Q4 2022 Quoin Pharmaceuticals Ltd Earnings Call
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Good day and welcome to the Cohen Pharmaceuticals Ltd, fourth quarter financial results and business update conference call.
All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note. This event is being recorded I would now like to turn the conference over to Gordon Dunn Chief Financial Officer. Please go ahead.
Thank you and good morning.
We appreciate you joining us on today's conference call.
Me on the call are Dr. Michael Meyers, CEO , and Denise Carter C O L.
We're pleased to provide an update on our progress throughout the fourth quarter of 2022 and for the year as a whole and discussing corn pharmaceuticals financial results.
Please note that our operational and financial results press release is now available on <unk> website.
To begin Michael will provide a corporate clinical and operational update following which I'll review, our Q4 and full year 2022 financial results.
I'll, then hand, the call back to Michael for closing comments, we will also be pleased to answer any questions 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 can 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 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 press release issued this morning for more information.
It is now my pleasure to turn the call over to our CEO Michael Morrison.
Thank you Gordon and good morning, everyone.
2022 which will cause first full year as a publicly traded company was a truly transformational one for us as we successfully delivered across all of our key operational targets.
Before I begin a review of the operational highlights for 2022.
Wanted to take a moment and briefly comment on the public offering that point completed last month, which brought in net proceeds of approximately $6 million.
I'm pleased to inform you that almost every investor from our previous raised in August of last year participated again with some new fundamental investors also contributed.
As a result of this successful capital raise COO.
<unk> cash position is that its strongest ever and we now have a financial runway that extends well into the second half of 'twenty 'twenty, four which is beyond several key inflection points for our company, including the release of clinical data from our ongoing studies.
Furthermore, we believe that in addition to enable us to advance the clinical development of our product pipeline. This strong cash position will also support our plans to pursue attractive M&A opportunities in the rare and orphan disease space.
We are particularly interested in acquiring derisked late stage asset and while there can be no assurances of the deal will be executed I can tell you that we are actively exploring a number of potentially interesting opportunities.
Look forward to providing further updates on our progress on this front at the appropriate time.
One key highlights for coin in 2022 with the submission of an investigational new drug application or IND to the U S. FDA put his involvement of QRS 003, as a potential treatment for <unk> syndrome.
As a result of the successful opening of that RMB. We subsequently initiated two clinical studies and that's a 10 patient last year.
We also made substantial progress on the operational side by working very closely with our contract manufacturers, our CFO knows to advance the development and scale up of both the active ingredients in <unk> zero three as well as for the finished product itself.
We believe that this early and concentrated focus on CMC related matters will ultimately pay dividends and reduce the risk of coin the season.
Fleet response letter or <unk> from the FDA as a result of CMC related deficiencies in our regulatory submission.
As we have previously stated coin intends to self commercialize Prs 003, and indeed all of our other pipeline products in both the U S and Europe and we are actively working on plans to ensure that we will be fully prepared for a successful rollout of the product.
Those territories once approval has been obtained.
12 man those commercial plans, we worked diligently and successfully throughout the year to establish a broad based infrastructure outside of those tariffs those two territories.
As a result of those efforts we now have eight different commercial partnerships established that cover 60 countries, which is essentially all of the key countries for our products in the world.
Combination of these distribution partnerships and the commercial infrastructure, we plan to establish in the U S and Europe will enable them to achieve what is effectively a global launch of QRS.
Zero, three and the rest of our pipeline products.
This is something that we believe is a key differentiating feature from the BARDA company among our peer group with a focus tends to be primarily on the U S market alone.
It is also indicative of our commitment to ensuring that our product.
Will be made available to every patient who needs them irrespective of where they are located.
Turning now to the fourth quarter itself.
During the quarter, we announced that the first patient in our vehicle controlled study for lexicon syndrome was dose and since then we have continued to make further progress with the enrollment and dosing of additional patients.
Furthermore, five of our six planned clinical sites were fully opened by the end of the quarter.
Operationally ready to initiate patient recruitment and testing.
Recall that this trial is a randomized double blinded vehicle control study two different doses of QRS 003, topical lotion are being tested versus placebo lotion and 18 NASA 10 patients.
