Q1 2023 Veru Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to very linked Investors' conference call Hopper.
All participants will be in listen only mode should you need assistance. Please send them a conference specialist by pressing the star can you followed by zero.
After this mornings discussion there will be an opportunity to ask questions. Please note. This event is being recorded.
Now, let's turn the conference over to Mr. Sam Fisch, Fairway Inc's executive director of Investor Relations and corporate Communications. Please go ahead.
Good morning, the statements made on this conference call may be forward looking statements forward. Looking statements may include but are not necessarily limited to statements of the company's plans objectives expectations or intentions regarding its business operations regulatory interactions finances, and development and product portfolio.
Yeah.
Such forward looking statements are subject to known and unknown risks uncertainties and our actual results may differ significantly from those projected suggested or included in any forward looking statements.
Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings as well as in our press release. This from time to time I would now like to turn the conference call over to Dr. Mitchell Steiner <unk>, Chairman CEO and president.
Good morning with me on this morning's call are Dr. Gary Barnett, the Chief Scientific Officer, Michele Greco CFO C E O micro perversity EVP General counsel of corporate strategy, and Sam Fisch Executive director of Investor Relations and corporate communications. Thank you for joining our call zero is a biopharmaceutical company.
Focus on developing novel medicines for COVID-19, and other viral at a R. D S related diseases and for oncology. The company has a commercial sexual health program called you Rev, which includes two F D. A products and chassis and new treatments are benign prostatic hyperplasia, and yesterday to condom internal condom dual protection against them.
Planned pregnancy, and the transmission sexually transmitted infections.
Revenue from the sexual health program is being used to partially fund the clinical development of our late stage therapeutic candidates, which aim to address multibillion dollar premium market opportunities.
Morning, we'll provide an update on our COVID-19, so busy dealing clinical program the clinical development of oncology drug pipeline and the commercialization of our products in the U S program.
We will also provide financial highlights for our first quarter fiscal year 2023.
First I will update you on the status as a busy beulah and investigational drug candidate for the treatment of hospitalized adult COVID-19 patients at high risk with our D. S, which is a lead indication for our infectious disease program.
We reported positive results from the phase III COVID-19, clinical trial, which is a double blind multicenter multinational randomized placebo controlled study evaluating daily oral nine milligram doses are busy building the 21 days versus placebo in 204 hospitalized modern severe COVID-19 patients who had high.
I wish the E R D S and death.
On April eight 2022, the independent data monitoring committee conducted a planned interim efficacy analysis in the first 150 subjects randomized in the phase III COVID-19 study after reviewing the unblinded clinical data the independent data monitoring committee unanimously recommended that the phase III.
He'd be halted early due to clear clinical efficacy benefit the independent data monitoring committee also remark that no safety concerns were identified.
In this interim analysis, so basically only treatment demonstrated statistically significant 24 nine percentage points absolute reduction and a 55, 2% relative reduction in all cause mortality by day 60, the primary efficacy endpoint of the study and the P value equals 0.00 for two.
The advocacy was further supported by the consistency of the mortality benefit across subgroup analyses of the primary endpoint clinically meaningful reductions in deaths were so busy people and treatment compared to placebo was observed regardless of the standard of care treatment received baseline W. H O ordinal score sex age baseline Comorbidities BMI.
With geographic location and.
In the full final dataset of 204 randomized patients the all cause mortality benefit was similar to the positive clinical results observed in the interim efficacy analysis population, which appears to be on treatment, resulting in a 51.6% relative reduction in deaths compared to placebo.
P values viewpoint 0046 days.
Data from the key secondary efficacy endpoints demonstrated so busy building treatment resulted in a significant reduction in days in the ICU days on mechanical ventilation days in the hospital compared to placebo.
It should be only also had an acceptable safety profile significantly fewer adverse or serious adverse events were reported for suppose you'd be willing compared to placebo did well also fewer treatment discontinued discontinuation due to adverse events in this busy bulent group compared with placebo.
<unk> three reported safety profile suggests it should basically be able to treat and may have resulted in fewer COVID-19 related morbidities, especially respiratory failure pneumothorax acute kidney injury cardiac arrest that septic shock and hypotension next.
Next I will update you on the U S and international regulatory progress cause you visit below one for the treatment of COVID-19.
