Q3 2023 Lisata Therapeutics Inc Earnings Call
Yeah.
What does it or is that a therapeutics third quarter 2023 financial results and business update conference call.
Currently all participants are in a listen only mode. Following management's prepared remarks, we will hold a Q&A session.
The question at that time piece grasp our one one on your telephone.
Automated message, but I think that your hand injuries.
As a reminder, this call is being recorded today Thursday November 2nd 2023.
Now ill turn the call over to John Man, Dino Vice President of Investor Relations and corporate Communications episodic.
Go ahead Sir.
Thank you operator, and good afternoon, everyone. Welcome to Lasalle. This third quarter of 2023 conference call to discuss our financial results and the opportunity to provide a business update.
Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer, Dr. Christopher Buck Executive Vice President of research and development and Chief Medical Officer.
And James <unk>, Vice President of Finance and Treasury.
Shortly before this call we issued a press release announcing our third quarter 2023 financial results, which is available under the investors.
And news section of the company website, along with the webcast of the web.
A webcast replay of this call. If you have not received this news release or if you'd like to be added to the company's email distribution list. Please email me at Jay Mendieta Atlas side of Dot com.
Before we begin I remind you that comments made by management. During this conference call will contain forward looking statements.
Risks and uncertainties regarding the operations and future results of the site.
I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation its forms 10-K.
<unk> 10-Q, 8-K, and 10-K, which identifies specific risk factors that may cause actual results or events to differ materially from those described in the forward looking statements.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast Thursday November 2nd 2023.
<unk> Therapeutics undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call.
With that I will turn now turn the call over to Dr. David Mazzo Dave.
Thank you John and good afternoon, everyone. Thank you for joining us today as we provide an overview of recent business highlights discuss our third quarter 2023 financial results give an update on the progress of our various development programs.
The third quarter was another productive quarter for us as we added to the momentum of the first half of 2023 with the initiation and advancement of new clinical development programs targeting a variety of advanced solid tumors using listed one our lead product candidate in combination with multiple anti cancer agents of different modalities.
As we have previously reported we have preclinical data and early clinical data in humans that we believe demonstrates the potential of risk. The one to become an integral part of a revised standard of care treatment regimen for many difficult to treat cancers.
During this call our Chief Medical Officer, Dr. Christopher Buck will provide an update on our clinical programs. Following the review of our financial results and with that I now will turn the call over to James NIPSCO, Our Vice President of Finance and Treasury James.
Thanks, Dave Good afternoon, all I am pleased to join you today to present, a summary of our third quarter 2023 financial results.
Starting with operating expenses.
For the three months ended September 32023, operating expenses totaled $6 million compared to $37 7 million for the three months ended September 32022.
Representing a decrease of 84, 2%.
Excluding the in process research and development expense of $34 million related to our merger with <unk> Therapeutics in September 2022.
Operating expenses decreased by $1 4 million or 18, 6% compared to the three months ended September 32022.
Operating expenses comprised of the following.
Research and development expenses were approximately $3 4 million for the three months ended September 32023, compared to $3 3 million for the three months ended September 32022.
Representing an increase of one 3%.
Expenses this quarter were primarily due to study activities associated with the bolster trial here in the United States.
Enrollment activities for the ascent study in Australia.
Startup activities for the Glioblastoma multi form study in Europe, and general chemistry manufacturing and control activities for.
For a list of one to support all development activities.
General and administrative expenses were approximately $2 6 million for the three months ended September 32023, compared to 4.0 million for the three months ended September 32022.
Representing a decrease of one 4 million or 35, 3%.
This was primarily due to nonrecurring merger related costs in the prior year.
A decrease in equity expense due to prior year performance stock unit vesting.
Merger option assumption expense and deported departing board member restricted stock unit vesting.
Timing of our annual stockholder meeting versus the prior year.
Overall net losses were $5 3 million for the three months ended September 32023, compared to $37 4 million for the three months ended September 32022.
Excluding the in process research and development expense of $34 million related to our merger with <unk> Therapeutics in September 'twenty two.
Net losses for the three months ended September 32023 decreased by $1 7 million or 24, 7% compared to the three months ended September 32022.
Turning now to our balance sheet and cash flow.
