DiaMedica Therapeutics Inc. Q1 2023 Earnings Call
Good morning, ladies and gentlemen, and welcome to the Diomedica Therapeutics first quarter 2023 conference call. An audio recording of the webcast will be available shortly after the call today on Diomedica's website at www.diomedicine.org.
www.diametica.com in the investor relations section. Before the company proceeds with its remarks, please note that the company will be making forward-looking statements on today's call.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results, appears in the section entitled Cautionary Note Regarding Forward Lookout.
that is the best way to get a job. So, please remember to check out the website of the website. It is www.SEC.gov and on its website. Please also note that any comments made on today's call speak only as of today May 16th, 2023 and may no longer be accurate at the time of any replay.
Rick Pauls, Diomedica's President and Chief Executive Officer. Mr. Pauls, you may begin, sir.
Thank you, operator. Hello, everyone, and welcome to our Q1 2023 conference call. I am joined this morning with Dr. Kirsten Gruss, our Chief Medical Officer, and Scott Callan, our Chief Financial Officer. I am happy to report this morning that our complete response is requesting the lifting of our clinical hold is being finalized as we speak.
and we plan to submit to the FDA this week. Much hard work has been performed to get us here. The FDA requested a new study was completed in April . This was performed at an independent laboratory and consisted of two parts. Part one simulated actual use in the hospital of drug being administered.
and Part 2 evaluated worst-case scenarios such as varying storage durations, temperature, and light exposure. We believe that the data from Part 1 confirmed our conclusions that the effects of the change in the IV bag material was the cause of the hypotensive events leading to our halting of enrollment in the study.
Results from part two of the in-use study were substantially consistent with part one, which means that there will likely be no new special handling instructions required for the IV administration of DM-109. I would also point out that part one results were consistent with the results of the IV bag testing we completed in the fall of last year.
where we proposed revising the IV dose to 0.5 micrograms per kg to match our phase 2 stroke trial IV dosing levels. We hope that this consistency will contribute to a favorable decision by the FDA. And just to remind everyone, there are no proposed changes to the ensuing three-week subcutaneous dosing under the study protocol.
I'm also very pleased to report that we have recently completed a Phase 1c in Healthy Volunteers trial. Even though the FDA did not request or suggest human testing, we planned and initiated a Phase 1c open-label single sending dose study of DM-19 administered using the PVC IV bags.
planned to be used in the Remedy 2 trial at 0.1, 0.025, and 0.5 microgram per kg. This study was conducted in Australia. The results have confirmed to us with human data that a proposed revised IV dose of DM-29 was used in the Remedy 2 trial at 0.1, 0.5 microgram per kg.
of 0.5 micrograms per kg would be generally safe, well-tolerated, and achieved a blood concentration level that reached the desired therapeutic range as seen in our prior Phase II acute ischemic stroke trial.
The results from this Phase 1c study give us further confidence that a proposed DM-29 IV dose revision to 0.5 micrograms per kg for Remedy 2 will minimize the risk for clinically significant hypotension and reach the targeted range. These results will be included as additional supporting data in our clinical hold response. We also believe that this...
and will be providing the FDA with adequate data to support our analysis of the cause of the prior hypertensive events. We believe the results of the phase 1c study further support our proposed revision to the IV dose of 0.5 micrograms per kg and demonstrate the safety and tolerability of DM-109.
All in, we are cautiously optimistic that this will allow the FDA to lift the clinical hold. With the expansion of our team this past year, I'm confident that we have the right team in place to execute the remedy to trial. Which we believe will be a pivotal trial. Once we hear back from the FDA, and if the response is positive, we will provide an update on the next steps and expect the timing for relaunching the remedy to trial.
We've also recently expanded our management team with the addition of David Womback as our chief business officer. Dave brings over 15 years of relevant life sciences, capital markets, M&A, and investor relations experience to die America. He was actually the lead banker on our 2018 initial public offering on NASDAQ.
DM-09, as you can tell with his recent purchase of $750,000 of Diamanicus Common Stock, we're grateful to have him part of our team. I would like to now turn the call to Scott Kellan to review the financial highlights. Thanks Rick and good morning everyone. As Rick mentioned, we announced our first quarter, 2023 financial results and filed our quarterly report on Form 10Q.
yesterday afternoon. These documents are both available on either the Diamantica or the SEC websites. Starting with our balance sheet, as of March 31, 2023, our combined cash and investments totaled $28.7 million, down from $33.5 million as of the end of 2020.
2022
Our first quarter 2023 cash usage was $5.1 million compared to $3.9 million in the prior year period. The increase in our cash usage was due primarily to the in use and the phase one C studies. We believe that our current cash will support the clinical development of DM199 and our operations.
into the fourth quarter of next year.