On may 10th 2022 we had a pre emergency use authorization meeting with FDA in this meeting FDA agreed that no additional efficacy studies would be required to support an emergency use authorization or an NDA pending review FDA also agreed that no additional safety data would be required to support in any way, but the.
Safety data under the EUA, which satisfy the safety requirement for an NDA FDA confirm these positions in writing in the meeting minutes, which was sent to US after this meeting.
Based on the Fda's feedback from this meeting on June six 2022, we submitted a request for an EUA application to F. D. A.
On November 9th 2022 the U S. F D A's pulmonary allergy drugs Advisory Committee met with the company to review his request for EUA of Sebaceous Bjorn, Although the advisory Committee voted eight to five that the known or or potential benefits. The service Bureau, and when used for the treatment of adult patients hospitalized with COVID-19 and high.
We are D S do not outweigh known or potential wishes to visit fueling there was additional discussion by device committee around possible clinical trial design aspects of a potential confirmatory phase III clinical trial as a post EUA authorization requirement F. G supposed to consider the input of the Advisory Committee as part of its review.
E way, but FTA makes a final decision on the emergency use authorization application. We believe we meet the criteria for EUA issuance based on FDA guidance.
One COVID-19 is a serious or life threatening disease or condition to based on the totality of the scientific evidence available it's reasonable to believe that she busy people and may be affected.
Three benefit risk benefit analysis, the known and potential benefits are so busy dealing with just the mortality benefit outweighed the known and potential risks.
There are no adequate approved and available alternatives to the candidate product for treating the disease condition.
It's been three months since the FDA Advisory Committee meeting and we have been in contact with F. D. A and they have communicated to us they were still reviewing our request for EUA. We however, do not know Wendy F. D. A will act on our EUA.
January 30th 2023, the White House office of management and budget announced that the Biden administration clients Determinate COVID-19 National public health emergencies on May 11th 2023 the United States Department of Health and Human resources Human services also known as H H S. However, also had declared in.
National Emergency, which is separate one from the White house in 'twenty, 'twenty, and which is still in effect and based on current information is expected to remain in effect beyond may 11th S. H H S. Governed C. F D. A D F D. A to avoid confusion also announced on January 31, 2023 that they may 11th termination we're not in.
Packed F G H ability to authorize new treatments, where emergency use that existing E waste would remain in effect and then it may continue to issue new E waste when criteria for issuance are met.
That's where our regulatory progress outside the U S. On July 27, 2022 we announced that the European Medicines agency. The EMA <unk> Emergency Task Force had informed the company that has initiated a review of <unk> for the treatment of hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome.
The review will assist the 31 EU member States you may consider allowing use of the medicine before a formal marketing authorization is granted there's usually a busy beulah and is the first to be triggered under article 18, as the new EU regulation. They expanded the wells the EMA during public health emergencies in 2022 we have been in active communication.
Patients with emergency task force as they complete their review should be should be on and once the emergency task force completion of review they will submit their formal recommendation to the Ema's Committee for medicinal products for human use also known as C. H M. P. C. H M. P. Then reviews the recommendation that renders an opinion, whether she busy people and qualifies for emergency use in Europe .
Is the E M E authorizes the emergency use under article eight team than the individual nations in EU may authorize it basically you want to use.
We've also completed our final rolling submission to the access consortium nations, which composed of the following regulatory agencies Uk's medicine, and healthcare products regulatory agency also knows MH or a Switzerland Swiss medic.
Australia's therapeutic goods administration now there's T G E and the access consortium is to collect as a coalition of certain regulatory authorities with therapeutic products that work together to promote greater regulatory collaboration and alignment of regulatory requirements. This month, we expect to also complete our final rolling submission to health Canada.
It.
In summary, we have submitted regulatory requests for emergency authorizations to the European Union, United Kingdom, Australia, Switzerland, and Canada. We're also in various stages of discussions with regulatory agencies in other countries to obtain emergency or extradite authorizations were so busy bulent, including South Korea, Israel, Egypt, New Zealand and south at.
Africa.
Turning next to our U S and international so basically only commercialization preparation update in anticipation for the potential commercialization. So busy bulent, we have scaled up manufacturing processes. They have enough commercial drug supply on hand to address the expected drug needs. Following a potential authorization in the U S and Europe as well as other potential international.
Musicians and approvals.
An update for the commercialization so busy people in the U S. We currently have in place an experienced team to commercial icy bits of fueling we have also executed contracts with wholesalers, who specialized hospital distribution services are so busy bueller.