Materials are applied once daily over a 12 month period pre designated areas of the patient's body and an agreement with the FDA five different clinical endpoints are being assessed in the study.
This study will potentially serve as the first portion of a single pivotal study that we intend to conduct in the U S and Europe to obtain regulatory approval.
As previously noted.
CA has indicated that a total of approximately 20 patients tested with cure at 003 asset commercial dose may be sufficient for approval in the U S.
In addition, based on the positive and constructive feedback. We previously received from the EMA. We believe similar number may also be sufficient to enable us to obtain regulatory approval.
During the quarter, we also announced the initiation of a second clinical study to evaluate pure accident or zero three and SSN syndrome patients. This trial is also being conducted under coins open IND and is running concurrently with our other ongoing clinical trial using <unk>.
The same clinical sites.
Same investigator, resulting in a high degree of operational efficiency and cost savings.
This second clinical trial is an open label study in approximately 10 subjects, who are currently receiving and will continue to see throughout the duration of the study off label systemic therapy primary primarily systemic biologics the trial does not suggest ebook control and all pay.
<unk> will be tested with a 4% dose of <unk> zero, three which will be applied once daily pre designated.
On the body everyday corporate 12 week period.
This is the same causes I as our other ongoing study on the same five endpoints are being assessed.
Given that this is an open label study, we will have ongoing access to the data as it is being generated and we anticipate providing several updates during the course of this study, including potentially release of interim data.
We believe.
That's the data package for both of these studies may be sufficient for a number of our distribution partners to either seek formal regulatory approval or inclusion of the product in early access programs in their respective territories.
We are also working with our regulatory consultants to determine if pure X 003 made quantified for conditional marketing approval in Europe , which allows for commercialization of our medical product in advance of formal regulatory approval.
Marketing approval is granted by the EMA and circumstances, where there was no available treatment for a particular disease and we're clearly defined medical need exists.
We believe that this is certainly the case with <unk> syndrome, and we are working to better understand the application requirements and timing so that we can prepare accordingly.
Throughout the quarter. We also continued to deepen our engagement with them that this community of patients family members, bringing physicians are supporting foundations.
We believe that this level of outreach to the community at large hubs to establish an awareness of coin in our ongoing clinical programs.
These are already relationships have been critical in strengthening our understanding of the disease.
To build a network of communication channels that facilitate a writer broadly distributed update to community members all of our progress and the anticipated timing of key events such as the release of clinical data.
We believe that our engagement and integration into this network network will be a vital foundation for the successful launch of our product once approved.
Turning now to a research project at Queensland University of Technology in Australia.
Our U T. Both projects continue to make good progress and based on the feedback from the scientists at <unk>, we are hopeful that one or perhaps both programs could initiate clinical testing by the end of this year.
This is initial testing has been performed Australia, where point is able to take advantage of the very generous incentives offered by the Australian government, including a rebase of 43, 5% of all research dollars spent rendering these highly cost effective programs.
Sure.
While still a relatively early stage of development. We view these products as important components of our rare disease portfolio and we look forward to keeping everybody updated on their progress.
With that update on our operational progress, let me turn it over to Gordon to discuss our fourth quarter financial results.
Thank you Michael.
December 31, 2020 to cash and marketable securities was $12 9 million as compared to $15 2 million cash and securities as of September 30th.
As Michael outlined following our $16 8 million public offering completed last August .
In February we successfully completed a further 7 million public offering which resulted in net proceeds of $6 million after cost.
And we expect our current cash and investments to be sufficient to fund the company's operations well into the second half of 2024.
We reported research and development expenses of 600000 for the fourth quarter and $2 7 million for the year, primarily attributable to expenses related to our <unk> syndrome clinical trials and associated manufacturing costs as well as our research projects with your team.
We expect R&D cost to increase in 2023, as we advance our programs.
General administrative general and administrative.
Spencers were $1 $5 million in the fourth quarter and $6 $6 million per year.
We recorded a net loss of $2 million for the fourth quarter $9 $4 million a year.
I will now turn the call back to Michael to make some closing remarks and begin our Q&A.
