Q3 2023 Quoin Pharmaceuticals Ltd Earnings Call & Business Update

And only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please.

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.

With me on the call are Dr. Michael Meyers, CEO and Denise Carter C. O. We're pleased to provide an update on our progress in the third quarter of 2023 as well as discussing our Q3 2023 financial results.

Please note that our operations and financial results press release is now available on <unk> website.

In keeping with our normal procedure, Michael will first provide an operations update following which I will review our financial results.

I'll hand, the call back to Michael for closing comments before we open the phone lines for questions.

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 factor.

As 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 release issued this morning for more information.

It is now my pleasure to turn the call over to our CEO like Mars.

Thank you Gordon and good morning, everyone. Joining this past quarter, we continued to make significant progress across multiple fronts, culminating in the release of additional positive clinical data for our pure X 003 from our ongoing open label clinical trial in messaging.

Well after the quarter ended on October 24th.

I will spend some time discussing this data as well as our newly updated David and optimize clinical trials for cure 003, which we are now pursuing as a result of this positive development.

We believe that these planned protocol amendments were resolved in an even more robust clinical dataset at <unk>.

<unk> needs to have faster and possibly wider initially initial regulatory approval sort of product.

During the quarter, we entered into our ninth commercial partnerships for pure accident 003 went to signing of an agreement with far more Mondo course, Singapore.

This new agreement increases the number of countries that we have entered into commercial partnerships, Florida product to 61. Furthermore, we are currently in late stage discussions to enter into similar partnerships for additional countries in South East Asia and Latin.

America.

This diligent and systematic approach to entering into commercial partnerships is entirely in keeping with our spoken mission to ensure that cure accident zero-zero three will be made available to as many patients and as many countries as possible once approved.

As noted previously these partnerships along with our own planned commercial infrastructure for the U S and Europe, which facilitates what will effectively amounts to a global launch of the product once approved.

Also lay the foundation for similar global launches of our pipeline of products. Once they also received regulatory approval. We firmly believe that this global commercial network is unprecedented for a company our size and represents highly differentiate.

Good I'm, perhaps somewhat underappreciated advantage for coined the potential incremental revenue generating opportunity that this global commercial partnership network represents for our company all of which will effectively falls to the bottom line could ultimately be highly cigna.

Michigan for the company.

Have a materially positive impact on our future profitability.

During our last call I also updated everyone on our M&A strategy as discussed given our strong balance sheet and potential access to additional capital we have been acutely focused on expanding our product portfolio by acquisition.

Licensing or other means.

Following an extensive and broad based process throughout this year, well, we assessed well over 20 different opportunities.

During the past quarter, we successfully narrowed that list down to three specific products for which we ultimately reached agreement on all key financial terms.

As we have stated previously while there can be no guarantee that this transaction will be consummated as there are external impacting factors in particular car market conditions, which to say the least are decidedly favorable we are actively working.

Towards closing out at least one transaction as expeditiously as possible.

While I'm not in a position to provide any specific details I can tell you that all three assets are rare disease products that would strongly complement and enhance our current product portfolio. We hope to provide additional information on these opportunities in due course.

I do want to make one key point clear. However, we do not intend to close out any such transaction unless and until we have clear visibility on our ability to raise the necessary capital necessary funds to fully support the clinical development of <unk>.

These assets.

Last thing that we will do as a company is to acquire or license to ask this but which we cannot fund the clinical development.

As we have now stated on previous calls another company has 590 with the F. D. A and received a study may proceed.

To initiate the clinical development of their product as a potential treatment for <unk> syndrome as of this morning. Following our review of the clinical trials Gov website. It appears that this study still has not been initiated I'm, calling remains the only company.

Any to be actively conducting clinical studies in NASA and syndrome under an open IND.

That's the case, you know new drug application or I M D.

Furthermore, while other companies have also spoken for some time either about filing I M. DS are initiating knessets in syndrome clinical studies under open that indeed, we continue to see a consistent pattern of those timelines pushed.

Pushed farther and farther out are indeed being hesitant completely.

As we continue to make significant progress on the clinical front ourselves. We are now nine global marketing partners are more excited than ever by the potential commercial opportunity.

Or what could be the first regulatory approved product for this horrendous disease.