We believe we are ready to launch the busy bulent to hospitals across the United States if were granted emergency use authorization soon.
We also have established Bureau international.
To commercialize to busy bulent to the rest of the world, we're making great progress and the potential international commercialization is too busy bulent.
In January of 2023, we had additional discussions with the health emergency PREPA preparedness and response authority also known as Harris H E. R E, which is part of the European Commission Harris Who's responsible for joint procurement framework contracts, which offers 36 participating countries the possibility of joy.
Lee procurement medical drugs, and countermeasures as an alternative or complement to procurement at the national level.
Procurement framework contracts had been previously signed with Gilead Hoffmann La Roche and GSK and most recently in November 2022 with Pfizer company.
Company is also making great progress signing up international commercial partners to assuming appropriate regulatory approvals facilitate securing she busy people and government purchase orders to COVID-19, as well as ensuring seamless flow so busy bulent to their countries. It's a messy on farm in South Korea.
Value of farm in Canada have publicly announced partnerships with fear Ru. We also have signs commercial partnerships in China, Australia, New Zealand and Egypt with highly regarded local partners and although they have not publicly announced these transactions yet they have been diligently working on the commercial opportunity for several more.
Now we have been engaged for some time of negotiating partnerships also with Germany, Italy, the United Kingdom, Ireland, Spain, Switzerland, France, Israel, and Taiwan well.
We're also excited to expand the investigation I suppose you bulent to other infectious disease indications based on the drug candidates novel mechanism of action. If we receive an emergency use authorization in the U S or other authorizations outside the U S at least a substantial new revenue.
As we have preclinical in vivo data that demonstrates that busy people and has activity against H. One N. One variant and influence a a also known as the swine flu we plan to conduct a phase III clinical study to evaluate she busy bulent in hospitalized adult patients with influenza, a who had high with our G. S infill.
I went to a virus causes up to 52000 deaths, a 710000 hospitalizations each year in the U S. Similarly, it's a busy few months authorizing commercialize we also plan to conduct a phase III clinical studies busy bulent for the treatment of hospitalized adult patients with patients with viral a R. D S which would include respiratory.
Syncytial virus, which alone causes 14000 deaths and 177000 hospitalizations each year in the U S.
As we have outlined above so busy billing as a novel antiviral anti inflammatory is positioned to potentially become a valuable treatment option for multiple infectious diseases that can lead to a R. D. S. A life threatening lung condition that has a high mortality rate.
I will now briefly discuss the progress of oncology drug portfolio focused on advanced breast and prostate cancers in advanced breast cancer, we have been actively enrolling two registration clinical trials.
Test phase III clinical trial in approximately 210 patients to evaluate the Novus arm monotherapy with a third line treatment of Arab positive ER positive her two negative metastatic breast cancer and number two the second trial.
Phase III is the enabler phase III clinical study in approximately 186 patients to evaluate the efficacy and safety of the Novus arm and the Burma cyclic combination therapy versus an alternative androgen blocking estrogen blocking agents in subjects with ER positive ER positive her two negative metastatic breast cancer.
First line therapy with Pablo sick lip, which is CDK four six inhibitor plus an estrogen blocking agent we have a clinical trial collaboration.
Excuse me clinical trial.
Trial collaboration and supply agreement with Lilly for the enabler to phase III clinical study under the terms of the nonexclusive clinical trial collaboration and supply agreement Bureau is responsible for conducting the clinical trial, while Lilly is supplying a M. A cycle for the study.
There remains full exclusive global rights to know besides the phase III you know enable us to study has two stages stage, one is a pharmacokinetics and safety assessment and the combination of a nobu shama, the Burma cycle to make sure that no drug to drug interactions, resulting in changes in blood levels of either drug and there are no.
Safety added safety concerns before going to stage two stage two is the actual phase III study, we have completed phase one which consists of three patients and there are no changes in your expected blood levels, where nobody's arm or Burma cycling when given in combination and the combination is well tolerated interestingly evidence of objective.
Antitumor activity was observed in target lesions at the eight week C. T scan and all three patients as follows the first patient had a 50% reduction of an adrenal metastasis second patient had a 21% reduction.
And metastasis and the third patient had a 71% reduction of liver metastasis.
<unk> trial the stage two portion of the trial as I mentioned is enrolling.