As of September 32023, the company had cash cash equivalents and marketable securities of approximately $54 4 million.
The company remains confident that its projected capital will fund its current and proposed operations into early 2026, encompassing anticipated data milestones from all its ongoing and planned clinical trials.
This completes my financial overview, and I will now turn the call over to our Chief Medical Officer, Dr. Christopher Buck for the review of our clinical development pipeline.
Preston.
Thank you James and good afternoon, everyone as those who have been following US know Lasalle. This pipeline is built on a portfolio of proprietary and patented technology that is grounded in strong scientific rationale and the body of published preclinical and early clinical data.
Our platform technology is designed to address major impediments to the successful treatment of advanced solid tumors in an environment of increasing pharmacopeia economic pressures.
Generating meaningful clinical data is critically important in this field and I can assure you that our entire organization has this goal top of mind in everything we do.
With that I will now provide an overview of list of one for the treatment of advanced solid tumors in combination with other anti cancer agents.
Despite advances in cancer therapy today, many solid tumors remain difficult to treat effectively.
Cancers, such as pancreatic cancer gastric cancers, and other solid tumors are surrounded by a dense fibrotic tissue known as the stroma, which limits access of most pharmacotherapy to the tumor.
Many tumors also have a hostile tumor microenvironment or T M E, which suppresses the patient's immune system and makes it less effective in fighting cancer.
The combination of a dense stroma and a hostile tumor microenvironment prevents many chemotherapies and immunotherapies from being optimally effective in treating these cancers.
This.
Coupled with the fact that most anti cancer therapies are not efficient and targeting only cancerous tissue.
<unk> defines the major challenge of maximizing effectiveness and safety in the treatment of solid tumors.
Combat. This <unk> approach is to activate the C and rule or send our system a naturally occurring active transport system to selectively deliver anti cancer drugs.
Through the stroma and into the tumor.
Lasalle is lead product candidate list of one the recipient of multiple orphan designations, including for pancreatic cancer in both the United States and Europe.
As well as for malignant glioma in the United States.
<unk> is an investigational drug that actuate the send our active transport mechanism.
While also having the potential to modify the tumor microenvironment and make it less immunosuppressive.
Lister, one targets tumor vascular endothelial cells as well as tumor cells themselves based on its affinity for alphaville.
<unk> and beta five integrant that are selectively upgrading it.
Up regulated on these cells and comparison to healthy tissue.
Listen one of the nine amino acid cyclic internalizing our G. D peptide that once bound to these integrant is cleaved by proteases expressed in the tumor microenvironment to release, a linear peptide fragment called a send our fragment.
The sudden are fragment has high affinity for <unk>.
And then binds to an adjacent receptor called neuro Pelon one.
Also up regulated on tumor vascular endothelial cells and tumor cells.
To activate the C N rule active transport pathway and ferry anti cancer drugs more efficiently into solid tumors.
Additionally, Lister one has been shown in a range of preclinical models to modify the tumor microenvironment, making it less hostile to immune cells, reducing tumor resistance to anti cancer medications and.
And impeding <unk>, preventing the metastatic cascade.
These results come internally from Lossada.
And from collaborators and research groups around the world.
And have been the subject of over 300 related scientific publications.
Along with our collaborators.
We also have amassed significant non clinical data demonstrating enhanced delivery of a range of them emerging anti cancer therapies.
Including Immunotherapies and RNA based therapeutics.
To date <unk> has demonstrated favorable safety tolerability and activity.
To enhance delivery of standard of care chemotherapy for patients with metastatic pancreatic cancer.
Our development programs are designed to exploit the potential of list of one to enhance the variety of anti cancer treatment modalities in a range of solid tumors.
Currently list of one is the subject of about a dozen planned or active clinical trials globally for the treatment of various solid tumors.
Let me touch on a few of these individually.
The ascend trial is 155 patient double blind randomized placebo controlled clinical trial evaluating Lister one in combination with Gemcitabine and Nab paclitaxel in patients with metastatic pancreatic ductal adenocarcinoma also known as M. P deck.
The trial is being conducted at up to 40 sites in Australia, and New Zealand led by the Australian gastrointestinal clinical trials group or Agi ITG in collaboration with the NIH MRC clinical trial center at the University of Sydney Sydney.
