Q1 2023 Quoin Pharmaceuticals Ltd Earnings Call

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Good morning.

And welcome to the Cohen Pharmaceuticals, first quarter financial results and business update conference call.

All participants will be in a listen only mode for the duration of the call entered you need any assistance at that time. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on your telephone keypad.

To withdraw your question. Please press Star then two.

Please also note that this event is being recorded today.

I would now like to turn the conference over to Gordon Dunn Chief Financial Officer. Please go ahead Sir.

Yes.

Thank you and good morning.

Appreciate you joining us on today's conference call with me on the call are Dr. Michael Meyers, CEO and Denise Carter C O two.

Please provide an update of our progress in the first quarter of 2023 as well as discussing our Q1 2023 financial results. Please note that our operational and financial results press release is now available on <unk> website.

In keeping with our normal procedure began Michael will provide a corporate clinical and operational update following which I will review our Q1 financial results and will then hand, the call back to Michael for closing comments, we'll 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 $19 95, 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.

Certainties.

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.

Actual results 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.

I'm very pleased to report that coin has had a very strong start to 2023, both of our <unk> syndrome clinical trials, which are being conducted under an open IND are fully up and running actively recruiting and dosing patients we look forward to providing chemicals.

Data later this year.

Our commercial partners in 60 countries outside of the U S and Europe continue to make progress in their respective territories as they engage with regulatory authorities key opinion leaders and advocacy foundations to deepen their understanding of their requirements both for entry into.

Early access programs as well as for full regulatory approval.

Our partners are also working with insurance providers and reimbursement experts to ensure that once our product is approved.

Mood and efficient commercial rollout will occur with established pricing and reimbursement criteria.

As you know there are currently no approved treatments for <unk> syndrome anywhere in the world. So these interactions by our commercial partners with various regulatory agencies and insurance providers artifact of a kind, which is why the work is being performed in advance of approval.

Our earlier stage programs with Queensland University of Technology <unk> in Australia continued to advance during the quarter.

While these programs are at an earlier stage of development than cure at 003 furnaces in syndrome. We continue to believe that they are important components of our development portfolio and have the potential to generate significant downstream shareholder value.

During the quarter also we successfully completed a capital raise of $7 million prior to fees and expenses.

It is worth noting that the terms of this raise were more favorable than those uptake by a majority of companies in our peer group that also completed a capital raise this past quarter.

As we have previously discussed.

Primary reason for conducting this raise was to strengthen our balance sheet and provide the company with additional firepower as we actively pursue M&A opportunities to broaden our product portfolio beyond where skin diseases.

We are particularly interested in late stage assets in the rare and orphan disease space that are underpinned by strong clinical data and highly favorable commercial opportunities based on readily identifiable competitive strengths.

We are actively considering a range of therapeutic areas beyond our current rare skin focus with the primary evaluation criteria being the path to commercialization and the scale of the commercial opportunity thereafter.

This current market environment.

It's proven to be highly challenging for many companies and as a result, we have had an opportunity to assess quite a large number of potential M&A opportunities throughout the past quarter and that momentum has been maintained into this quarter. Our team has deep experian.

And M&A and we employ a systematic and thorough approach to due diligence across a number of important metrics.

There can be no guarantee that a transaction will be consummated I can tell you that we are in advanced discussions with a number of companies regarding several very exciting opportunities, including some that could potentially be fundamentally transformational for coin.

We look forward to updating everyone if and when we have an announcement to make but I do want to reiterate that broadening our product portfolio through M&A is a key priority for coin this year.

On a different note. We are frequently asked questions about the competitive landscape for <unk> 003 in <unk> syndrome.

We are aware that another company has filed an IND with the FDA and received the study May proceed notification to initiate the clinical development of their product as a potential treatment for <unk> syndrome.

I do want to take a moment now and highlight a number of key differences between their clinical program and ours.

Principally their study is at a much earlier stage than ours as it has been labeled by the company itself as a phase <unk> study.

Please recall that we are currently testing our product and what is potentially the first part of a registrational study.

In addition, their study differs from ours in terms of dosing duration two weeks for them versus 12 weeks for us and according to publicly available information their clinical endpoints.