Thanks, Gordon and.
In closing we are extremely pleased with coins progress over our first 12 months as a publicly traded company and we believe we have positioned ourselves for a very exciting and productive 2000 finance three we now have two clinical trials underway that are evaluating our lead product <unk>.
<unk> 003 for <unk> syndrome under an open IND.
And we look forward to presenting data this year.
We have had a strong start to 2023 and we are pleased with our progress so far and what we believe will become a pivotal year for our company.
With that operator, we are now ready 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 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'll pause momentarily to assemble our roster.
Our first question comes from James Molloy from Alliance Global Partners. Please go ahead.
Hey, good morning. Thank you for taking my questions I just wanted to touch base on this.
The phase III trial, I know that you disclosed that.
Back in December you had 70 page 30 shall screening obviously the first patient.
It's just been dosed.
Talk a little bit about expectations for <unk>.
So hitting half half the patients need to get into timing on that and what reasonable expectation might be for completing the study.
Yeah, Hi, Jay Thanks for the question.
So.
I can tell you this.
Study has continued to recruit at a pace that is matching our expectations.
I'm not going to announce them when we get halfway there or anything like that but you should expect to see clinical data. This year from this study.
The interest that we are seeing is extremely high.
We're working through patient screening in a systematic and methodical fashion to ensure that we're not recruiting patients into the study that shouldn't be in this study.
And yeah.
We are very happy with how things are going today, so keep an eye out for updates.
I anticipate gene data this year.
Yeah.
Maybe a quick follow up on a bigger picture.
And obviously, there's talk on the <unk>.
Program pretty if you got your programs to the Sunset in 2026, I think is your expectation what you guys would should be well ahead of that at the current pace actually at the current expansion phases for finally, but what's the where do you guys have any insight on what's going on with the peer view, what's the expectations might be in the rare disease space for that to.
It will be reviewed renewed.
Yeah. So first of all Youre correct, we will be well ahead of that.
Anticipated such as with our product.
But I also believe and this is true in depth conversations with.
People, who are far closer to the situations and I on that.
It will be renewed. This this is a really valuable program that where everybody benefits. So the small company that focuses on our rare disease gets a freely tradable priority review voucher on approval. So that's a big incentive for the company to to go ahead and.
This year in clinical testing and the disease space that might otherwise be neglected for the.
Pharma company that buys the priority review voucher.
All of them to get to market faster with their next blockbuster product and then the patients themselves benefit by.
Having somebody focused on the disease that might otherwise have been neglected. So it's a win win all around and the general consensus is this is not a program that low.
That will stop in 2026.
Great. Thanks for taking the questions I'll get back in the queue.
Thanks, Jim.
Again, if you have a question. Please press Star then one.
Our next question comes from Aden Hussein off from Ladenburg. Please go ahead.
Hi, good morning, everyone. Thank.
Thank you for walking us through the quarter here.
I have a question regarding to the pace of both studies to randomize and I'll call label.
So if the physician Sn.
Essentially managing both trials and at the same sites, so what which trial do you think will be called faster.
So I.
I think myself that the open label trial will recruit faster.
And then the then you are one there is that patients and four one.
And plus.
The level of screening that we're doing to get into the rainforest study patients have to wash out of adding systemic therapy that they're on so that takes some time.
Whereas for the open label study.
Can remain indeed, they must remain on the systemic therapy throughout the course of the study.
I believe that will recruit faster for those reasons and as we said this is an open label study. So we have access to the data on an ongoing basis.
We'll be in a position to potentially release interim data along the way.
Yeah.
Uh huh.
Okay makes sense.
And in your view, Michael So what is the percentage of severe patients and as patients who are not treated with off label biologic. So I'm trying to understand that patient segments.
Okay.
I think I missed part of that because you asked you.
You're saying the percentage that are again.
Yeah, I'm, sorry, I'm trying to ask.
Open label is essentially.
Or for patients who are being treated with off label biologics and I'm trying to understand what percentage of overall stevia and as patients method in patients are these what is the portion of this of these patients who are treated with off label and what is the portion or not being treated with off label biologics.
