Q3 2022 Quoin Pharmaceuticals Ltd Earnings Call
Hello, and welcome to the Cohen Pharmaceuticals Ltd, third quarter financial results and business update conference call.
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I'd like to turn the conference over to your host today Gordon Dunn. Please go ahead Sir.
Thank you and good morning, we appreciate you joining us on today's conference call with me on the call are Dr. Michael Meyers, CEO and Denise Carter C O.
Pleased to provide an update on our progress over the quarter and discuss coin Pharmaceuticals Q3, 2022 financial results. Please note that our operational and financial results press release is now available on <unk> website.
But again, Michael will provide a corporate clinical and operational update following which I will review our Q3 2022 financial results. I'll, then hand, the call back to Michael for further comments will also be pleased to answer any questions that you may have at the end of the call.
Before we begin I'd like to remind everyone that statements made during this conference call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that could cause actual results to differ materially from the information expressed or implied by these forward looking statements for more information regarding such risks and uncertainties. Please see the risk.
Factors outlined in the company's filings with the SEC.
Any forward looking statements made are made are made only as of today and we disclaim any obligation to update these forward looking statements other than as required by law. Please see the forward looking statements section in our financial results release issued this morning for more information.
Now my pleasure to turn the call over to our CEO Mike Meyers.
Thank you Gordon and good morning, everyone client continued to make significant progress in the last quarter as we executed on our plan to build the organization into a global rare disease company.
I'm very pleased to provide an update of our most recent achievements on this call today.
A key highlight of the quarter was the successful completion of a $16 8 million public offering which was twice upsize and heavily oversubscribed as a result of this capital raise coin is now funded into 2024, which is well beyond a number of key inflection points.
For the company.
Yeah.
During the quarter will continue to make significant progress towards our goal of delivering a safe and effective treatment for <unk> syndrome, a rare and devastating genetic disease for which there is currently no approved treatment or cure.
Significantly during this past quarter, we initiated a clinical trial.
And open to evaluate our lead product <unk> 003 in an accident patients.
As discussed previously this trial is a randomized double blinded vehicle control study it will assess two different doses of <unk> 003, topical lotion versus a placebo lotion and 18 nephthys in patients.
The test materials will be applied once daily over a 12 week period to pre designated areas of the patients body and as agreed with the FDA a number of different clinical endpoints will be evaluated.
This study will serve as the first cohort of a pivotal study for U S and EU approval.
As previously noted the FDA has indicated that a total of approximately 20 nurses and patients tested with cure at 003 at the commercial dose may be sufficient for regulatory approval in the U S.
Based on the positive and constructive feedback we previously received from the EMA.
We believe the similar number will also enable us to obtain regulatory approval for cure zero-zero three in Europe .
I am pleased to inform you that the majority of clinical sites are now fully opened with the remaining sites.
On target to open by year end.
In support of this study this quarter, we launched a dedicated website www dot <unk> syndrome clinical trials Dot com, which provides details of the study design.
The location of the clinical site and survey linked for patients interested in participating in this study.
We are also working closely with the first skin Foundation, and our <unk> Therapeutics, Inc. To maximize awareness of the study in the <unk> community and aid in patient recruitment, which is now actively underway.
Interest in this study remains very high among the nest and community and in fact, just yesterday a patient traveled almost the full length of the country to get to our Boston clinical site, where he will be screened today, it's our participation in this study.
We are seeing similar levels of willingness to travel great distances to participate in the study from across the country and also internationally as we frequently receive requests from overseas patients who are extremely eager to be recruited into this important study.
During the quarter, we also announced plans to initiate a second clinical trial to evaluate <unk> 003 and assets in patients who are currently receiving off label systemic therapy.
This trial will also be conducted under coins open our IND.
Application and will run concurrently with our ongoing clinical trial.
The clinical protocol has already been submitted to the FDA and patenting no comments from the agency, we will initiate patient recruitment next month.
With no approved treatments for <unk> syndrome, we are increasingly aware that some patients are being treated with investigators systemic therapies, including biologics in an effort to provide any level of relief to some but by no means all of the symptoms of this disease.
To maintain the integrity of our currently ongoing clinical studies patients must completely wash out of any systemic therapy in order to be eligible to participate.
For many patients this is a very difficult decision.
This continuing a therapy that is providing even modest relief would result in the return of all of their sales the symptoms.
<unk>, who enroll in our clinical trial, where there is a one in three chance that they will receive a placebo.
We fully understand.
How challenging is the decision that must be so in order to accommodate those patients we have announced our plans to run this second study.
This will be an open label study in approximately 10 metrics in patients who are currently receiving and will continue to receive off label systemic therapy throughout the duration of the study.
The trial will not be placebo controlled and all patients will have a 4% dose of QRS zero-zero, III, which is the highest dose applied once daily to pre designated sites under body everyday over a 12 week period.
