Q3 2023 Theriva Biologics Inc Earnings Call
Okay.
Greetings and welcome to the theory that Biologics Inc. <unk>.
23 third quarter operational highlights and financial results.
At this time all participants are in a listen only mode.
Everybody's question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It's now my pleasure to introduce your host Steve Shallcross. Thank you you may begin.
Yeah.
Thank you Irene and good morning, everyone and thank you for joining our call today welcome to three of our Biologics third quarter 2023 Investor Conference call joining.
Joining me on today's call will be Dr. Pimentel skull director General of three the biologics European subsidiary and Dr. Vince wait your head of corporate and product development of three of our biologics.
Three of our biologics issued a press release this morning, which provided operational highlights and included the financial results for the third quarter ended September 32023.
Press release can be found in the investors section of the company website at Www Dot the Riva Biodot come together with the quarterly report on Form 10-Q for the quarter ended September 32023, which we plan to file today with the Securities and Exchange Commission.
In addition to the phone line. This call is being streamed live via webcast, which will be archived on the Companys website www dot three of a bio dot com for 90 days.
During this call certain forward looking statements are guiding three of our biologics N V. C N biosciences current expectations and projections about future events will be made.
Generally the forward looking statements can be identified by terminology such as May should expects anticipates intends plans believes estimates and similar expressions.
These statements are based upon current beliefs expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in a three or a biotech biologics filings with the SEC many of which are difficult to predict no forward looking statements can be guaranteed and actual results may differ materially from such statements.
Information on this call is provided only as of the date of this call and three of the biologics undertakes no obligation to update any forward looking statements contained on this conference call on account of new information future events or otherwise, except as required by law with that I'd like to start by discussing our progress during the quarter.
In the third quarter of 2023, we continue to make steady progress to drive forward, our oncology focused portfolio designed to address unmet needs for difficult to treat cancers.
With our extended cash runway into the first quarter of 2025, we believe we're well positioned to execute on our corporate objectives and remain on track to achieving multiple value enhancing milestones.
Our primary efforts and resources are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate <unk> hundred one.
As a reminder, V C N O. One is a systemically administered uncle lytic adenovirus designed to selectively replicate within the tumor degreed to tumor matrix and increase tumor immunity Genesis.
We believe these multiple modes of action position VC no one for optimized tumor killing across several indications and in combination with different types of therapies.
The potential use of VSAT hold one to enable and enhance the use of chemotherapy and immune oncology products and otherwise refractory solid tumors. It's a strategic focus for three of them that may provide multiple opportunities in areas of high therapeutic need.
Today I'm pleased to report recent highlights from our ongoing programs evaluating <unk> in different indications in combination with chemotherapy immune checkpoint inhibitors in car T cells.
Building on our exploration of the potentially broad synergistic clinical benefit at least we see an old one we're pursuing new athletic virus candidates to leverage our novel Albumin Shield technology, which is designed to protect systemically administered athletic viruses from the host immune system and may fulfill.
Take repeated administration of oncologic buyers therapies.
This many available our pipeline programs to be used and standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy.
Additionally, as part of our oncology focused focused portfolio, we continue to screen and enroll patients in the second cohort of the phase one b two way clinical trial of Syn for designed to prevent potentially fatal out for adverse outcomes in patients, who undergo allogeneic hematopoietic cell transplant or <unk>.
T to treat hematologic cancers.
With this brief introduction I will now provide further detail and how these programs continued position three of us at the forefront of our political virus development, starting with our lead program <unk>.
Yeah.
Our confidence in D. C N O ones built on our strong clinical foundation as <unk> has been administered to more than 100 patients across diverse indications, including pancreatic ductal adenocarcinoma or <unk> head and neck squamous cell carcinoma, colorectal cancer ovarian cancer and retinoblastoma.
D C N O. One has been granted orphan drug designation in the U S and Europe for the treatment of pancreatic cancer and in the U S for retinal blastoma, providing additional opportunities for regulatory engagement and if approved market exclusivity.
Our most advanced program for <unk>, one is in <unk>, which has one of the lowest survival rates among all cancers and is an indication that is ripe for innovation.
It is well established that the pediatric tumor matrix is one of the key reasons for the overall pool poor therapeutic outcomes for these patients.