Our research and development expenses increased to $3.6 million for the three months ended March 31, 2023, up 1.6 million from $2 million for the first three months of ended March 31, 2022. The increased costs were driven by a number of factors, including increased manufacturing,
due to the clinical hold. Our general and administrative expenses were 1.9 million dollars for the three months ended March 31, 2023, up from 1.6 million dollars for the same period in the prior year.
The increase was primarily due to recruiting costs, incurred in conjunction with the expansion of the company's team, and increased legal fees incurred in connection with the company's lawsuit against PRA Netherlands. Speaking of which, let me provide a quick update on our ongoing lawsuit against PRA Netherlands, which, as of July 1, 2021,
was acquired by ICON PLC. Last month, the NETA-LIM commercial court issued its ruling on the matter of our ownership of the study data and records from the trial that PRA slash ICON ran for us in 2013 and 2014. In that ruling, the court declared
The Diematica was the rightful owner of the study records, both paper and electronic, as stipulated in the original study agreement.
The court ordered BRA slash icon to quote, allow and tolerate and quote, the Diamedica exercise its right as owner of documents and to cooperate with the surrender of both the physical documents and the digital data.
The court further ruled that PRA slash ICON had no legal basis for withholding the study documents. After all these years that ruling was quite the vindication.
We now look forward to obtaining the records and conducting a proper audit of the study and to evaluate the inconsistent messaging from PRA. We are currently taking steps to enforce the court's ruling and to get access to the study documents. PRA, however, does have a right to appeal this decision.
This right lasts until mid-July of this year. At that time, we'll be able to provide some clarity on the timing for the next steps through the Netherlands legal system. So thank you, and with that, let me turn the call back over to Rick. Thanks, Scott. That would like to open the call for questions.
Operator, if you could please introduce the first analyst. If you would like to ask a question, please press star one on your telephone Keep Add Now. You'll be placed into the queue in the order received.
Please be prepared to ask your question when prompted. Once again, if you have a question, please press star one on your phone now.
And our first question comes from Thomas Fleton of Lake Street Capital.
Your line is open.
Thanks. Good morning, guys, and I appreciate you taking the questions. Rick, I was curious, and maybe I misunderstood from the last call that the Part 1C was kind of a back pocket data set that you could use in the event that FDA had ongoing questions, but it's now going to be submitted as part of your...
your formal response to the Indian Youth Study. I was just curious if you could comment on that. Was it more just that the timing worked out or was there a change in the strategy there? No, really good question. So it really was a question of timing. And so we were preparing to submit our complete response.
in April , then of April , with combining both the part one and part two of the in use. And then we realized that the phase one scene healthy volunteers was moving along very quickly. And so recognizing that in just a couple more weeks, we could actually do a complete response that would actually include human data.
and encouragingly, you know, that human data now supports the in-use data and also supports the IV bag study we did last fall. So we think overall the combination of the in-use study, the phase 1C data, we believe provides a very compelling basis for the FDA to allow us to resume the trial. And thanks for that. And just looking back,
on a post-mortem basis to understand, you know, should you have been at one microgram in the first place? I'm just maybe some post-mortem thoughts on that.
Yes, if you go back, so we initially did a phase one trial in healthy subjects that looked to match the PK profile, the IV dose.
of our drug compared to the human urinary form that's being used today in China.
And at the time we'd use the polyol friend bag and we're using that bag, we came up with a one microgram per kg dose levels.
Fast forward, that was the same bag that we used for phase two, that we had the phase two results. Then when we progressed and moved to our phase two, slash three that initiated last year, we pivoted to a PVC bag. That's where we had the three serious adverse events of large drops in blood pressure.
Last summer we went back and looked at what changed from the phase two to the phase two slash three and That's where we recognized that the only thing that we could we could determine was changing the bags did additional work both last summer and then further with the in use and What we what we now realize that the Paul do for a bag that
effectively have to drug with sticking. And so effectively, that one microgram per kg using the PVC bag was giving patients twice the dose.
So that we thought that they were getting. So with this new in-use study in the Phase 1C, we were able to basically match up to a similar PK profile using the PVC bag.
As we get to the pre-dischatic, I think, I'm going to go ahead. Thanks Rick. Okay. And our next question comes from Alex Noek, from Craig Howell.
Your line is open. All right, Greg. Greg, good morning, everyone. So to continue off Tom's questions there, I think the work that you've done here is really interesting. You know, to go back and just confirm the dose levels, will you plan on publishing that work just showing all the steps you took from...