As previously reported in September.
A positive outcome from the planned interim futility analysis was announced by the study's independent data safety monitoring committee, which recommended continuation of the study without modification.
In addition, we are excited to report that full enrollment in cohort a of ascend has been achieved.
And then overall enrollment in the study is now approximately 95% complete.
With that we now project to have top line data from cohort a as early as the fourth quarter next year, a full year earlier than originally anticipated.
We plan to use the results of the ascend trial to explore possible conditional approvals in several jurisdictions.
And to design, an optimized phase III program in M P deck.
The bolster trial is a phase II double blind placebo controlled multicenter randomized basket trial with investigational sites planned in the United States, Europe, Canada and Asia.
Evaluating Lister one in combination with standards of care and advanced solid tumors, including head and neck.
<unk> and Cholangiocarcinoma.
This trial will include both cytotoxic and immunotherapy standards of care.
As previously announced patients have now been treated in the head and neck squamous cell carcinoma, and Cholangiocarcinoma cohorts and we expect a first patient in the esophageal cancer cohort by early next year.
Turning to Fox the Phase <unk> open label trial in the United States evaluating Lister one in combination with Neo adjuvant full <unk> based therapies in pancreatic colon and Appendiceal cancers continues to make steady progress with approximately 80%.
The overall target number of subjects in the study enrolled.
We expect enrollment completion of the pancreatic cohort during the fourth quarter of this year and completion of the remaining two cohorts over the next two quarters with data readout in pancreatic cancer in late 2024.
This trial will provide us with pre and post treatment biopsy immuno profiling data as well as long term outcome data.
Lister one is also being evaluated in combination with Gemcitabine and Nab Paclitaxel in a phase one b two way open label trial in China led by our licensee in that territory Qi Lu pharmaceutical.
During the 2023 <unk> annual meeting.
<unk> pharmaceutical presented an abstract sharing preliminary data from the study, which corroborated previously reported findings from the phase <unk> trial of Lister, one plus gemcitabine and Nab Paclitaxel conducted in Australia in patients with metastatic pancreatic ductal adenocarcinoma.
Final data are expected by the end of the second quarter of 2024.
In collaboration with our funding partner Warp nine the I list. The trial is a phase one b to a randomized single blind single Center safety and Pharmacodynamic study in Australia.
Evaluating Lister one in combination with the checkpoint inhibitor drove allomap plus standard of care chemotherapy, non paclitaxel and gemcitabine versus standard of care alone in patients with locally advanced non resectable pancreatic ductal adenocarcinoma.
Enrollment completion is expected during 2024.
I go Lister.
Our phase <unk> proof of concept.
And early efficacy study evaluating Lister one in combination with new new Valla, Mab and fulfill arnox as a first line treatment in locally advanced non Resectable gastroesophageal adenocarcinoma is still pending initiation as a function of availability of funding by our partner <unk> nine.
We hope to have further update on timing related to the execution of this study in coming quarters.
We are also poised to initiate the study of list of one in combination with T. Mazola mined in Glioblastoma multi form or G. B M.
This study is designed as a phase two a double blind placebo controlled randomized proof of concept study.
You waiting list of one when added to standard of care team is Ola mined versus team is open mind and matching list of one placebo in subjects with newly diagnosed Glioblastoma multiform.
It will be conducted across multiple sites in Estonia, and Latvia and is targeted to enroll 30 patients with a randomization of two to one.
The one plus standard of care versus placebo plus standard of care.
We are pleased to report that the EU clinical trial application has been approved and we expect the first patient treated before the end of this calendar year.
Importantly, as recently announced list. The one has been granted orphan designation by the U S food and drug administration for malignant glioma.
This action by the FDA not only highlights the unmet medical need but also recognizes the potential of list of <unk> to benefit patients in this indication.
Lastly, we also plan to initiate a study of list of one in combination with hyper intra.
Intraperitoneal chemotherapy more commonly referred to as high Tech intra.
Intra operative intra peritoneal lavage in peritoneal carcinomatosis.
At cancer that develops as a result of contiguous spread of primary cancers, such as ovarian colorectal and appendiceal along the peritoneum.
