Q3 2022 Fresh Tracks Therapeutics Inc Earnings Call
Welcome everyone to the fifth checks therapeutics third quarter 2022 financial results conference call.
At this time all participants are in a listen only mode.
Following some prepared remarks from the company, we will open the call up to questions.
As a reminder, this conference call is being recorded I would now like to turn the call over to Garth Russell from lifestyle advises God.
Thank you and good afternoon, everyone.
Joining me on today's call are fresh tracks, Chief Executive Officer, Rob Brown, President and Squalor, Chief Financial Officer, Bert Marchio, Chief Medical Officer, Dr. Monica, Lewke, Chief R&D Officer, and Chief operating Officer Deepak Chopra.
Before we begin I would like to remind everyone that this conference call and webcast will contain forward looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward looking statements reflect our opinions only as of the date of this call. We will not undertake obligation to revise or publicly release the results of any revisions.
These forward looking statements in light of new information or future events factors.
Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filings on Form 10-K, and our other periodic reports on forms 10-Q, and 8-K filed with the FCC. It is now my pleasure to turn the call over to the company's Chief Executive Officer, Rob Brown Rob.
Forgers.
Thanks, Curt good afternoon, everyone.
And thank you for joining our call. Today. This is the first quarterly update since we completed our corporate rebranding this summer which included the introduction of our new company name fresh tracks Therapeutics.
Along with a new logo website and brand. We believe this rebranding represents a fundamental shift we've made over the past year and our corporate mission and strategy.
Driving these changes were the acquisitions of a promising pipeline of N C. He's targeting novel mechanisms of actions for the treatment of a wide array of autoimmune and inflammatory diseases.
This is highlighted by F. R. T X zero, two formerly <unk> zero to a potential first in class <unk> inhibitor that is currently being evaluated in a phase one clinical trial S. R T X and <unk>.
Phase one clinical trial F. R. T X 10, formerly <unk> a novel <unk> inhibitor and a platform of next generation kinase inhibitors.
These programs highlight our commitment to shift treatment paradigms by developing targeted science, driven and potentially first in class therapies that could transform patients' lives, while generating meaningful value for our shareholders.
During the third quarter, we continued to progress the phase one clinical trial of F. R. T X zero too.
This includes completion of all cohorts of the single ascending dose S. A D or sad part of the study and initiation of the multiple ascending dose M. A D or mad part of the study <unk>.
Currently we remain on track to report Sad and Mad topline results by early 2023.
As a reminder, this study marks the first time, a <unk> inhibitor intended for patients with autoimmune disease has been orally administered in humans.
In addition, we continued to advance the non clinical development program for S. R. T X zero to in parallel with the ongoing phase one study as well as preclinical development activities for <unk> 10, which is our lead staying inhibitor candidate that we acquired earlier this year.
Finally, I'd like to provide a brief update on soft running bromide or <unk> for short.
Which we sold two botanicals this past may.
That's boutique as mechanics recently announced in September a new drug application or NDA for S. V gel, 15% was submitted to the FDA. We are excited to share. This progress as a reminder, under the terms of our sale of SB. Two book panics fresh tracks is eligible to receive various regulatory.
And sales based milestone payments as well as tiered earn out payments ranging from high single digits to mid teen digits on net sales of SB gel, we look forward to sharing any additional updates regarding this program as they become available.
Now I'll pass it over to Monica to provide an update on our ongoing pipeline development activities moniker.
Thanks, Todd and good afternoon, everyone.
We've had a very productive third quarter of 2022, which built on the momentum from the first half of this year.
As Rob just mentioned during the second quarter, we initiated and are continuing to progress the phase one clinical trial of <unk> to our total.
Potent highly selective and orally bio available declinate inhibitor.
This randomized double blind placebo controlled study is designed to evaluate safety Tolerability pharmacokinetics and pharmacodynamics of <unk> two capsule, both healthy volunteers and subjects with atopic dermatitis or <unk> for short.
As a reminder, based on our scientifically robust data package and promising preclinical validation that's been observed that this compound to be.
We believe that effort taxes dual mode of action modulating, both the adaptive and innate immune system could represent a paradigm shift in the way. We currently treat these debilitating diseases.
Heartware nave the phase one study, which is being completed.
Sad assessment, which has enrolled a total of 56 healthy volunteers at one city center across seven cohorts.
Each of which included six subjects, receiving a single dose of <unk> and two subjects.
Hey, Bill.
Based on the profile of <unk> observed in the sad part of the study in September we initiated a part one b of the study.
Matt assessment of FRE, <unk> capsules or placebo administered once daily over 14 days and up to 33 healthy volunteer.
We look forward to reporting top line results from both the sad and Mad parts of the study by early next year.
After completing the sad and Mad parts of this study we intend to initiate part two of the study, which will compare the upper TX <unk> to placebo in approximately 40 patients with moderate to severe atopic dermatitis every 28 days of dosing.
This part of the study is expected to include a preliminary assessment of efficacy, which.
Which will serve as an initial model for the treatment of <unk> into an immune mediated disease.