<unk> appear to be somewhat different than the true efficacy endpoints being assessed in both of our ongoing clinical studies.

Finally, again based on publicly available information, we believe our well defined cost effective and reproducible manufacturing process may configure significant advantages over that of the company.

As of now it does not appear that the company has initiated their clinical study and to the best of our knowledge coin remains the only company conducting clinical trials in <unk> syndrome under an open 91.

Whilst acknowledging the presence of a potential competitor in this space. We believe the advanced stage of our clinical program, coupled with a well established cost effective manufacturing process provides us with substantial first mover advantage and we believe we are on track to obtain the very.

For us regularly regulatory approval for our product to treat an asset in central.

As outlined previously the combination of our planned commercial infrastructure in the U S and Europe .

Coupled with the commercial partnership network, we have established in 60 countries outside of those territories will enable calling to affect what is essentially.

Our global launch of <unk> 003, once approved we know of no other company in our peer group that could make a similar trade.

With that update on our operational progress, let me turn it over to Gordon to discuss our first quarter financial results.

Thank you Michael.

As Michael highlighted earlier in February we completed a $7 million public offering, which further strengthened our cash position and runway as of March 31, we had approximately $17 million in cash and marketable securities compared to $12 9 million as of December 31, and we expect that will be sufficient to fund our operations.

Operations into late 2024.

Our operating loss for the first quarter was $2 8 million compared to $2 2 million for the first quarter of 2022.

Increase in operating loss was primarily due to increased R&D costs associated with.

With our clinical studies of <unk>, three and our research collaborations with Q T is.

Well as noncash stock compensation expense.

Our net loss for the first quarter was $2 6 million compared to $1 7 million for the first quarter of 2022.

This included 490000 exceptional income items.

I will now turn the call back to Michael to make some closing remarks and begin our Q&A.

Thanks, Gordon as outlined we have had a very productive and indeed, a very exciting start to 2023 operationally we continue to advance the development of our preclinical and clinical programs as we work to lay the foundation for a strong.

Long commercial rollout of our lead asset in anticipation of approval.

We are excited by the quality and scope of the M&A opportunities. We are seeing and our team is extremely focused on pursuing a transaction R&D transactions that could be major inflection points for our company.

We will of course keep you fully apprised of our progress across all of these fronts. Once we have news to share.

With that operator, we are now ready for questions.

We will now begin the question and answer session.

Ask a question you May press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two.

At this time, we will take our first question will come from <unk> Raman with Maxim Group. Please go ahead with your question.

Hi, guys. Thanks for taking my question and on the progress so far I just want to start on the open label portion of this study could.

Could you provide some color as to how many patients have already enrolled and also do you have any color could you provide any color on what percentage are handled as patients are adult versus children in like the rough intriguing.

Hey, thanks.

For the question.

With regard to the first question about the number of patients.

Could I ask you just to stay tuned you will see an update on that very shortly so you'll get a sense.

And this study is all adult so both of our ongoing clinical studies are being we're testing an adult only the next phase.

The registration of the study will be adults.

And primarily.

Children with regard to the age range.

Yes.

Across the board.

20% to 50 give or take.

These are these are all adults.

Got it and.

Basically I guess on the interest you've seen in the study thus far.

Have you considered potentially expanding the study for more than 10 patients.

That's a really good question.

To be honest, it's something that we have discussed.

Among ourselves so no decision on that yet.

But again I would say.

Stay tuned.

There may be an update on that but it's certainly a conversation we're having.

Got it and I guess my question is on the square Domo asset could you sort of talk about what the study design might be for the I guess the initial study that you are.

Partner might conduct and also like what kind of data are you looking for or would you be looking for.

Yes, we really cant give any information on that as of yet.

They are working on the protocol.

The proper endpoints bear in mind with like <unk> syndrome, they're really there is no approved treatment for this so there is no validated endpoints really not a lot of precedent here. So what we had in particular that are looking to do is see.

What's the best endpoints will be but.

I really don't have anything to share at this stage hopefully for the next conference call I'll be able to provide you with more color on that.

Got it thanks for taking my questions.

Yes.