This study will be a phase one single center unblinded randomized controlled trial to determine the safety and Tolerability of list of one administered intraperitoneal Lee in patients with peritoneal metastases from colorectal Appendiceal were ovarian cancer undergoing saito reductive surgery and high Tech.
21, total participants will be randomized two to one to receive list of one with high Tech versus high Tech alone after site a reductive surgery.
We anticipate the first patient will be treated in the fourth quarter of 2023.
For those who are interested a more complete description of each of our trials is available in the appendix section of the corporate presentation on our website.
Additionally, in the body of the presentation. There are two milestone slides that depict the anticipated timing of key execution milestones and data readouts from our trials.
With that I will now turn the call back to Dave.
Thank you Kristen and the last three and nine months of 2023, we have made notable progress on several fronts, including the broad application of <unk> in combination with a variety of anti cancer agents for the treatment of a variety of solid tumor types.
To maximize impact and confidence in the results. We have designed our studies to be scientifically and medically rigorous and to provide results expeditiously. While also assuring that we are operating in a maximum capital efficient manner.
Now with more than two years of capital available on our balance sheet. We believe we are well positioned to focus on the execution of our development plans and to achieve our goal of getting meaningful clinical data readouts as soon as possible.
Operator, we're ready to take questions.
Presenters.
And as a reminder to ask a question. Please press star one on your telephone we will then get automated network should I assume that your head is right.
<unk> will be permitted to ask one question at a time and will return to the queue for any additional questions.
Our question comes from the line of Steve Wallach <unk> Securities. Your line is now open.
Sure.
For taking the question.
I actually have one, but a follow up as well because they're related.
You've gone over a lot of Ah trial descriptions.
How how would you describe as the meaning the import of what these designations that you've been describing our two the trialing system and I've got a follow up after that please.
Thanks, Steve I appreciate the question.
No.
I think actually it's a very good question because in the industry. We talks around the nomenclature of orphan drug designation and fast track designation pretty freely.
I think most people might have at least a partial understanding but I think it's worthwhile explaining so let's start with fast track designation fast track designation.
Allows the applicant that would be for a given product in a given indication to be eligible for accelerated approval consideration and for a more rapid review cycle with the FDA both of which are extremely beneficial in terms of getting to market faster. It also allow.
<unk> four more interaction with FDA on that in the specialized way and similarly orphan drug designation first of all it points to the fact that the indication will have less than 200000 patients in a given year diagnosed with that particular indication.
And as a result, it's also eligible for more rapid review cycles more rapid.
<unk> interaction with the agency importantly, you are also eligible to receive grants from the orphan drug <unk>.
Division of FDA to develop your products, because often they're not as commercially lucrative and finally, you get an extended period of exclusivity in the market. So that is the New addition to patent protection you have some market exclusivity, so they're actually quite valuable designations theyre not given out freely.
It's not something that you're just making application and you're guaranteed results, but there is a pretty critical review process and we were very pleased that the FDA and the EU have granted.
<unk> drug designation for MP DAC to Lister, one and also for GBM.
First one here in the United States.
Okay and that actually.
Highlights.
A follow up and I'll hop back in the queue. Thank you.
You've got these yes it.
Designations, which are obviously significant you've got multiple programs running with quantifiable endpoints.
You've been pretty much delivering on everything you said you were looking to do yet obviously.
Market.
It isn't really viewing or understands its what are your what are your thoughts around.
On on your market cap and specifically your stock price given your execution, what do you think it is thanks.
Thanks, and I'll hop back in the queue.
Okay, well, thanks, Steve I actually appreciate the opportunity to address that somewhat forthrightly, because it's something that's on everybody's mind.
Our clear and consistency with the advanced stage of our clinical programs. The positive data we've generated to our financial position and the fact that we continue to execute according to plan and the plan this rather comprehensive and a rather low market cap in fact anyone can look and see what trading roughly.
Somewhere between 35%, 40% of our cash on hand, which is just irrational I think we have a couple of explanations for that part of it is that the entire biotech market has suffered considerably since the beginning of the year with high interest rates and everybody's stock is down but not particular case.
There are a few unique characteristics that I think are in PD.
The stock advanced within the short term, but that I think are available to be overcome in the long term. One of those is that we are fortunate to have a large body of our shareholders.
By our calculations.