This design fits with our broader strategy for this program considering the potential to develop <unk> for the treatment of a wide range of autoimmune and inflammatory diseases.
Turning to our Sting inhibitor program.
T X turn which is a novel potent orally bio available inhibitor.
<unk> has shown strong proof of mechanism, resulting in significant reduction in key pro inflammatory cytokines and a favorable initial pharmacokinetic toxicology safety pharmacology profile.
We continue to advance the preclinical development activities for this program to support starting IMD, enabling studies thereafter.
I'd also like to briefly touch on our library of next generation kinase inhibitors, which includes hundreds of new chemical entities that inhibit <unk> one.
RK to keep Teekay and CLK kinases.
Importantly, inhibiting these kinases has shown promising outcomes in numerous models designed to mimic a range of different conditions within the autoimmune or inflammatory oncology and rare disease spaces.
We're planning to identify characterize and optimize the brain penetrate non brain penetrant novel kinase inhibitors from this platform with the goal of progressing one or more as programs for the potential treatment of debilitating diseases within some of these high impact field.
Before I hand, the call over to Bert to review the financials I'd like to highlight the recently released information of our scientific advisory board or <unk>.
Sure.
Which consists of five scientists and clinicians with decades of hands on experience in the field of immunology and inflammation. This includes doctors can't Fitzgerald, Bernard core really Peter No Gleevec and Bridget Wagner.
Honor that welcome this team of World renowned thought leaders to our newly established.
This input and guidance will be invaluable as we develop our novel pipeline of differentiated therapies.
I'd now like to pass the call over to Bert to provide a financial overview for the quarter.
Bert.
Thanks, Monica and good day to everyone on the call.
Before I provide a summary of the third quarter 2022 financial results I want to encourage you to read our full consolidated financial statements and MD&A contained in our report on Form 10-Q, which can be accessed through the investors section of our website once filed with.
The SEC.
Starting with cash the company reported $11 3 million in cash and cash equivalents as of September 32022.
We expect that our cash and cash equivalents combined with up to $6 million from the expected near term payments under the asset purchase agreement or <unk> with both Phoenix will be sufficient to fund our operations for at least the next 12 months.
Revenue for the third quarter of 22 was approximately <unk> 5 million.
<unk> $2 1 million for the third quarter of the prior year.
Revenue for the third quarter of this year consisted of contract revenue recognized.
Recognized under the PPA and transition services agreement or TSA with Botanicals, which includes $4 million of feeds for consulting services. The company provided to <unk> under the TSA and sub license income under the IPA.
A <unk> 1 million.
Revenue for the same period last year consisted of royalty revenue, we recognized from the sales of E clock or SB gel, 5% in Japan <unk> pharmaceuticals.
R&D expenses were $3 6 million for the third quarter of <unk> 22, compared to $10 2 million for the third.
Third quarter of 'twenty one.
This decrease was driven primarily by lower clinical expenses related to SB upfront license expense incurred in connection with the license agreement with <unk>, Inc, and lower regulatory and compliance fees.
Partially offset by the phase one clinical trial pause for Edvard TX zero too.
G&A expenses were $3 million for the third quarter of <unk> 22, compared to $3 3 million for the same quarter of the prior year, which decrease was primarily related to lower comp and <unk> expenses and other administrative fees.
The company's net loss for the third quarter was $6 million compared to $13 3 million for the third quarter of last year.
And with that I'll turn the call back over to Rob for closing remarks, Rob.
Thanks for the financial recap.
We're pleased with the progress over the first nine months of 2022, and we look forward to continuing.
<unk> assessment.
<unk> of our exciting pipeline of novel therapies. We believe this pipeline has broad potential to produce much needed treatments within the field of immunology and inflammation.
As we've covered on the call. There are several important milestones we expect to occur over the next few quarters, which we believe presents significant opportunities to create value for our shareholders. This is highlighted by the sad Mad topline results from the ongoing fr <unk> zero two phase one study, which remain on track to be announced in <unk>.
Early 2023, and the continued development of our other novel therapeutic candidates, notably our lead <unk> inhibitor <unk> 10.
This concludes today's prepared remarks, I'll now ask the operator to open the call up for questions operator.
Thank you.
We will now be conducting a question and answer session.
If you'd like to ask a question. Please press Star then one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
Can I push star think too if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Yeah.
Our first question is from Tim Lugo of William Blair. Please go ahead.
Thank you for taking my question and congratulations on the progress.
For part two of the <unk> two trial can you discuss kind of a therapy and the moderate patients.
What's it been exposed to prior to entering the trial.
I assume these are going to be biologic naive patients, but can you give us kind of a sense of how pretreated that'll be.
Sure Hey, Thanks, Tim for the question Monica why don't I turn that one over to you.
Sure Hi, Tim.
Actually we're making requirements for patients not to have received biologics such as diplomat.
For a period of six months prior to entering the study so for any previous biologic, we will make sure that it's far beyond the half life is makes it has continued.
Continued activity is that drives that their previous use is not does not exclude them for participating in this part one piece of this study at.
At least phase one study.
And any thoughts around JAK inhibitor.
Exclusion or.
While it would be probably.