In advanced prostate cancer, we have been actively enrolling a phase III and phase II clinical trial, we have been actively enrolling an open label randomized multicenter phase III veracity clinical trial evaluating so busy building 32 milligrams versus an alternative androgen receptor targeted agent for the treatment of chemotherapy naive men with metastatic castration.
[noise] resistant prostate cancer, who had tumor progression. After previously receiving at least one androgen receptor targeted agent. The primary endpoint is radiographic progression free survival enrollment for the phase III that veracity clinical study is ongoing SEC.
Our second clinical study in prostate cancer is evaluating if you're 100 Gnrh antagonist three month depot formulation and a phase two dose finding clinical study for the treatment of hormone sensitive advanced prostate cancer.
As we will discuss later.
Currently evaluating our clinical trial priorities and spending as we await decisions by F D. A European regulatory and other bodies answer busy bulent for COVID-19, and we worked and we're working to conserve cash.
When decisions on re prioritization of suspension of any trials the termination of any trials or programs or any modifications to our R&D efforts have been finalized we will communicate them to you.
Bureau has a commercial sexual health program called you Rev, which includes two F. D. A approved products F. C. Two and then Tad fee. We have built the infrastructure to allow for broad market access to F. C. Two across the U S. As a result F. C. Two is now available through multiple sales channels, we have partnered with telemedicine platform sexual.
<unk> companies to bring FCT products to patients in a cost effective and highly efficient.
Highly convenient manner, Fortunately to telemedicine sector in global public sector ordering have underperformed across the board. This past calendar year. It does appear however that market conditions are improving and we are seeing revenues increase in Q2 fiscal year 2023, we also haven't taffy and FDA approved neutral.
Even for benign prostatic hyperplasia, it's currently prescribed.
BPH medicines may lead to the most common side effects of sexual of adverse events and Tad V has demonstrated its faster and more effective treatment option for BPH and finasteride alone and does not cause sexual side effects with <unk>.
Launches product during the fourth fiscal quarter of 2022 with a focus on payer agreements as well as executing distribution wholesaler in Medicare contracts. In addition to in addition to the traditional distribution well also seek and distribution to Garth good Rx and telemedicine partners.
I will now turn the call over to Michele Greco CFO and CEO to discuss the financial highlights Michelle.
Thank you.
In fact, the Sanger indicated we continue to have a lot of ongoing activity at zero.
Let's review the first quarter results overall net revenues were $2 5 million compared to $14 1 million in the prior year quarter.
The U S prescription business net revenues decreased to 163000 from $11 $6 million in the prior year period.
The reduction is due to some business challenges experienced by a telemedicine customers in recent quarters, which resulted in a slowdown in orders.
Revenue for the global public health sector business with $2 $3 million compared to $2 $6 million in the prior year period.
Overall gross profit was 700000 or 28% of net revenues compared to $11 $8 million or 84% of net revenues in the prior year period.
The decrease in gross profit and gross margin is driven primarily by decreased sales.
F C two prescription business.
Operating expenses for the quarter increased to $36 $3 million compared to the prior year quarter of $16 $8 million.
The increase of $19 $5 million, primarily due to research and development costs, which increased $8 $7 million to $18 $7 million from $10 $1 million in the prior year period.
The increase in selling general and administrative expenses of $10 $8 million from $6 $7 million in the prior year period to $17 $5 million in the current period.
The increase in research and development costs is due to the increased costs associated with the multiple in process research and development projects, mainly for the phase III the visit beyond COVID-19 registration trial and manufacturing costs.
$8 million for prelaunch inventory and increased personnel costs, resulting from increased head count and an increase in the fair value of share based compensation.
The increase in selling general and administrative expenses was primarily due to commercialization costs of $8 $4 million related to preparations for the potential launch it's the discipline for COVID-19 incurred in the first quarter of fiscal 2023, and an increase in share based compensation costs, resulting from increased head count and in ink.
And the fair value of share based compensation.
The operating loss for the quarter was $35 $6 million compared to $5 million in the prior year quarter.
Change of $36 million due to the increase in research and development costs and selling general and administrative expenses during the current period and the reduction in the net revenues and gross profit during the period.
Non operating expenses were $1 $3 million for the current year quarter and for the prior year quarter, which primarily consisted of interest expense and change in the fair value of the derivative liabilities related to the synthetic royalty financing.
For the quarter, we recorded a tax benefit of $68000 compared to a tax expense of $115000 in the prior year quarter.