We believe <unk> has the potential to address the urgent need for new treatment options for patients with <unk> by degrading the tumor matrix and increasing tumor access by co administered cancer therapies.
Barrage, our phase two b trial of <unk> in combination with standard of care chemotherapy Gen side of being of Nab Paclitaxel as a first line therapy for patients with <unk> continues to advance with dosing well underway across sites in the U S and Spain.
We see no one has been well tolerated with a safety profile consistent with prior clinical trials.
We remain on track to complete enrollment with 92 available patients in the first half of 2024.
As a reminder.
The primary endpoints of the trial include overall survival N V C N O one safety and Tolerability.
Additional endpoints include progression free survival objective response rate and measures of V. C. N O one bio distribution replication and immune response.
Since this is an open label trial progress will be monitored very closely and steps to accelerate the clinical program may be implemented have supported by emerging data.
More broadly <unk>.
Raj trial, what unable us to determine the feasibility of repeated dosing of <unk> hundred one which could shift the paradigm to standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy and may lead to improved clinical outcomes for patients with <unk> and other solid tumors.
In addition to advancing the <unk> trial, we continue to work closely with key opinion leaders in the U S Europe Central and South America to refine our clinical strategy and retinoblastoma.
Since current clinical practice varies and there's no regulatory guidance specific to retinoblastoma drug development, we have submitted our meeting request with regulatory agencies and look forward to discussing the development pathway for <unk> as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma.
We believe <unk> has the potential to treat Beatrice seats in children with retinoblastoma, and we look forward to leveraging our orphan drug designation in this indication to facilitate protocol discussions with the FDA and other regulatory agencies to enable the development of new potential treatment options for this.
Difficult to treat cancer.
In parallel with company sponsored studies the potential utility of <unk> is being explored in a number of investigator sponsored studies that are underway at leading oncology research institutions around the world.
Today I'll focus on recent updates from our collaboration with the Kendall and Institute of oncology, our Iqos for patients with head and neck cancer, and the University of Pennsylvania for patients with pancreatic and ovarian cancer.
Data from the ongoing study of <unk> in combination with <unk> in patients with recurrent metastatic head and neck cancer were recently presented at the European Society for medical oncology annual Congress or ESMO.
Results showed enhanced patient survival up to almost four years, and one patient, which correlated with V. C. N O. One mediated increases in Cps score a key determinant of outcomes with anti PD lone checkpoint inhibitor therapies.
These data are remarkable given these patients have all failed prior lines of anti PDL one treatment.
In addition to the presentation at ESMO, we hosted a virtual K O L event, featuring Dr. Ricardo say of HEICO.
In addition to reviewing key takeaways from the ESMO poster presentation, Dr. <unk> discussed.
The unmet medical needs in head and neck cancer current treatment limitations and the therapeutic potential of <unk>.
So I can say also highlighted data from the <unk> phase one study showing that the <unk> treated patients had improved responses to later lines of therapy.
This is consistent with <unk> once matrix degrading effect, which enables better access by the codes minister cancer therapies, and the potential to elicit an extended anti tumor immune response.
Consistent with these clinical data a significant increase and the infiltration of tumors with anti PD, one positive immune cells was observed which statistically correlated with patient survival.
Additionally, the University of Pennsylvania continues to enroll and treat patients in their phase one investigator sponsored study.
Administering <unk>, one with <unk> car T missile cells to patients with ovarian and pancreatic cancers.
<unk> is designed to increase tumor immunogenicity and improved access by additional therapies, such as <unk> car T missile cells.
Our cell based immunotherapy have had limited efficacy against solid tumors to date, we are encouraged by the initial results highlighting the feasibility of administering PCL one with your car T missile sales.
These preliminary results were recently presented at the society for immunotherapy of cancer annual meeting or <unk>.
With no dose limiting toxicities observed to date. The study will continue to explore higher doses of <unk> co administered with <unk> car T missile cells with.
We look forward to further data from this study to determine if <unk> can improve patient outcomes with these powerful immunotherapies to treat solid tumors.
Turning to our ongoing phase <unk> clinical trial at Washington University, evaluating syn <unk> to reduce potentially fatal adverse events related to IV beta lactam antibiotic use in allogeneic, <unk> recipients, including acute graft versus host disease.