Yeah. So it's a really good question. So first of all I think if we look at the Big picture Aden.
There is no approved treatment for this disease, so patients and physicians are really willing to try anything off label. So theres a lot of different treatments being pursued.
Pursued with varying degrees of success, what we're seeing with regards to biologics is that.
Probably somewhere in the region of 15% to 20% at this point bear in mind. These biologics are not reimbursed for this indication and annual cost is around $60000 out of pocket to the patient so that that's a heavy lift.
Heavy financial burden for anyone I'm plus.
Not everybody sees the benefit so.
I think 50% to 90% is a reasonable working estimate.
It could vary a little bit around that.
Understood understood.
Got a couple of.
Financial Mbd question. So you mentioned that you are.
Exploring multiple attractive M&A opportunities you've got a you mentioned that you have strong balance sheet. So what kind of deals are you looking for they're looking for.
Dermatology assets preclinical clinical 500 might be to us as I'm trying to get a sense of that and how do you think that does this compare to your flagship.
<unk> syndrome.
Program, just trying to understand how you're going to manage both if you are to acquire new assets.
Yeah. So great question. So first of all our interest is solely focused in the rare and orphan disease space. We are however.
Looking beyond rare skin diseases, because we believe that in this space you can successfully migrate across different indications without putting really undue burden on both your R&D activities and then ultimately your commercial infrastructure. So we're.
Not looking for anything that's preclinical or early stage clinical we have those types of assets in our portfolio of ourselves. So we want.
Assets that have been Derisked, where there is strong clinical data and a clear path to regulatory approval and we want assets that we can have global rights to because as we said.
Between our own planned commercial infrastructure and the partnerships that we have put in place we can effectively achieve global launches of any product. So.
There's a lot of opportunities out there and we see a lot of companies with what I would call misaligned portfolios, where they have an orphan disease.
In the Mam bunch of generic products or something like that so we're very actively looking for product.
I can't tell you the timing or even if we get a deal done but is this something that is very very high priority for us and we will certainly keep everybody posted on our progress.
Got it understood.
And the last one I have regarding your expenses in 2022, so looking at the R&D, It's $2 7 million SG&A six months six essentially SG&A expenses are significantly higher more than twice higher than R&D expenses, which is sort of unusual or clinical stage company. So could you breakdown for us there is generic.
Expenses, just for us to better understand how this is going to ought to be shaped going forward.
Yes, so before I hand, it over to Gordon to give you that breakdown on G&A.
We really started clinical testing in the second half of the year. So.
It's not unusual where you see that that lag and then as Gordon alluded clinical spending will increase this year. So.
I'm not surprised that you see that difference between R&D spend and G&A spend given the timing of when we got the clinical is often running.
There is always a lag as well in terms of the actual spend itself. So nothing unusual there.
Gordon do you want to give them the top line breakdown.
Yeah sure I think just to just to reiterate Michael's comments I mean, I think our G&A spend is not.
For a company listed company like US, it's it's it's but relative to the R&D it looks high because our cost have been.
Lower today, and they and they definitely will pick up with these these clinical studies that we're doing now are pretty compact studies, which is which is why you see relatively low R&D costs.
On G&A, we don't have off we don't have a central office or any sort of big overhead expense as it is essentially a.
We've got four employees in the company.
So the compensation cost of employees, including noncash.
Compensation costs for for equity incentives.
And then we've got.
What you would expect from a public company in terms of legal accounting.
Those kind of those kind of costs that you incur as listed company.
And you'll see in our 10-K, how that's all broken down but those are the two main buckets of costs, it's essentially compensation costs and then.
Legal legal and accounting and consultants.
Okay understood. Thanks, so much Michael for taking my questions. Thank you.
And then anytime.
There are no more questions in the queue. This concludes our question and answer session I would like to turn the conference back over to Michael Myers for any closing remarks.
Thank you operator, and thanks, everybody for participating in the call today and.
We are always available to answer any questions offline, so feel free to reach out to us at any point in time, Thank you and have a great day.
The conference.
France has now concluded. Thank you for attending today's presentation you may now disconnect.
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Yes.
Okay.
Yeah.
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