You know, Ruco's identification, how you ended up solving it, the studies that you done, either published a set of conference or published an abstract somewhere, just so I think we can add some more hard support, hard evidence around the kind of changes in the studies design. Yes, it's something that we're talking about. I mean, I guess we're not going to commit to it, but it would be something that's important.
And in particular for the principal investigators at these sites. So if we can give greater clarity, we'll be looking at how to get that data out. So that is very clearly we have identified what happened and why we believe that we'll be able to avoid these events for the most part going forward.
Okay, now that's good. Anything from the in-use study of the Phase I-C data that's going to make the FDA go, okay, great, thanks for providing this, but have you considered XYZ? What can we be still surprised by the FDA's response here? You know, we've done what we think has been a very extensive review. We've used a number of different, you know, outside consultants as well.
I think this is ideally this will give them more comfort in terms of we're doing everything we can and our patient safety. Other aspect too that we've also done some revisions to the protocol and so in particular we'll be starting the infusion for the first 15 minutes. Stay tuned and activate this
And if there are any signs of drops in blood pressure that are significant, then the sites can dose these patients over a few hours. I think that'll be important. And then we also are doing a 24 hour washout effortation to us previously on an ACE inhibitor. So these three patients were all on ACE inhibitors that had this serious adverse event.
And so we know there is an interaction with ACE inhibitors in terms of the mechanism of action. So we think these additional precautionary steps that, you know, Kirsten and the clinical team have added, I think, will provide more comfort as well in terms of prevention. You know, and until we get the feedback from the FDA, we don't know. But
We believe we've answered everything. There's some additional questions that the FDA had also asked regards to Tripsin and our assay and they've already responded that they thought that the work we've done has been acceptable. So we'll find this file this week and then the FDA will have up to 30 days to get a service response.
Okay, nope, that's great. And then maybe just two quick questions. One was I think you mentioned in the prepared remarks, there was new principal investigators that the study can use the elaborate on that. And then just a reminder on the PRA lawsuit, what study was PRA conducting going back, you know, almost the, you know, pin years now? You know, what data?
Is there that you that you'd like to get or you're going to get and what could be helpful in that day for the ongoing development of DM 199?
Yeah, so the first part is my prepared marks and reference to, you know, we had, you know, 15 sites that we had under contract and on clinical trials.gov. And then we have numerous others that, you know, we've had different layers of interaction that as soon as we get the hold, feedback from the FDA and coming off.
will be forced to even on getting as many of these sites up as quickly as we can.
And then, Melissa, got to take the Peer A question. Hi, Alex. Yeah, good question on Peer A. It's been a while. They were doing the original first in Man Works. So the original dose tolerance studies, a number of single and multiple ascending dose studies that culminated in a small proof of concept study for type two di-
and they refuse to allow us access to perform a proper audit of the study to truly understand what actually happened. So we're waiting to see the data to understand whether or not we have a signal for efficacy in the type 2 diabetic indication or not.
And, you know, principally, any positive data was beneficial for the overall development, but we'll wait until we see what those results are before we form an opinion on whether or not we should be looking harder back at type 2 diabetes.
Yep, absolutely. We'll be great to see that, Dana. All right. Appreciate the update. Thank you.
Absolutely, we'll be great to see that data. All right, appreciate the update. Thank you. Thanks, Alex.
As a reminder, if you do have a question, please press star one on your touchtone keypad now.
And we have a question from Francois Bisbeau from Oppenheimer.
So a question from Francois Vizro from Oppenheimer. Your line is open. Open.
I didn't get it.
Sorry about that. I've been on for Frank. Thanks for taking my question. Regarding the P1C, you mentioned the 0.5 microgram per kilogram achieved the exposure levels similar to remedy one. Of course, these are healthy volunteers, but were there any...
PD parameters that were part of the data collected. Are you, if you're able to share at this time, if there was any dose response in the PKPD parameters in across the three doses, any additional granularity, you can share at this time on the P1C. Thanks.
Chair Kirsten, do you mind taking that one?
I think we've been having some troubles here with... Lost here, Simon. Lost here. Dan, no, I mean, this was, these patients were healthy subjects. And, you know, I'll point out that, you know, the study design was quite similar to our phase one trial we did.
in healthy subjects before launching our phase two study for stroke.
Okay, thanks. Let's take my questions.
Thanks, Dan. Thank you.
And seeing no further questions in queue at this time, I'll turn the call back over to our host.
All right, again, we'd like to thank everyone for joining us this morning and for your continued support. Our goal is to bring this important treatment to stroke patients as quickly as possible. We appreciate your interest in Diamanica and your continued support. This concludes our call.