Or a gvhd and overgrowth in infection by pathological organisms, such as C difficile, and vacco mirrors vancomycin resistant <unk>.
The phase <unk> study is designed to assess the feasibility of using <unk> for and consists of three sequential cohorts comparing different IV beta lactam antibiotics following conditioning therapy.
And each cohort eight patients will receive syn <unk> and four will receive placebo.
While the data remain blinded interim analysis suggests that <unk> is well tolerated and was not observed in the blood samples of a majority of the available patients.
Our second cohort is underway and is designed to evaluate syn <unk> in combination with pepper sailing and tastes backed him.
This cohort will provide important additional safety information in particular with our oral syn <unk> has the potential to alter IV antibiotic levels in this patient population.
Overall, we're encouraged by the progress across our pipeline and the growing clinical data that underscore the promise of our systemic Lee administered athletic adenovirus in key indications and combinations.
We remain focused on driving our clinical programs forward and exploring opportunities to leverage our novel Albumin Shield technology and exciting additional tech knowledge from our Ob discovery platform.
Confident that the company's strong cash position and upcoming catalysts provide a solid foundation for execution and value creation.
We remain on track to complete enrollment for <unk> in the first half of 2024 meet with the FDA to discuss the clinical program and potential registration pathway for <unk> as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma before the end of the year and <unk>.
Fleet enrollment in the second cohort of our phase <unk> clinical study of Syn <unk> for the prevention of Gvhd and bone marrow transplant patients in the first half of 2024.
Now I'd like to briefly turn to our financial results for the third quarter ended September 32023.
General and administrative expenses decreased to $212000 for the three months ended September 32023 from $2 $4 million for the three months ended September 32022.
This decrease of 91% is primarily comprised of the decrease in the fair value of contingent consideration of $1 6 million, along with lower salary and bonus cost investor relation fees audit fees travel and VC and administrative expense is not included in the prior year offset by an increase in consulting fees.
Yes.
The charge related to stock based compensation expense was $95000 for the three months ended September 32023, compared to $93000 for the three months ended September 32022.
Research and development expenses increased to $4 million for the three months of its weather timber 32023 from approximately $2 6 million for the three months ended September 32022.
This increase of 56% is primarily the result of higher clinical trial expenses related to our barrage phase III clinical trial of <unk> and <unk> offset by decreased expenses related to our phase <unk> clinical trial of Syn for Enel generic acte recipients phase <unk> clinical trial in 'twenty than <unk>.
Increased manufacturing expenses related to our phase <unk> clinical trial of <unk> in 'twenty.
We anticipate research and development expense to increase as we continue enrollment in our <unk> phase II clinical trial of <unk> in our ongoing phase one clinical trial in retinoblastoma expand GMP manufacturing activities for <unk> and continue supporting RBC and 11 in other preclinical and discovery initiatives.
The charge related to stock based compensation expense was $40000 for the three months ended September 32023, compared to $28000 related to stock based compensation expense for the three months ended September 32022.
Other income was $388000 for the three months ended September 32023, compared to other income of $161000 for three months ended September 32022.
Other income for the three months ended September 32023 is primarily comprised of interest income of $382000 and an exchange gain of $6000.
Other income for the three months ended September 32022 is primarily comprised of interest income of $170000 offset by an exchange loss of $9000.
And a further strengthening of our balance sheet. During the quarter ended September 32023, we recognized a $1 $4 million tax credit receivable, an offsetting deferred R&D tax credit is a result of our participation in our research and development program sponsored by the Spanish government.
The program provides for reimbursement of certain expenses incurred in research and development efforts that we incurred in Spain.
As a condition for participation in the program, we will be required to maintain certain workforce levels in research and develop expenditures over the next 24 month period.
Beginning in Q1 2020 for the deferred R&D credit will be amortized monthly as a contra expense during 2024 and 2025.
We expect to receive the full cash payment under this program by the end of 2024.
Cash and cash equivalents totaled $31 $2 million as of September 32023, compared to $41 million point $41 8 million as of December 30, <unk> 2022.
We remain deeply committed to improving patient outcomes through these very hard to treat cancers and before we conclude today's call I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to developing and delivering on our mission.
I'd like to thank the entire three of her team our investors and the many people who have been supportive along the way, including our patients and their families with that we're happy to take a few questions.
Thank you.
We will now be conducting a question and answer session.