As I just mentioned, we anticipate that this study will run concurrently with our ongoing study and we'll use the same clinical sites and the same investigators by availing of the infrastructure that we have already put in place for our current trial, we will be in a position to maximize the efficiency.
Of this new study, whilst minimizing incremental cost to the content company.
Fundamentally we believe that assessing the safety and efficacy of <unk> 003, as adjuvant treatment with systemic therapy could potentially yield valuable clinical data and possibly result in more treatment opportunities for patients and physicians.
I would now also like to take a moment and mentioned that as we continue to deepen our engagement with the necessary community of patients family members treating physicians and supporting foundations, we find ourselves more and more in all of the absolute strength and was.
<unk> that we see on a daily basis from this patient population, we are constantly humbled by the immense courage of this community something which only serves to increase our determination to provide a safe and effective treatment for this absolutely devastating disease.
Turning now to our research product research projects at Queensland University of technology, or <unk>, we continue to make great progress and are hopeful that one or perhaps both programs will initiate clinical testing next year, while still at a relatively early.
Age of development, we view these products as important components of our rare disease portfolio.
We are very pleased with the strength of this partnership and continue to be impressed with the quality and depth of the science being performed by the Qt researches.
The initial clinical testing will be performed in Australia, where cohen will be able to take advantage of the very generous incentives offered by the Australian government, including but not limited to a rebase of 43, 5% of all research dollar spent lender in these highly cost.
<unk> programs.
Comfort.
And finally <unk>.
During the quarter, we continued to expand our list of international distribution partners for Cure Act Zero-zero three on.
On July 15, we announced that we entered into an exclusive license distribution and supply agreement for the Canadian market with Endo Ventures limited a subsidiary of Endo International plc.
And those affiliate pilot and labs will be responsible for the commercialization of <unk> <unk> three in Canada. Once approved this latest agreement marks our eighth such partnership for Cure Act Zero-zero three that now covers 60 countries, including.
Australia, New Zealand, China, Hong Kong, Taiwan, and Middle East.
Central and Eastern Europe , Turkey, and parts of Latin America.
We continue to work closely with these partners to advance the development of <unk> 003 in their respective territories as they pursue the entry of the product into early access and compassionate use programs in their local markets.
With that update on our operational progress.
Let me turn it over to our CFO Gordon Dunn to discuss third quarter financial results.
Thank you Michael.
As Michael outlined in August we successfully completed a $16 8 million public offering which resulted in net proceeds of $14 $9 million after costs.
As of September 30.
Had $15 2 million in cash and marketable securities as compared to $2 7 million in cash as of June 30.
Michael also as Michael also mentioned, we expect our current cash and investments to be sufficient to fund the companys operations into 2024.
We reported research and development expenses of 750000 for the third quarter, which is primarily attributable to expenses related to our clinical trial and associated manufacturing costs as well as our research projects with <unk>.
Administrative expenses were $1 6 million for the quarter, we recorded an operating loss of $2 3 million and a net loss of $3 million per quarter.
I'll now turn it back to Michael to make some closing remarks and begin our Q&A.
Thanks, Paul in closing we are extremely pleased with coins progress over our first 12 months as a publicly traded company.
Our clinical trial evaluating our lead product candidate <unk>.
Three for <unk> syndrome has been initiated under an open IND.
And we look forward to updating everybody on our studies progress.
Underscoring coins leadership position in the <unk> syndrome space, we're excited to announce our plans to initiate a second clinical trial that will enable patients who are not eligible for our current study to participate.
Also we increased the number of international licensing and distribution partnerships to eight during the quarter with the signing of our latest deal for Canada.
This now brings the total number of countries covered under these partnerships to 60 and we continue to work closely with each of these partners.
Operator, we are now ready for questions.
Thank you at this time, we will begin the question and answer session.
I'll ask a question you May press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble the roster.
Yeah.
And the first question comes from Adrienne <unk> from fireworks solemn.
Good morning, everyone. Good morning, Michael Gordon. Thank you very much will be presentation of working out.
Through the achievements in the last quarter.
So I have several questions.
Michael could you walk us through the inflection points in 2023.
The ones that you described in a sense that.
I know you mentioned that you have funding through 2024, but wanted to understand how would you describe those inflection points in 2023.
Thank you Ed and good morning, I appreciate the question.
So two key inflection points will be from the necessary clinical trials.
The first study, we anticipate will readout.
First half of next year and the second study.
Probably read out right around the same time, so you're going to have two very.
Partner in.
Inflexion points here as these will be the first.
Clinical data from formal clinical studies for this disease. So so those are two very important inflection point for the company.
Yes. This is this is helpful. Yes, obviously trial readout are huge inflection points.