Bottom line results for the quarter was a net loss of $36 $8 million or 46 cents per diluted common share compared to $6 $4 million or eight cents per diluted common share in the prior year quarter.
The company isn't that operating loss carryforwards for U S. Federal tax purposes of $112 $5 million with $29 7 million expiring in years through 2042, and $82 $8 million, which can be carried forward indefinitely.
And the UK company net operating loss carryforwards of $63 $1 million do not expire.
Now looking at the balance sheet as of December 31, 2022, our cash balance was $46 $9 million and our accounts receivable balance was $3 $9 million. Our net working capital was $32 $9 million at December 31st 2022, compared to $63 $3 million at September 32002.
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During the quarter ended December 31, 2022, we used cash of $34 $5 million for operating activities.
The expected future revenues from the busy beyond COVID-19, if authorized and the continued revenue from the sales of Etsy to in the U S prescription channel and the global public sector added to our current cash balance should continue to be the primary sources of funds, we use for commercial activities and to invest in our promising pharmaceutical clinical.
Development programs as we continue to focus on developing novel medicines for COVID-19, and other viral and air D S related diseases and for the management of breast cancers.
If they did the deal and it's not all right in the U S or elsewhere. In this current calendar that we have to seek additional sources of funding. If we are unable to reduce their spending to sufficient degree.
Now I'd like to turn the call back to Dr. Steiner.
Thank you Michelle and January of 'twenty to 'twenty three the Los Angeles Times published an article by Doyle Mcmanus entitled Bite Instead, the pandemic is over but the pandemic one cooperate Mcmahon Mcmahon has further states, but the pandemic has an over we're just pretending. It is so last month W. H O. So the world Health organization.
<unk> concluded the COVID-19 remains a public health emergency of international concern. This declaration underscores that the COVID-19 virus and its resulting impacts werent long term public health action as we enter the fourth year of this COVID-19 pandemic.
According to the CDC in the United States. They have been 1 million 106824 deaths related.
Related to Covid currently the weekly average for new Das is 3452 people approximately 500 deaths per day. The weekly average with new primary COVID-19, hospitalizations, It's 24213 patients with 3459, new emissions per day.
But 19 is the third leading cause of death in the United States behind heart disease and cancer COVID-19 is a serious disease.
An effective and safe oral therapeutic to treat hospitalized moderate to severe COVID-19 patients who had high wish for lgs. It prevents death is desperately needed. We strongly believe that so busy bulent, an oral therapy with dual antiviral and anti inflammatory properties can serve as this new treatment modality that addresses and overcomes the threat of death that hospitalized moderate.
If you're a COVID-19 patients continues to face.
We have pivoted our company to establish an infectious disease program, which so busy butyl and as the lead drug candidate in a phase III study she busy people and demonstrate a clear clinical benefit and hospitalized modest severe COVID-19 patients I wish we are D. S in depth because of superior bulent mechanism of action it.
Has the potential to treat other virally induced a R. D. S. L. D. S remains a worldwide unmet serious medical need. In addition, we continue to advance our linked core late clinical stage breast cancer and prostate cancer programs.
We're a cash burn position, we've been able to parse some of our spending as we are now in a waiting mode, while multiple regulatory agencies across the world reviews are busy bula as a potential option for emergency use over the past few months, we've been proactively preparing multiple work streams for commercialization in the background.
Instance, manufacturing drug supply and scale up activities are in place are U S and international commercialization infrastructure is ready to provide access to visit bulent hospitalized COVID-19 patients I wish we are D. S and death, if authorized we're working to prioritize our clinical development portfolio, we have begun to slow our clinical development.
Spend and we continue to evaluate the appropriate timing and spending of our planned clinical studies. Furthermore, we have a near term strategy to drive FC to sales as follows.
Seek to initiate additional in strengthening current telemedicine Internet pharmacy service partnerships, we have created and launch our own dedicated direct to patient telemedicine and Internet pharmacy services portal, we're pleased with the telemedicine portal as a growing source of revenue, making this strategic move has allowed us to both supply F. C. Two.
The other telemedicine providers and to have our own dedicated F. C to telemedicine portal that we can control and grow the website can be reached at F. C. Two condoms dot com, we expect to continue to increase U S public sector sales through our new agreements with the New York Department of Health and the new distribution partnerships with global protection.