If you would like to ask a question. Please press star and then one on your telephone keypad.
Mr. Chan will indicate your line is in the question queue.
So my first signing T. He would like to remove your question from the queue.
For participants using speaker equipment, but it'd be nice to speak up your handset before pressing the sakes.
One of them and please hold the call for questions.
Okay.
The first question. We have is from James familiar of Alliance Global Partners. Please go ahead.
Hey, good morning, Thank you for taking my questions.
I had a question on expectations for the phase two b Raj the PDOC another to.
Complete first half 'twenty four separate enrollment completed in first half 'twenty, four which we anticipate sort of final data and what are what are our expectations for for next steps for the trials that is that something that should the data are good enough.
Actually go to the FDA and we're talking about registration where do they get.
Additional trial, regardless and you apply could you talk to you about that.
Right. So thanks for the question Jim.
A couple of points here, so first and foremost the plan is to have the trial completely enrolled in.
The first half of 'twenty, four and Thats consistent with our guidance.
I can tell you that we're on track with our enrollment expectations as we speak and we should be able to achieve that objective.
<unk>.
The primary endpoint of the trial is overall survival and if you recall from our phase one study we had a cohort where the median survival was was over 21 months, obviously completing the trial in early 'twenty four is not going to.
Bridge, you to that primary endpoint and that data won't be available until mid to late 2025. However, there are other endpoints that we're evaluating in this trial.
The next probably more important endpoint is response rate.
And because the trial is open label, we will have the ability to evaluate the data as it comes in real time from both of these arms and if we are in a position to observe response rates that were along the lines of the observations in the phase <unk>.
<unk>.
That will give us an opportunity to perhaps have discussions with regulators both in Europe and the FDA.
And if you recall that phase one data at the high dose we had a response rate of over 80%, where the response rate for the standard of care treatment Nab Paclitaxel in Gen side of being was around 23%.
So obviously one of the reasons for running this phase II trial with 92 patients is to see if we can replicate the observations that.
That we had and the results we observed in the phase one study.
With that type of data in hand.
We will have that that option. If you will to have discussions with regulatory authorities and anything is possible. Obviously the agencies both in the U S and abroad wanted.
To get these types of treatments to the patients as quickly as possible, especially if we're seeing significant improvements in survival.
So I guess an option is.
If the data are as robust as we observed in the phase one to convert this ongoing phase II into a pivotal trial and I guess theres always the possibility of some form of accelerated approval with the continuance of enrollment to collect additional data.
Does that help answer your question.
It doesn't say thank you very much much will depend on how the data works of course.
<unk> then all about the data.
Yeah.
Exactly right.
There are a couple of ideas I think that previously you guided to essentially filing by the end of 'twenty through the the.
It jumped up the key to the chemo within written the Blastoma potential R&D guidance for the end of this year and then also of the Nextgen on political adenovirus in channel 11, Central IND filing with trials, starting so the fourth quarter 23 could you. Please update where those stand and I know that maybe timelines are adjusted.
Right. Let me, let me talk to retinoblastoma very quickly and then I'll have menel discuss where we're at in our research and development initiatives.
The Retinoblastoma program continues.
Interestingly, we continued to enroll and patients enrolled patients in the phase one study.
And.
Is that data further matures, we'll we'll have something to talk about.
At a later date.
We do have a meeting with the FDA in December to discuss a path forward for the Retinoblastoma program.
And.
Together with our Kate.
Key opinion leaders around the world, we've come up with some ideas about potential designs for retinoblastoma program as we mentioned in our discussions earlier there is no approved treatment for retinal blastoma.
And those patients today that you treated are done so.
In multiple different ways, depending on what part of the world.
Those patients are being treated so having.
An approved treatment.
With a set protocol is something that not only we are very much interested in but I think treating physicians around the globe to interested in <unk>.
So after our meeting in December I think we'll have a bit better idea about how that program.
And that trial design.
They look and then thereafter.
Those discussions have been finalized then we could talk.
To tell you about what the timing of a program like that May look like.
And now you want to talk about the.
R&D efforts.
Okay. Thank you.
Yeah. So very briefly so our R&D team is working Barrington swiftly in the development of new candidates right. Now. So we have a bunch of different technologies that are some of them have seen already been public I chat for instance, the ACD technology. Yes, you are perfectly aware each technology that basically allows how are.