Probably a JAK inhibitor naive patients.
These will most likely be JAK inhibitor naive patients that we do have an exclusion for.
The period to which they would be prohibited.
Okay great.
And maybe kind of a broader question Rob can you just discuss your.
Thoughts around business development both of that.
To lead novel assets. When obviously you wanted some proof of concept data but.
In your opinion kind of when is the ideal time to seek a partner or.
Or how long do you kind of wanted to continue development.
That's good.
Good question, Tim obviously, that's more of an art than a certainty on when you do these things obviously you'd like to have good data.
To talk to people about we do get a regular requests really ever since we acquired both the sting inhibitor as well as the <unk>.
We listen to those we you know we share the information we can with parties and obviously, we also are out talking to investors. So we're kind of using a multi pronged approach here, but I don't know if there is an ideal time I think it's a combination of the drug.
Data you have on the drug as well as the companys position at that time.
Theres been obviously, a major market dislocation over the past year can you maybe speak to what's been when you. When you were approached by these companies in terms of a development partnership I assume.
Maybe even upfront.
Significantly larger than.
Then what the kind of market is giving you these days.
Yeah.
We have lots of companies that have approached us.
Kind of small medium and large.
That are curious and interested in and both of these platforms actually.
I don't think I really want to speak to what that was.
A deal might look like.
Because obviously, we don't have one that we're ready to announce them and therefore, it's probably not appropriate to speak on that but but certainly we're encouraged by their interest.
And their curiosity and the mechanism being first in class.
With the <unk> as is.
Intriguing to people there they are curious about the mechanism and understand why we acquired it and.
Are excited to see more data as we move it forward.
Understood. Thank you.
Our next question is from Thomas Flaten of Lake Street Capital. Please go ahead.
Hey, guys I appreciate you taking the question.
Kind of back to the to the prior questions around partnership.
Do you have enough do you have enough ability to differentiate the dark assets. So that you can license on a compound by compound basis or do you think it'll be more of a.
Platform type deal.
I don't know how much work you've done I guess, that's what I'm trying to get at.
Yeah.
Yes, Thomas I think it depends right on on what type of partnership it is certainly there.
In this library of assets that we acquired.
There are those that cross the blood brain barrier <unk>.
<unk> those that don't.
And our belief is at least from some of the some of the you know.
The broad research.
Out there on <unk> that there may be opportunities for these kind of products end up in a disease like Alzheimers disease for example, where you'd need to have that blood brain barrier penetration.
I'm not sure you'd want that otherwise so we do see where you might be able to break these up they've also.
Theres also different families that are involved in this in terms of.
Or the how the products were originally developed so there are a couple of different ways, we could choose to do that it all depends on the part D. What they're interested in and certainly what they might be offering.
And then.
This is a bit of a hypothetical on a hypothetical but given how crowded and competitive.
The AG market is for example, when you guys are thinking about Biomarkers or are you thinking about I'm just curious how youre thinking about those kind of from a from a response recognition all the way through to something that could be used for value based contracting I'm. Just curious how comprehensive that thought process is or how you guys are factoring that into the studies because I realize youre already collecting biomarker.
In the ongoing study.
Yeah, a couple of things there one is remember it's important that we've always said that although we're going to do this first.
A study in patients and a D. It isn't necessarily where we're going to go.
A really useful.
Treatment to to understand the drug and understand how it is impacting someone with with autoimmune diseases.
So it will be able to read an awful lot in that because it's again, it's easier to do that and also we have four weeks. So we think we'll get we'll be able to potentially see efficacy easier in that first in the first four weeks in a N a.
Atopic dermatitis patient all of that information will be what leads us to decide where we go in phase two.
And it isn't it isn't certain that it's going to be in a D. So the biomarkers were looking for a broader so that we can also have an understanding of other potential autoimmune diseases in terms of their ability from a payer point of view a little early for that one in terms of a value message. So we will we'll leave that one.
The rest for now, but Monica was there anything else that you'd like to add to Mike.
My superficial summary.
No I think that was that was pretty accurate obviously.
Some of it depends on what we're going to see from these biomarkers.
At this point, we will be looking at markers for assuring ourselves that we have engagement of the target that we believe we are engaging and also looking at markers within the disease again I just want to stress. This is a four week study. So it is limited we've said that there is going.
Going to the assessment of preliminary efficacy intentionally.
Because of the time allowed so some of these biomarkers will be able to provide information within the short period. Some of them will still have to study in the next study. So I think it's going to be a.
It's going to be an evolution as we move forward.
Understood. Thanks for taking the questions much appreciated.
Thank you we have no further questions at this time I would like to turn the floor back over to Robert <unk> for closing comments. Please go ahead Sir.
Thanks for taking the time this afternoon to listen to our update we're enthused about what the what the future holds for fresh tracks as a biotech exploring cutting edge treatment alternatives for patients suffering from debilitating autoimmune and inflammatory conditions.
Look forward to sharing additional updates on our development progress moving forward as always feel free to reach out to us anytime. If you have further questions have a great day.
And that concludes today's conference. Thank you for joining US you may now disconnect your lines.
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