Rough terms about two thirds of our shareholders. Our long only holders. These are people who have bought into the into the company either.
Private stages, where at the time of our merger where in recent financing, but did so because they believe in the potential of the programs and in order to see the programs reached their maximum value.
We are not trading the stock they're ignoring the fluctuations in stock price in the market. They are treating us much like they would treat an investment in a private company and they are sitting back and waiting for the.
Inverted commerce pivotal data to come out of these trials and so with a very little slope that it's a very small fraction of our shareholders trading actively on any given day.
Not really an opportunity for a market to be made for our stock. There is not a lot of people who are.
Buying or selling.
Those very few who do we trade on average 20 to 25000 shares a day.
Over $8 million outstanding.
It is a very volatile situation so I think.
Our opinion is that that will change.
Based on two things as we get to data, which is those who have looked at our milestone slide we'll see it's going to be occurring throughout 'twenty four and 'twenty five.
And also as we then are able to announce additional business development deals and ultimately do it another financing, which will allow larger funds to enter into the stock because the kick yourself on the market because of the low trading volume I think we will see that will change, but like most people right now.
The biotech growth, but real focuses on.
Impeccable execution to data generating.
Close to unambiguous data as possible and.
And then letting the product for themselves. So that's what we believe is the problem. There is certainly no issue with the fundamentals of our company the execution or our plan, which has been scrutinized pretty thoroughly by a lot of potential partners, who are also just sitting there waiting for us to show data.
Got it Alright, let me hop back into queue. Thank you for taking the question.
Thanks, Steve.
Thank you so much and your next question comes from the line of Ken <unk> from Brookline Capital markets. Your line is now open.
Alright.
Good afternoon, and thank you for taking the question.
First question.
And to the ascend trial and admittedly it may be too early to.
Provide any insight on this.
While has enrolled.
Very consistently and ahead of the original plan.
And.
Other than.
Unmet need and potentially a great drug which will just.
Lay out as givens for now.
What are your thoughts with regard to <unk>.
Why this has worked so well.
Is it a function of the populations.
<unk> in Australia, and New Zealand being relatively treatment naive and there's less competition for trials.
What are you seeing going on that.
Work to your benefit here.
Thanks, Kevin I appreciate that I think I think we see a couple of factors that are helping the trial enroll very very rapidly first of all.
It is a randomized and blinded trial, but in this particular trial the people who received the control arm are still receiving standard of care. So there is no downside to joining this trial, it's not as if you.
It would be put on.
True placebo.
You would not get any treatment, which would obviously be unethical in an oncology trial I think you've already touched on one of the situations there seems to be a large and growing presence in pancreatic cancer and this part of the world and there are relatively few treatment centers because the population of Australia.
Concentrated around the edges of the country. The country is enormous but as you all know.
Deteriorates referred to as the Outback, because it's a desert like.
Area, there's really very little populations people are concentrated in areas and they go to these larger centers pretty regularly it's not as if there are many many centers around the country for them to go and so the people who are at those sectors have been actively involved in the development of our trial of our drug.
The beginning was in Australia that the early phase <unk> phase Iia very compellingly positive data, we generated and so there's an enthusiasm that I think is moving forward and the fact that the.
The addition of lists one to standard of care doesn't seem to exacerbate.
The safety side effects of the standard of care is another reason why people are very eager to take on this particular trial. So as you pointed out it is growing very rapidly cohort it's been enrolled since.
The May June timeframe, and we're about 95% of the way there so the official.
<unk> will be done by second quarter of next year, but I think anybody can.
Two a quick extrapolation and recognize that it's likely to be done.
Very very much sooner than that.
Alright, Thank you and just looking at your spending guidance and.
Honestly looks pretty level over the <unk>.
Course of the runway period.
How sensitive would that be to the ebb and flow of enrollment in your trials because you have ascend wrapping up sooner than expected that's probably one of your larger trials at this point so yes.
How should we think about the correlation between those two things from here.
Well like oil trials spending is correlated to the large separate startup at the beginning you close out at the yen.
The steady state costs are per patient cost. So as you enroll you incur expense.
And then when you stop enrolling.
You stop those types of expenses so but.
But we also have to recognize that we are organize these trials almost all of our trials.