<unk> to escape the interaction with neutralizing antibodies, but our scientists have.
So the bulk of the new technologies right now and they are right now evaluating the combination of the decent new technologies with the ABB technology to generate more powerful product and in fact, that's something that they are very actively working in just fine tuning the best candidate to most of the cleaning that's something that we expect to probably.
At some point during the first half of next year also and in parallel to that the team has also been working in all the aspects related with manufacturing, which isn't greensick backups with department of products and it's very relevant because as you know for our products never application coupled with if you can say, it's a critical feature that allows for a much better.
Ah clinical behavior. So we have been increasing our capabilities here also in the manufacturing terms for testing the process development for the new candidates that we are developing and we have acquired a new equipment. Our laptop he already in our first of all have you seen in Europe, and we are very committed.
That with this new.
Capabilities, we are going to do just that generates.
If I can beat that far forward just moving ahead, the new candidates for stuff that we have done previously.
Okay.
Okay, maybe just last question on the pipeline and then if I could please I think you guys touched on most of your early stage I S. T is how could you touch on the the Glioblastoma along with University of Leeds, where that I S. T stands and then as you look at that you've been.
Have you been in these trials for a little bit we stand back and look to see one or two that look more promising than others at this juncture.
Sure Vince do you want to take the leads question first.
Yeah. So thanks, Jim at the University of Leeds study.
We had to well it's an investigator sponsored study of the investigators wanted to make an amendment to the protocol, which they did to help with that.
Scheduling of the surgery, that's part of that protocol as you're probably well aware in the U K everything runs through the NHS.
So scheduling was becoming a bit of a challenge and they submitted that protocol.
That protocol has recently been approved by the MH alright.
And we are now working on the appropriate drug supply for them to move forward with that study.
It's a study that's really a PK study as I just want to remind everybody, it's fundamentally to see whether or not intravenous virus and get into the Bryan. So we have the one patient that's been treated we don't have the final results from them, but that studies moving comparatively slowly just because of this amendment took quite a while to get to get approved.
So then maybe I'll just touch briefly on what I think we're learning from.
What we're doing in the clinic and what offers the most promise for unlocking the most value for the shareholders. Obviously <unk> is the most important program to the company. It's the one where we're committing.
I would say 90 plus percent of our financial resources to the.
The other program that is very exciting that we just recently.
<unk> talked about from ESMO is the data using VC, you don't Wanna combination with them and bring them up in head and neck cancer patients.
We had an investigator.
Call following the release of the data at ESMO and when we put that press release out.
That interview.
And conference is still available on our website and I encourage investors to go listen to it because it was quite revealing essentially.
This was a group of 20 patients.
That had failed checkpoint inhibitor therapy. These patients typically die within seven months after they've failed multiple rounds of checkpoint inhibitor therapy. These.
These patients were then given V C N O one and then started up on checkpoint inhibitor.
Therapy once again.
And we had some pretty remarkable results.
On average at the low dose we had a survival rate of 15 and a half months in at the high dose 17 three months. So this is an interesting program and potentially a program.
For partnering.
We have engaged with folks that should be interested in a program like this and we will keep you updated.
On the progress of those types of discussions.
Okay, well last question I know that you've touched on it in the prepared remarks about G&A pretty remarkable a drop in the quarter or is this just a level. We should start going forward is going to go back to more of a $2 million roughly.
Roughly per quarter than it had been over the last number of quarters.
It will go back to more of the $2 million that was a an anomaly resulted to the and counting for the contingent consideration we had a payment to the Griffith.
And.
Obviously every quarter, you readjust and revalue.
The future payments that.
Our all milestone driven so that was more of an anomaly for the quarter.
Alright, Thank you for taking the questions.
Yeah.
Yeah.
Thank you.
Further questions at this time I would like to turn the call back over to Steve Shallcross for closing comments.
Thanks, Erin and thank you to everyone for taking the time to join US today again, we remain focused on driving our key programs forward and we'll continue to evaluate strategic opportunities that we believe have an opportunity to drive significant shareholder value and long term success.
Once again, thanks for joining us today, and we look forward to keeping you updated in the future have a great week.
This concludes today's conference.
Thank you for joining US you may now disconnect your lines.
Okay.
Okay.
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