As well as the faxes and we're also starting to see again, an increase in global public health sector orders as I mentioned, we're seeing improvements in F Q2 revenues in our second quarter fiscal year 2023, and if she and Taffy may also generate revenue and otherwise we expect to also have substantial.
Near term revenue <unk> nine milligrams for hospitalized COVID-19 patients and wish with Rds.
With that I'll now open the call to questions operator.
Yes, Thank you ladies and gentlemen at this time, we will begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad. If you are using a speaker phone. We ask that you. Please pickup your handset before pressing the keys to ensure the best sound quality.
Your question. Please press Star then two.
Please limit yourself to one question and one follow up if you have further questions. You may reenter. The question queue. Once again that is star one to rejoin the question queue.
We will pause momentarily to assemble our roster.
And the first question comes from Brandon Folkes with Cantor Fitzgerald.
Hi, Thanks for taking my question.
So maybe the first one from me.
What gives you confidence that HHS, one funnel, the whitehouse and winding down the Covid emergency.
Have they been public about anything.
Any precedent.
It's a tough one there and then secondly, maybe just on the cash situation can you just elaborate when you paused spending was post quarter end during the quarter and then any color on the magnitude of the spend you've been able to reduce and maybe just the urgency to either pull.
Some of the clinical trials will shore up our capital situation. Thank you.
Alright. Thank you so make sure I understand your first question is around the HHS correct.
Correct, yes, yeah. So the HHS is as I mentioned in my remarks is that there is there a separate group.
And and they govern the F D a and they have their own and they have and.
And they have declared their own declaration of emergency.
And so based on that the F. D. A came out the same days by the administration made the comment they're going to stop the National book.
Health, which is more has to do with policy and payments and that kind of stuff and may 11th.
2023 and.
The FDA stated that no way or they're going to not be able to continue to issue a new E U A's and and Furthermore.
E ways that are in effect remain in effect until HHS decides otherwise so everything I've seen at this point. If you go back it's called it's five to four is the name of the of the public health Declaration and and they have very.
Very specific times that for example, the HHS decides that they wanted to pull up.
The declaration than Medicare and Medicaid and some of these other things and will continue until the end of that calendar year also interestingly. The omnibus Bill that was passed also contains provisions to help transition for emergency use.
National Declaration by the by the government are too to a non emergency and so for example for Covid drugs and they they mentioned specifically part D.
They can go until the end of 2024 and actually be paid for.
And so even though you know may 11th as of date. So there is there are transition provisions.
Two do not lose.
Anything that we've done that that has been helpful and not go back into chaos.
As it relates to your second question.
So we did it with our biggest spend was as you would imagine in the first few months. After we heard about a you know.
Go ahead and submit your EUA and as you know when we met with the FDA. We submitted to you a very very quickly and then we went on you know the wait and so.
So, but what we but we knew that we could hear at any time. So it means that even back in the summer Ah we were increasing our spend to put the U S. Commercial team in place and put our commercial team is small.
Commercial team in Europe , and and and more importantly get ready for commercialization of our products with which is the manufacturing piece of it which means that we had to scale up so that we can provide commercial drug.
As soon as the FDA told US you know.
Yeah, you authorize if Europe since you're authorized so we hear from many of those were ready to go. So this so the spend happened then once the spend was done.
We were basically in a holding pattern and as you see it as you've seen we've had a couple of planned clinical trials.
<unk> that we just have not initiated a these are two in breast cancer. For example, and we're just holding on because we've got a whole cashews, we want to make sure. We can hold onto the cash so that we can understand.
At the time, we hear an authorization.
Not that you know we we we know what our situation is if we've got revenue coming in from separate from soup is appealing anywhere in the world are that's going to be significant then that will help you know help us judge Ah you know what we can do going forward priorities for example is that.
You know as you heard from the AD Com you know one of the discussions was around.
The agency being interested in a condition for EUA would be that you would have to do a phase III confirmatory study. So you know we've been again proactive in putting together the phase III study.
And and submitting it to the F D a.
But you know, but in terms of the number and the scope and all that stuff. We you know we just don't know at this point that we have full agreement. So so there's a lot of unknowns, but our focus is going to be on doing what we need to do to take a valuable drug likes to visit you only get it to patients and then to focus on oncology program.
That will get us to the finish line sooner and then to focus on driving revenue and our base business.
<unk>.
Michel do you want to add anything to that.