And as a reminder to join the queue for questions. You May Press Star then one.

Our next question will come from Jim Molloy with Alliance Global Partners. Please go ahead with your question.

Good morning. Thank you for taking my question I had a quick question on.

I think the progress advancing rather swiftly on both the open label Phase II three we are still anticipating.

Youll be able to finish first and say two three years second half 'twenty, three and then potentially getting the phase III.

Mostly children trial up and running here second half 'twenty three.

Yeah.

That's still the.

The ply gem. So thanks for the question, but you're spot on the open label will read out earlier followed by the.

The first part of the Registrational study and then obviously the second part so that that continues to be the sequence.

The sequence of events.

Excellent and then a little earlier stage.

The R gap.

Oh, seven for <unk> and <unk> for scleroderma.

Those still progressing in trials and how do you prioritize between progressing those versus essentially bringing in transformative asset.

Yes, so we don't see that as mutually exclusive or plans for 007 for scleroderma unnecessary respectively. Those have been well established <unk> in Australia.

All of the work.

As you know, it's very cost effective to do work down in Australia because of the.

Almost 50% rebates you get from the Australian government. So those programs are continuing and as I said these are earlier stage, but they they will.

Get into the clinic, and we think they have the potential to provide.

<unk> value downstream our position regarding eby remains the same thing.

This is a market that we are continuing to evaluate we're continuing to stand to one side and see how things break out for.

I don't know 678 companies that are actively pursuing clinical studies.

This year, there is going to be a lot of important data points come out.

Crystal for example, we see if they get approval there is other companies that have.

Potentially pivotal clinical data coming out so as we've said before if.

We look if we see an opportunity we will be prepared to move very quickly, but we're not going to throw dollars at this unless we're convinced that it makes sense, if your third or fourth into that market. There is no market.

So long way of answering.

Or 7% noise up and running moving along.

And we continue to put a high priority on bringing in additional assets and we feel like we have the capacity to do that.

Excellent and it sounds like.

And active.

Acquisition market, you characterize it as a buyer or sellers market, but given the depressed stock price and the number of companies are seeing out there.

I would have to say it seems like it's a buyer's market Jim.

And companies.

Companies are making sensible decisions they are realigning their portfolios, making sure that the assets that are keeping really make sense in this difficult environment and I think what we're seeing is very healthy.

And for US this is really exciting.

Very energized by what we're seeing the quality of the opportunities that the breadth of the opportunities it really is.

Very very exciting start to the year for us So we will continue to.

Do our diligence.

We're thoughtful systematic we walked away from opportunities that initially look very promising but on further due diligence we felt they weren't the right opportunities for us we're not looking for perfection by any means because we know that doesn't exist, but we want to make sure that whatever.

Decisions, we make really are the best in the long run for the company. So.

They tuned hopefully there'll be something to announce on that.

Very good and then last question from me and I'll hop back in the queue any thoughts on I know you guys were pretty clear that this is a market that you could self launch into with her.

A fairly reasonably sized sales salesforce.

Has there been any discussions with any potential partners have come forward.

Part of this rather than cell phones.

We are approached all the time.

We get.

Costs and approaches from companies, who are either looking for U S Reits European rights or both.

That's <unk>.

Parcel of our daily existence almost.

But we remain convinced that.

Given the size of the patient population the limited number of treating physicians the access to patient registries.

Best long term value. We can do for this company is to is to self commercialize in these territories leveraging our own experience.

In selling products into these markets so.

Look never say never if somebody comes and makes an offer that suites of software feet.

We'd obviously have to have a conversation, but but right now we remained committed and focused to establishing our own commercial infrastructure in Europe and as you know we have worked very effectively to establish a global distribution network outside of those territories.

Thank you for taking the questions.

Thanks, Jim.

And that concludes our question and answer session I would like to turn the conference back over to Dr. Michael Myers for any closing remarks.

Just wanted to say look thank you for participating here participating here today and we appreciate you taking the time to.

To be here.

There are any further questions outside of what was covered on the call. We are always available to.

Glad to them so feel free to reach out at any point in time does not have a great day everybody. Thank you.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.

Yeah.