As we have consistently stated coin. Unlike many of our biotech peers focuses not only on the clinical.

Aspects of product development, but also on the CMC side of development as well.

I'm pleased to announce today that our contract manufacturer or CMO for the active ingredient in Cure Act 003 has successfully developed and scaled up our new and fully GMP manufacturing process for the drug substance you may recall that the.

Active ingredient in <unk> 003, although a very well characterized molecule has never been approved as a drug for any indication and that there has been no source of GMP quality material previously available.

As a result of this successful collaboration with our CMO that is no longer to place case and the availability of fully GMP material from a scaled up manufacturing process for the active ingredient represents yet another positive step forward in the development of our proud.

Yes.

Bear in mind that this source of GMP material is exclusively contractually available to coin only.

We are also actively exploring whether new intellectual property maybe developed from this exciting development.

Turning now to our ongoing clinical studies in <unk> syndrome patients.

On October 24th we announced the release of positive clinical data from our single arm Open label study. This data was from the first six evaluable subjects. In this study as outlined in our press release on that date, the data was positive across several.

Road measured endpoints.

Recall that in this open label study subjects are currently receiving off label systemic treatment and we'll continue to do so in conjunction with cure zero three for the duration of the study.

It is worth noting that all subjects in this study have been treated with this off label systemic therapy for at least one year.

In a number of cases for multiple years.

Notwithstanding this ongoing and long term systemic therapy treatment.

All patients recruited into the study exhibited clear signs of messages syndrome.

At the point of entry into the study.

Including compromised skin and significant pruritus or itch.

As a result of this long term.

Systemic therapy subjects with crews it into this study provided in Knoxville baseline for us to assess if treatment with cure zero-zero three over a duration of 12 weeks would lead to any therapeutic improvement across a number of clinical endpoints.

As reported for five of the six subjects their pruritus or itch was either absent or negligible. According to the standardized scoring system.

After treatment with cure exterior zero, three absent or negligible pruritus is defined has zero or very low single digit score.

Zero to 10, scoring wage.

For the sixth subject their pruritus was affectively unchanged from baseline on completion of this study.

Possibly reflecting and not uncommon refractory nature.

The pruritus associated with this disease in their particular case.

We are extremely pleased with these results as pruritus can be extremely distressing and debilitating for NASA 10 patients.

It is particularly noteworthy is that despite receiving long term off label systemic therapy. All six subjects were experiencing significant pruritus at baseline and for five of those six that prices have largely disappeared following treatment with cure zero-zero streak.

In addition, all six subjects evaluated demonstrated an improvement in skin appearance. According to the investigators scoring system for three of the six patients there was a well defined improvement in skin appearance. According to this endpoint on completion of dosing.

With Cure X gene is 031 for the other three subjects there were signs of improvement in skin appearance at various points throughout the study, though not necessarily a completion of testing.

This is potentially further important evidence of the possible efficacy of cure exit 003, as a treatment for N S.

Importantly, also all six subjects express satisfaction with cure exiting zero three across a number of assessed metrics leading to a positive overall experience with the product.

As you know cure at 003 isn't easily applied and user friendly topical lotion, which makes it attractive to us for to use for patients and caregivers.

Finally, and also importantly, there were no significant adverse events reported throughout the study and the overall safety profile of cure exit 003 today is extremely favorable and highly suggestive of a potentially safe treatment for it.

This disease.

Taken together the body of clinical evidence generated stays from Bolton efficacy and the safety perspective has led to a number of exciting developments for our two ongoing clinical studies enable us to enabling us to move into an optimization phase.

Which we believe May ultimately result in an even more robust and adverse dataset and potentially to a faster approvals for the product.

These new developments have been submitted to our open I N V for cure accident Zero-zero, three and I will now provide some details of these planned protocol amendments.

One such amendment is the elimination of the lower 2% dose from our double blinded study.

This decision was based on the very clean safety profile observed to date for the higher 4% dose across both studies.

Going forward the double blind the study will now comprise of the higher 4% dose and placebo and as such would become a two arm study instead of a card three arm study that it is.

In addition, we.

With a view to maximizing the potential clinical performance of cure at 003, we are modifying the dosing frequency of the product from once daily to twice daily across both studies.