So regarding to recruitment for these two trials. So I know you got the Europe side.
The Netherlands syndrome, and you've got a survey asking patients.
The disease and what their how they are being treated with so could you share any information how many how many patients actually.
Hum uploaded the data how many requests we received so far and overall just share with US your perspective about the.
<unk>.
In both trials so far.
Yes, so we have not released any numbers yet regarding number of patients that have been screen.
Are any patients that have been fully.
Fully enrolled in the study we intend to do so.
But what I will tell you is for this first study we are taking a very systematic approach here to it so so patients first.
Go through the survey.
Those phone calls.
And they come to the <unk>.
The site, where their screen they have to get the genetic testing done because we wanted to be sure that every patient.
Who is enrolled in the study.
Actually highest <unk> syndrome, and not some other related disease, because misdiagnosis as you know can be a problem here. So what you see is kind of this systematic process to get patients.
Into the study and then you have got this kind of hockey stick.
Fact, where once that time lag has lapsed than the patient recruitment starts to come very very quickly. So there's an initial lag as we go through the walk, but then it starts to move very very quickly.
While at this on this call I'm, not giving any numbers I will tell you that I am extremely pleased with the rate of recruitment and again as we mentioned.
Overall interest level, we have a patient from Canada, who is driving to Indiana on a regular basis to participate in the study.
I've been doing this for 35 years and with.
We used to have to chase patients to get them into the study.
We're not seeing anything like this so I feel really good about where we are.
Is this adult patients adult patient driving all patients currently.
Our adults the FDA prefer that you start with adult before you move to children. So so these two studies are adult only and then the next cohort of this study will be adults and children and probably primarily children.
The good news is that most of the children today have the genetic testing already done it.
Adults it wasn't that available back in the day.
But nowadays so.
Children will not have to go through that process and we feel like that that would be a faster entry way into this study.
Okay understood and would you would you envision at all that you would file.
NDA for <unk>.
<unk> combination said and not the combination like on top of biologic not as a single agent.
Would you envision that scenario at all.
It's a really good question, it's something we're thinking about it's something we're talking about we're discussing it with the appropriate experts I'm not going to rule it out I'm not going to say, we're going to do it.
But at this point, it's a little bit TBD, we expect zero three to be frontline therapy for all <unk> patients.
This study the second study should hopefully show that it's safe and effective to be used in combination with a biologic. So bear in mind that these biologics are not approved to treat nathanson anyway. So it's.
There would be a whole process there that wed have to undertake so I'm going to.
Answer it as a maybe.
We will have further discussion about it.
Got it got it.
Publications 4003.
Do you can you give us any timelines with you planning to.
Publicize any of the findings or any sort of reasons why you believe your agility will be good.
And a treatment Andy maybe preclinical data anything that would be relevant for us to sort of establish appropriate approval builds a success for the drug.
Absolutely. So we will embark on a publication strategy once clinical data.
Reads out.
So we're not going to get ahead of ourselves here.
Look, there's obviously competitive reasons as well that we want to keep a lot of this.
Under wraps.
We're continuing to explore new intellectual property opportunities, but once we have data we will certainly.
Published that data and make it freely available.
Got it and then last question I have regarding financials. So you have $15 million almost in cash and then you have short term and long term liability due to officers.
About $4 2 million or something could you explain to us what what.
There is.
Yeah, well first of all the cash is about $15 2 million. When you look at the cash and marketable securities which are T bills.
In terms of the <unk>.
Our liability to officers.
The founders of the company Michael Denise.
Essentially we're working without any pay and incurring expenses for years before the company.
Finally got funded first some pre merger and then at the merger.
So we agree with the investors at the time that the.
That those liabilities will be repaid over time and that's what we're doing at a rate of 50000 per month to the two officers.
Got it okay. Thank you very much for taking my questions.
Thank you and the next question comes from Jason Butler with JMP Securities.
It's Roy in for Jason Thanks for taking our questions. Just a couple of quick ones for me.
The patients that are on the off label systemic therapy, what proportion of the patient population.
Do you think that subgroup represents and it sounds like you believe those patients are getting minimal benefit from the systemic therapy, if youre, hoping to see a signal from O three over that.
Yes, so it's hard to first of all right. Thanks for the question, it's hard to quantify the percentage.
First of all it's not being reimbursed.
So it's money coming out of their pocket.
And these biologics as you know are very expensive. So so that that's a limiting factor.
And.
For many of them they don't see any benefit whatsoever, so that they come off them. So there is probably.
Im guessing.
Estimating here less than 10% of patients who are on these biologics now everybody's on something right because.
They're willing to try anything steroids, just really any.
Anything at all to provide even minor relief. So what we do know is for patients to get some relief from the biologic. It helps with the pruritus because they suffer from extremely terrible edge.
