particular.
Process, which is the which is the.
Really understanding what is there what is their comments et cetera within the label dose of the stages that we're currently at.
And all the signs are currently positive towards that towards the or expectations of an approval at the bedroom.
I appreciate all the feedback thanks guys.
Yes.
Thank you Michael.
Next question comes from Jordan.
Mendelson right with Brookline capital markets.
Hi, Thank you for taking my questions.
So does the increased enrollment in the previous.
<unk> does that impact your funds in anyway.
Costs.
And I was just wondering how do you plan to use the extra patients that are enrolling thank you.
Sorry, the first the first question regarding.
The increase in the enrollment is it increasing our costs.
Yes.
To address that first thank you for the question first.
We as you can imagine with disapproved brand that has been running for several years. So far you really need to notify the investigators with sufficient advance notice when youre planning to really stop enrollment in one of your trials. In these trials has been the <unk> study has been extraordinarily well received and I can tell you that.
The majority of our investigators that are very disappointed that we're stopping enrollment because this trial has given them the opportunity to offer outbreaks of finger when order products cats and tightened sale. So they really saw this this.
<unk>.
Protocol as something that they really wanted to really continue running for for multiple years. However, as you know, we we said David listen our target enrollment is 200, we have anticipated that we were going to be complete in the study towards the end of this year based on the trajectory that we saw at the beginning of the year, we had communicated that.
To the investigators are preparing them for the process and we decided to really try to maintain the same communication to maintain the same trials with investigators and we need to to keep the subject enrolling until the end of this year the incremental cost is minimal to be honest because the reality is that you do.
Have all the costs of our clinical trial are mostly associated with all the infrastructure that we need for the in place. There is some cost associated with the specific number of subjects enrolled but thats not the main driver and in our opinion that was the right decision to enable the investigators to maintain engage with us.
Which many of them at the same investigators that were using for <unk> and at the same time to really maintain the type of communication that we have been maintaining with them and keep them.
And keep them as I mentioned motivated from that point of view.
And your second question.
You remind me of that.
Yes, I was just wondering how do you so the extrapolation better coming in how do you plan to use them.
The data from these patients.
<unk>.
Yeah I mean.
Yeah like they are going to look at some extra parameters are.
Would they be part of the usual call there'll be just included in.
So let me see if I understood. This right. So how do we for the for the patients that are coming in what are we planning. So the next steps for this particular study is that as you mentioned as we mentioned before once we have the last subject last visit that we complete on the follow up for all the patients all patients.
We will be analyzed.
Data review committee, they will be parked all of them will be part of the same package of analysis and along with the cares subjects coming from cares and this as you know our open label studies. So we are planning to contrast, the response and outcomes rate from these groups from the patients coming from <unk>.
Cares with external controls and we do have right now access to good external datasets that we consider are going to be extraordinary irrelevant for providing that comparison against external controls and that is that is the way that we're planning to really to first report the outcome of all the patients from feuding cares and then report.
Later on to really being able to compare against the external controls.
These two pieces out of what we are expecting will be supportive of a salvage therapy indications. So we are expecting that the feuding cares data along with a comparison with external controls will be supportive of a salvage therapy indication that's I'm not sure. If I addressed your question, but that's the way that we are planning to use the data from these payers.
<unk>.
Yes, great yes, it does.
And a follow up on local previous study like it includes a basket of indications in the trial.
And you've shared some preliminary data as well so do you see one or few of the indications responding better than the others.
So we know that glucan synthesis inhibitors are gold standard for the treatment of Candida infections.
Typically if that's.
If I understand the question right. So yes, what we do expect that really just infections. We chart you can see this inhibitor societal for existing section that's really there they're kind of a wild factor for this mechanism of action. So reality is that our expectation is that.
Future the majority of the patients in the <unk> study et cetera have been enrolled with Candida infection and that is what we when we believe that it is potentially the greatest the greatest.
Opportunity for Brexit for a Brexit finger induced infections heading save that the protocol also allows the treatment of mold infections. When they are failing and or the use of <unk> combination therapy to treat very difficult to treat mold infections like Nucor, Mike Goldstein sort aspergillosis so.
With that we are allowing all of these different strategies of treatment that once we have the final results. We believe that all of them will be extraordinarily valuable as an additional alternative options for physicians.
When they are facing with this very difficult to treat infections.
Okay.
Yes. Thank you that's very helpful and finally.
I have missed it but what is the timeline ports Nordea study.
We are planning to report data.
We're planning to really close enrollment within this year as well and really been able to to report data in the first half of next year.
Thank you so much I'll get back in queue. Thanks.
Okay.
Excuse me if you would like to pose a question. Please press star one.
Okay.
Okay.
This concludes our question and answer session I would like to turn the conference back over to Michael <unk>.
Evidence and CEO for any closing remarks. Please go ahead.
You very much operator, I would like just to make free simple point. The first one we are very proud to have an asset like.
<unk> will make a significant difference to patients with invasive fungal infections. The second is that we have expertise in data sources to achieve our goals and the third but we believe that we are on a path that will make financially successful and will be able not only to help patients but also to reward.
Our shareholders and thank you very much for your attention and looking forward to continuing to work with all of you. Thank you operator, you can closely conference call.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Okay.
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Okay.
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