Again based on the body of clinical evidence generated to date.

Conjunction with a very clean safety profile observed so far we believe that twice daily dosing of the product has the potential to.

To deliver a more robust clinical evidence of efficacy across all measured endpoints.

Finally.

The number of subjects in the open label study will be increased from the current 10 to 20 with all new subjects being tested with cure X 003, dosed twice daily going forward.

For the blinded study the number of subjects.

To be enrolled will be increased from the original 18 to 30 and going forward.

This would be a two like study with Cure Act 003 out of 4% dose tested against placebo with both test materials now being applied twice daily.

This now means that both studies will each have a cohort of subjects dosed once daily.

Second cohort dose twice daily, enabling us to evaluate this increasing the frequency of dosing does indeed lead to an incremental therapeutic benefit for subjects in the studies.

We are very excited about these new developments in our clinical programs and as discussed.

We believe these protocol amendments may ultimately resolved.

Foster approval for.

Cure at 003 unnecessary syndrome, and with a more compelling dataset.

With that update on our operational progress I will now ask Gordon to discuss our third quarter financial results Gordon.

Thank you Michael.

As of September 30th our cash and marketable securities was approximately $14 million compared to $15 $4 million as of June 30.

Which we expect will be sufficient to fund our operations through the end of 2024.

Our operating loss for the third quarter was $2 1 million compared to $2 3 million for the third quarter of 2022.

The decrease was primarily due to lower professional fees and other general and administrative costs in the quarter.

I'll now turn it back call.

Call back to Michael to make some closing remarks and begin our Q&A.

Thank you Gordon.

We are entering a very exciting period for coin based on the positive clinical data reported recently, we are making a number of protocol adjustments to our ongoing clinical studies, which we believe may lead to a more rapid approval with a broad or a more robust dataset.

In addition, <unk>.

Following a thorough thorough process throughout the year, we have identified an agreed financial terms for the acquisition or licensing of a number of exciting new assets in the rare and orphan disease space that we believe could be highly complementary to our cause.

<unk> development portfolio.

While we are diligently working on finalizing at least one transaction as soon as possible. There can be no assurances that this will actually occur as we will only close out any deal. If we can raise the incremental funds required to complete the clinical development for that.

Asset.

We intend to use our current funds primarily to advance the development of cure at 003, and our order pipeline products only.

<unk> of any additional products will need to be funded by new capital.

We believe that in these highly challenging market conditions.

Such prudent use of our cash resources must remain a key priority for the company as we head into 2024.

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 you're using a speakerphone please pick up your handset before pressing dickies.

That anytime you question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

Okay.

Our first question comes from James Molloy with Alliance Global Partners. Please go ahead.

Hey, guys. Good morning. Thank you for taking my questions I had a question on the changes to the Oh.

Two the phase three trial.

10 to 20 in and from the two arms one arm in choosing the doses.

I think our expectations are for mid 'twenty four data does this change the the expectation for being able to file potentially should the data bear up based on this trial in say late 'twenty four.

Hi game. So thanks for the question.

And thanks for participating and we don't believe there's going to be any material change to the timelines. It does it affect the.

Paying says, which data will be released but overall, we believe we remain on track and possibly be able to speed up.

The approval of the product. So so these developments are positive overall.

Oh, great. Thank you and then on the.

The timing of AR.

In this the one transaction that you see very close on could you walk through again I presume and you mentioned that you don't like bringing I think you've raised the funds to do so can you walk through in an ideal world. When you would like to bring that in and how much you think it would take you need to raise do you have to run to get that through clinical trials.

Yeah, so I'm not going to get into any details about how much it would take to them to complete the clinical development of the product on this call.

And then the ideal world I would like to get as close to them prior to the end of the year.

We are as you well know we're not living in an ideal world at the moment.

So I can't really give a timeline I can just say look we have agreed financing terms that we believe are favorable to coin.

We're excited about that and we think this asset has the potential.

To be a very significant commercial product once approved.

But there are other factors at play here that are somewhat outside of our control. So we will remain diligent, but we will remain focused on ensuring that we don't put ourselves in a position where we bring in a new asset in the house and Senate are shocked because we cant fund the development out so I would ask you to be patient.