Yeah, I would just add that.
As Mitch indicated we needed to ramp up.
I mentioned during my comments you know we.
But $8 million during the quarter.
To get enough drug in place.
And as we've been working on our prioritization and.
And pushing back on cash you know that started we were we.
We believed we were going to be hearing soon so you know that we started talking about that making lists prioritizing things towards the end of a quarter and now into this quarter. Here. So you know a lot of the sudden takes time for it to come true you know and materialize.
But.
We're actively working on that.
Yeah.
Okay. Thank you.
Thank you and the next question comes from Leland <unk> with Oppenheimer.
Good morning, Mitch. Thank you for taking my question.
Want to ask is you control the spend.
We lead the potential E way with respect to the spend on the enrollment in the oncology trials.
Are you kind of pulling back there is that enrollment that's what keeps sacred but longer and can you just kind of let us know what the timelines maybe for updates on yeah yeah.
Yeah. So so so so the answer to that is that as soon as we have you know bandwidth better understanding what's coming in and what's coming out and we're evaluating as I said the actively evaluating I mean, we you know we did not expect to be sitting here with seven to eight months later I'm not hearing from the FDA now there is precedent is.
A company called <unk> pharmaceuticals that submitted their EUA to the F. D. A back in January 2022, and it took them a 11 months. It was not until November of 2022 that they heard that they had the UA. So you know we're completely at the mercy of the regulatory bodies to make a decision.
And and and so so what we have done now that we've answered this phase where we're still waiting there still reviewing.
That and you can see we still have sufficient cash, but we want to make sure the cash lasse and as you know because we have cash coming in and as I mentioned, our second quarter.
Fiscal year second quarter numbers are starting to move towards where we would expect them to be after having a little bit of headwinds over the last three quarters.
Then you know, we got Oh money coming in to and as you know we've done very well matching our expenses with what we bring in.
And but.
But we just have to we just have to spend a little bit more time, and then we'll roll out what we're thinking.
Okay, great. Thank you.
Thank you and once again. Please press Star then one if you would like to ask a question.
And the next question comes from <unk>, Chen with H C. Wainwright.
Thank you for taking my questions.
So without waiting for FDA response can the company advance some visibility into the clinical trial for.
Hospitalized patients for.
Yes, but excluding COVID-19 patients.
It's a very very good question.
If we do that then that would that would have to do so so far our discussions had been under the EUA and than than if we did that that would go under an NDA and technically it doesn't matter right. Because you have to do a study before you can get into for example are G. As it related to influenza and that kind of stuff and so.
You did touch on it very important point I mean, the thing that we cannot lose sight of is that we have an agent that are even after all of these COVID-19 drugs had been tried over the last three years and whether there are new drugs, whether the drugs had been repurposed whether you know whether there.
Biologics at the end of the day here, we are now in our fourth year of the pandemic.
And there's not much we can say I mean in fact, we have fewer drugs today than we had when we started because all the monoclonal antibody drugs had been pulled because they don't have activity against the current strain and so and the best we can do is dexamethasone at two 8% embarrassed sitting there Ben socialism Abbott you know again there.
Marginal and Thats, what we have and comes to visit Bulin.
And so busy Beulah and has a completely different profile and and and and and it has a different absolute and relative risk reduction in the sickest patients and so and we also know that the mechanism by which it happens is it similar mechanism that you see with influenza RSV and many of the viruses.
They use microtubules they get in and out of the cell and also a set off the cytokine storm that is responsible for our D. S and right now we don't have great day Rdf's treatments. So in some ways are there.
The reason we've pivoted.
Two are two to <unk> is because it's such an unmet need people are still dying when people died in flu and they die from RSV and a dying from Covid the dying at the hands of multi organ failure and they are D S and and we could make a big difference. So your point is well taken and that is that the company should be folks.
On the long term, which is yeah, you get you know, we'll see what happens with the emergency but more importantly is it you know out of the out of the out of the ashes of Covid comes a drug that you know came from nowhere basically because we would develop a gift for oncology and so yes, I think we do have a responsibility just like I said.
Mike earnings calls before we would duty bound to keep moving with some busy bulent and it turned out it played out to be a highly significant.
A clinically meaningful drug and AR and am and deserve to go into either a R. D. S. So so what we need to do now is to pause and we need to get past. Some of these regulatory decisions. I. You know you have to believe they have to come soon.