Typically to be Don first of all in Australia, where the costs generally are lower than they might be in the United States and where we get about 48%.
R&D dollars spent.
Debated back to us as cash at the end of the year and also.
We are.
Essentially co funding. This trial, if you will I mean, we are providing the maximum amount of funding, but a number of the standard of cares.
Hospitals are being funded by those hospitals, so there will be a reduction in expenditure relative to ascend once.
Full enrollment is completed but it may not be.
At the same magnitude that one might expect for a trial being completely funded by a sponsor here in the United States, but we still should see a reduction in costs associated with.
That.
Got it.
Those rebates or get would show up as a contra to the expense line as opposed to the top coming in on the top line is that right.
I'll ask our head of finance James what's the accounting on the on the rebate.
Correct, we do have four qualifying research and development activities in Australia.
We are eligible to receive refundable tax incentive between 43, five up to 48 and a half so that does.
Largely offset.
Let's say half of the expenses for the ascent study in Australia.
And is that accounted for as a reduction in expense or as revenue.
That that is accounted for as a reduction in expense.
So that that would be a reduction to the R&D expense. So it's incorporated there.
Thank you for that.
Okay. Thanks, Kevin.
How much. Your next question comes from the line of Andrew Lim.
Of Mezz partners.
Your line is now open.
Yes.
My first question is a follow up on earlier, one about the valuation of the stock.
It is.
So its list of one seems to enhance the efficacy of a wide variety of oncology drugs.
The variety of different modalities as well.
The question is have you guys experienced any increase in inbound inquiries from bigger farmers that are interested in collaborating with you.
Hi, Pete Thanks for the question, it's actually gives me a chance to talk a bit about about the other business development activities. The simple answer to your question is yes.
And I mentioned earlier, the consummation of a lot of those potential deals is going to be based very very much so on the delivery.
The data that will come out over the course of these years I think the what.
All of these companies have products that.
Do well by a variety of different definitions, but could clearly do better and.
And does the implications so far.
With the data that's been generated to date that was the one Ken.
Allow them all to do better.
And that should lead us to a number of possibilities for either exclusive or nonexclusive deals both on the R&D and the commercial side with a lot of players in the oncology world or just simply the ability to market list, one more broadly and have it utilized more.
Broadly in the market when that time comes but yes, we have had.
Quite a lot of interest shown and I think an expectation that that interest will continue to increase as data is generated.
And if I can qualify that a little bit in terms of.
Drilling down do you see them.
Different levels of interest depending on.
The types of cancer or also.
Since there are varying side effects and a lot of these treatments.
Does it vary somewhat by the type of.
Modality, like chemo, RNA immunotherapy or whatever or is it pretty much across the board.
I would say it's reasonably distributed the interest is reasonably distributed among people who are either developing new cytotoxic already marketing chemotherapeutic.
Immuno therapeutics, we've even had discussions with radiopharmaceutical companies companies that have <unk> products, even companies with cellular therapies.
Nope article so I think theres, a broad level of interest because the mechanism of action of what's the one <unk>.
Theory should help all of those better target solid tumors and infiltrate those tumors. So I think that.
<unk> reduced side effects I guess is an important part of it as well because I don't know I don't know if it will reduce side effects I want to be very careful what we say that would be wonderful, but what we will say is that the evidence to date shows that Mr. Juan will not increase the side effects of those agents. So you should get better efficacy with the same level of side effects.
Normally to get better efficacy with increased concentration and that leads to greater side effects. So I think we're going to be able to but I wouldn't say that we eliminate side effects were not okay no.
Thank you and then just one quick one for Christian.
Did you mention the number.
Percentage of enrollment so far in the bolster trial I didn't get it if you did.
No I did not to bolster trial recently opened and we're early in enrollment okay.
Thanks, a lot I'll get back in the queue.
Okay.
Thank you so much and again, if you would like to ask a question. Please thus far one one on your telephone.
And there are no further questions. This concludes the question and answer session I will now turn the call back to Dr. Mazzo for closing remarks.
Well again, thank you all for participating in today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements and progress.
We remain grateful for your continued interest and support stay well and have a good evening.
Okay.
[music].
Okay.
Okay.
[music].
Yes.
Yes.
[music].