Uh huh.

Hang in there as we work through the process.

Absolutely maybe the last question acuity any updates I know you folks obviously focusing correctly so on methods and O three any updates on 04070 wait.

The other various early stage programs are those.

Sort of on hold for now.

That's.

So zero for which you know is our program E D.

Gains on hold as we continue to evaluate the commercial opportunity for our product there has been developments in this space and in the past year has been a problem here in the U S. There was a product that was approved in Europe don't rejected.

And in the U S and there are some other.

Pivotal data that should come out in the next several months as well so we remain vigilant and one of them.

Main watchful.

But not putting any.

Any resources into that at this point.

Seven in Norway continued to make progress with our partnership with Queens University of technology in Australia, as we have said.

For quite some time now these are early stage programs.

And on a different trajectory than zero, three but we believe ultimately they they could be important contributors as well so moving forward, but as I sat at a different pace than zero three.

Great. Thank you for taking my questions.

Thanks, Jim.

Again as a reminder, if you have a question. Please press star then one to be joined into the queue.

The next question comes from Mark Marin with Saks. Please go ahead.

Uh huh.

So.

The clinical data you have done a very strong job in securing distribution and you said you'll have nine agreements in place.

The clinical data that you reported do you expect that this will accelerate conversations with other potential distribution partners.

Yeah.

Great question so.

Thank you for asking Erin Patel.

Potentially yes look we receive a lot of inbound interest.

Regarding this product and you know we've consistently said.

We will commercialize ourselves in the U S and Europe.

But still there's a lot of interest from companies, who have an established infrastructure.

And like where the product is growing so well.

I think you're right it will increase.

Interest, we're hoping that interest would be in countries, where we have them partnered.

To be honest there aren't that many of them left at this point.

So.

So I think the short answer is yes.

Okay. Thank you.

Our next question comes from Dennis <unk> with <unk> partners. Please go ahead.

Hi, Good morning, gentlemen, thank you for taking my question my.

My first question I'm sure you guys have gotten them.

Put some back of the envelope math.

Figured out some price points could you could you tell us a little bit about your total addressable market the Tam for the N S product.

Yeah, Hi, guys. Thanks for that.

Could you again.

So we believe combined in U S and Europe, Theres, probably somewhere between seven to 8000 patients.

And.

In the countries that we've partnerships.

An additional 10 to 15000 numbers are difficult to come by as I'm sure you know.

This is a very rare disease and diagnosis.

It can be challenging but these are numbers that we feel pretty confident with.

In terms of price point.

We haven't.

Drilling down to a point, where I'm comfortable saying.

Giving you an exact number.

But the opportunity here.

We believe is substantially in excess of $500 million in total and could be significantly higher.

Okay.

That's a pretty strong number and my last question is just you know you were talking about a corning.

Some more assets for another company.

Now with your with your company.

Treated with 30 cents on the dollar for your cash how are people some companies not knocking your door down I'm trying to get you guys.

Boy, you guys up I mean rare disease drugs aren't easy to come by especially you're so far down the pipeline compared to your competitors.

Another great question and one I cant really provide any any details on but I think you've hit the nail on the head.

People are looking at this company see what were doing them, but we are just focused on.

What's in front of US we believe we have a great asset, we're looking to add to that asset with additional products and.

And we will continue to deliver whatever conversations come our way.

We have a board of directors to him to address that.

Okay, which makes sense to me so well if it was all coming in and you guys are looking at them.

Yeah.

I'm not going to comment, but you know.

I think you can see Pat wherever going down here.

No I appreciate it and you guys are just so undervalued is ridiculous I mean, you're getting the pipeline for free and like I said getting all your cash at 30 cents on the dollar it makes it makes very little sense.

Anyway, Thank you and have a great day and look forward to some updates.

Thanks, Dennis take care.

With no questions. This concludes our question and answer session I would like to turn the conference back over to Michael Myers for any closing remarks.

Yeah. So.

Just to say thanks to everybody for participating here today and as always we are readily available by phone email. If there are any follow up questions or concerns and we'd be happy to address them out and that have a great day and thanks again.

The conference has now concluded. Thank you for attending today's presentation you may all now disconnect.