But again, there's there'll be weighted 11 months, but I'm not I have no information to say that I know exactly when and you know.
And but when once we once we get clarity than the assays are asset is an asset that's going to give you know resources now to them.
Potentially multiple regulatory bodies, saying, yes, but it's also an asset that that if if it doesn't qualify quote for emergency use has well established itself as a as a asset that should be continued to go into the you know the big unmet need of a R. D S.
And and people at high risk for a R. D S and death, so yes influenza with you know it's definitely one of the as I mentioned in my comments, it's definitely one of the studies because we're still stuck with a shot once a year. It still affects the elderly we still have to modify it and Theres still you know the death rate has been depending on.
The year, because it's seasonal you know it can be up to 60000 people a year die and you know as I mentioned in there over half a million hospitalizations and and most of them most of the Rds. It's virally induced they don't even they don't even check and see what virus. It is most of the time and so it's just a big big area to go into so so the sort of the wake up call for <unk>.
Zero.
It is that we have a real asset and we're going to you know we can do everything in our power to get it out there.
Got it and my next question is do you expect the if she too so.
To return to the levels seen in the <unk>.
Our fiscal first.
Second quarter of 2022, and if so how soon do you expect to return to that level.
It's a good question I'll have Michele answered that Michele.
Yeah Yeah.
Well that's for this quarter.
We're starting to see our revenues coming back to that level.
And our corridors.
First quarter and second quarter, you know as we've said before our customers experienced some headwind as Mitch said one of them you know had some issues.
Hum.
They had leadership changes they had rebranding issues.
They've rebranded again and so you know it's taken them a while to.
Take some of their internal issues another customer had similar internal changes and from some other problems that they've been sorting through and it's taken them a while it sounds like they've worked all that out you know we stay in close contact with these customers.
We've pushed through some of the issues as we developed our own portal, we've had some issues to tackle we've been working on those and cleaning those up so that we're starting to see an increase.
You know, but our visibility right now is into the second quarter, where.
Things look good for the third and fourth quarter, but you know a lot of it is still dependent on how how quick do.
So all their customers.
But all signs are pointing to it coming back to those levels.
Thank you and my last question is just to confirm that.
The room may terminate one of the ongoing breast cancer or prostate cancer trial.
Budgeting priority Zed.
Correct.
Again, we have not made a decision and and we're looking at we're looking at all options.
Sometimes just modification you know one one other extreme is just modifications or that kind of stuff. That's why I said, it's just too early to say, but what I can tell you is that we wanted to decrease our spend we wanted to prioritize.
You know the ones that are closest to the finish line, we want to ensure that we do everything we can to focus on that because at the end of the day what matters is data.
So we've got to get the clinical data.
And then we'll put a strategy in place to do that.
So that you know 2023 is sort of a year of enrollment and 2024 over the year of data and.
You know, especially now that you know COVID-19, even though it's still around it really impacted all clinical trials by all companies.
Because of all the rules that were put in place.
For you know Covid COVID-19.
Management, you know the Lockdowns and all that stuff as it affected everything.
And but now it's kind of moving the other way, even though you know even though the endemic numbers are pretty high but we are we're definitely seeing that you know the world is starting to come back and a lot of these a lot of these sites with fatigued because they were pulled to help with the pandemic and in many and you know as you know and you've heard.
Over and over about the the craziness, that's going there, but again, that's kind of passing as well so let us let us spend the time to to come up with a plan to to.
To understand how we want to position, our oncology program and and what.
What I can say for sure is batesville in an infectious disease is here to stay we have a real opportunity oncology you know we're committed to oncology. That's our other core asset. We have we have you know we have a unique assets they need to make their way through and as it relates to sexual health business you know it's always been.
A good source of revenue so that we can partially fund our clinical development and we're not beholden to the marketplace.
And and it feels good that after seeing the Q2 numbers fiscal year Q2 numbers.
Michelle said, it's kind of moving back to a position where it's significant revenue will come in and so that we can we can move these trials forward.
And offset some of that cost with what we bring in ourselves.
Thank you.
Okay.
Thank you ladies and gentlemen, this concludes our question and answer session I would like to turn the conference call back over to Dr. Mitchell Steiner for any closing comments.
Thank you. Thank you I appreciate everyone, who joined US on today's call and I look forward to updating all of you of our progress in the next investor call. Thank you again.
Thank you.
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