So that's really the only effect.
That you see maybe a little bit with the inflammation as well.
But I would put it at maybe.
Maybe 10%.
Okay, Great and then do you plan to have the two trials readout at the same time or do you think the ongoing trial can read out first and then how are we going to see all the doses that at the same time are you going to give us data from one dose before another thanks.
No.
I suspect they'll probably read out around the same time, I mean curiously enough.
The second trial with smaller number of patients.
<unk> may actually read out a little bit faster.
But I am anticipating around the same time and we will provide data from all the doses. So all the data will be released at the center.
Thank you.
Thanks, a lot.
Thank you and the next question comes from Jim Molloy with Alliance Global partners.
Hey, Mike Thanks for taking my question.
On the two phase threes that are running I apologize I've misheard is it now in the second half 'twenty state.
Getting the top line on these are still remain to be seen depending on how the hockey stick on traction picks up for enrollment.
Yes so.
We're still tracking towards mid 'twenty, three Jim if that changes, we'll alerts but.
So far that seems to be the the.
The pace that we're on.
Excellent and then on the second Phase III, you mentioned, 10% of biologics.
Everyone's getting something.
So the second phase III includes folks on steroids or really anything, but including the 10% essentially on biologics.
So just to be clear Jim.
The second study is not a phase III. This is more of an investigational study.
As I said, there is no placebo control.
So.
Patients.
Who are both systemic and topical therapy. So so if you are on topical therapy, you just have to wash off the topical therapy for the site, where the products will be will be applied to the rest of your body. You can continue to use the topical steroids.
So but the main thing here is that for patients who are on systemic therapy. They stay on that systemic therapy throughout the course of the 12 week.
We see is there.
Any incremental benefit.
And hopefully no no safety signals, which we do.
We don't anticipate that anyway.
Understood understood, maybe moving over to <unk> for our debt.
Have you on our recently had some positive some positive data out crystal is looking for a producer in February in Amarin.
I guess, they got deemed by the FDA.
How does sort of the movement over in yard debit space.
Changes are not changed your expectations for R&D.
For all four in our debt.
So really good question and first of all as you know <unk> produced positive data in the past couple of weeks and wed like to take the opportunity to congratulate him on that because clearly this is a patient population that's in dire need of an effective treatment.
As you said.
<unk> had a setback with the FDA.
And lasalle or expecting to get.
Yes, or no in terms of approval.
I think by the end of February .
Next year.
Look there's no one size fits all opportunity here. Some of these other products can't be used on all patients because it's just not technically feasible. Some of these other products have manufacturing challenges that may make things a little complicated for them our product is a very patient friendly.
Lee and easy to use topical lotion.
I will say by middle of next year, we'll be in a position to make a go no go decision as we've said before if we think there is a commercial opportunity for us we will be in a position to move.
Very quickly we had very positive feedback to our pre IND submission. The clinical protocol is written product can be manufactured very quickly.
So if we make the decision to move and we will do so quite quickly, but we will not chase something thats out there.
And.
Yes.
Theres still more.
More shoes.
To fall on mobiles to drop.
<unk> next year and as we see what happens then we will make a decision but I would.
Guide you towards the middle of next year is a reasonable timeline for us too.
To give a go no go decision.
Excellent. Thank you for taking the questions.
Thanks, Jim.
Thank you and once again, please press star and then one if you would like to ask a question.
And we do have a question from <unk> <unk> with Maxim group.
Hey, guys. Thanks for taking my taking my question just a quick question. The patients that are on the biologics, which biologics. There are these like anti TNF inhibitors are they.
If youre looking at bitters or were already taken.
It's <unk>.
Primarily to do.
<unk> and <unk> those are by.
By far the ones that are being used most frequently.
Got it and I think for statistical purposes, how do you plan on addressing the fact that there's so many patients that are on concomitant therapies.
Your stomach therapies, yes.
So thats why for the first study that we're running they have to wash completely out of that so so they will nobody in the first study will be on any systemic therapy whatsoever.
They can use topical therapy, but they have to wash offered for the sites, where our products will be applied.
For the second study, obviously, then patients can be on systemic therapy and they they.
Stay honest for the duration of the study, but the the first study.
The eligibility requirements are extremely rigorous and patients have to wash out over a 12 month period to make sure. There is no systemic therapy left in their system whatsoever.
Alright, thank you.
Okay.
Thank you.
Concludes our question and answer session I will now return the call Dr. Michael Myers for any closing comments.
Thank you very much I would just like to conclude by thanking everybody for their participation here today and their ongoing interest and support in coin. Please feel free to reach out to us with any questions or comments, either by email or by phone.
We're always available so thank you and good morning.
Thank you. The conference has now concluded. Thank you for attending today's presentation you may now.
Your lines.
Yeah.