Q4 2023 Predictive Oncology Inc Earnings Call

Greetings and welcome to the predictive oncology fourth quarter 2023 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation, if anyone should require operator assistance.

During the conference. Please press Star Zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Glen Garner Lifesize Michael Thank you.

Glenn Garmont: And Glen you may begin.

Glenn Garmont: Welcome and thank you everyone for dialing into the predictive oncology full year 2023 financial results call first you'll hear from our Chief Executive Officer, and Chairman of the Board Raymond <unk>, and our Chief Financial Officer, Josh Blatche or will review our financials certain matters discussed on this call contains forward looking statements.

Joshua Blacher: These forward looking statements reflect our current expectations and projections about future events and are subject to substantial risks uncertainties and assumptions about our operations and the investments we make all statements other than statements of historical facts included in the call regarding our strategy future operations future.

Joshua Blacher: Position future revenue and financial performance projected costs prospects plans and objectives of management are forward looking statements. The words anticipate believe estimate expect intend may plan would target and similar expressions are intended to identify forward looking statements.

Joshua Blacher: Although not all forward looking statements contain these identifying words are actual future performance may materially differ from that contemplated by the forward looking statements as a result of a variety of factors, including among other things factors discussed under the heading risk factors in our filings with the SEC.

Joshua Blacher: Sept as expressly required by law the company disclaims any intent or obligation to update these forward looking statements and now I'd like to turn the call over to Raymond Veneer, <unk>, Chief Executive Officer, Raymond Thank you Glenn and good morning, everyone.

Raymond F. Vennare: It has now been slightly more than 12 months since we essentially restructured reposition and implemented.

Raymond F. Vennare: Our new strategic vision towards predictive oncology.

Raymond F. Vennare: I have to say that I'm very pleased with the progress we've made in a relatively short period of time.

Raymond F. Vennare: We have not only identified previously unutilized assets within the company, but we have further bolstered one of our most significant and valuable assets, our intellectual property and trade secrets.

Raymond F. Vennare: Sometimes progress is invisible.

Raymond F. Vennare: Drawing on this unique set of integrated assets and capabilities.

We have now begun to articulate what we believe is a compelling offering for accelerating oncologic drug discovery and development on a global scale.

Raymond F. Vennare: 2023 was a difficult but important year for us it was transitional and unnecessary.

Raymond F. Vennare: Rebuilding is never easy.

Raymond F. Vennare: It was also a year of learning and responding to that knowledge.

Raymond F. Vennare: It has enabled us to incorporate valuable commercial lessons for my first year in the market to further refine our business development initiatives and set the stage for accelerating growth moving forward as a reminder, and particularly for those who may be new to our story.

Raymond F. Vennare: Predictive oncology is unique in the evolving already.

Raymond F. Vennare: Vishal intelligence in drug discovery market.

Raymond F. Vennare: We are the only company to our knowledge that is able to bring together cutting edge artificial intelligence in active learning technology with a proprietary biobank of more than 150000 tumor samples more.

Raymond F. Vennare: More than 25 years of longitudinal patient specific drug response data.

Raymond F. Vennare: Our CLIA certified wet lab and more than 200000 pathology slides.

Raymond F. Vennare: You are currently being digitized and incorporated into our payroll platform.

We can add to that reservoir of proprietary assets more than 40000, formalin fixed paraffin embedded.

<unk> of human tissue, and an expanding portfolio of intellectual property.

Raymond F. Vennare: This platform, which is more than just an artificial intelligence platform, but its scientific methodology.

Raymond F. Vennare: Generates efficient highly accurate predictions of how tumors respond to drugs and supports those in silicone predictions with CLIA validated in vitro experimentation.

Raymond F. Vennare: Our biobank allows us to introduce patients and tumor heterogeneity into the earliest phases of drug development.

Raymond F. Vennare: Which enables our partners to gain critical insight into the prioritization and future development of potential drugs that have greater or lesser degrees of clinical success, well before human clinical trials are initiated.

Raymond F. Vennare: Having technically scientifically and commercially validated our pedal platform.

Raymond F. Vennare: We have clearly demonstrated that we are able to predict if a tumor will respond to a given drug with 92% accuracy.

Raymond F. Vennare: The implication for drug developers is that they can mitigate the risk of failure and expedite the probability of success in ways that have never been seen before.

Raymond F. Vennare: It has been well documented that drug development is inherently expensive and risky.

Raymond F. Vennare: Particularly in the area of oncology.

Raymond F. Vennare: Over the past 20 years in fact, there have been approximately 1500 drugs selected for clinical trials.

Raymond F. Vennare: 115 of which were ultimately approved for clinical use.

Raymond F. Vennare: In other words less than 8% of all cancer drugs should enter phase one trials are actually approved by the F. D. A.

Raymond F. Vennare: By harnessing the power of our pedal platform.

Raymond F. Vennare: Drug developers are able to save many millions of dollars and thousands of man hours pursuing the development of drug candidates. We predict are most likely to succeed in the clinic, while avoiding the risk of advancing candidates, which we may have predicted might scale and later stages of clinical trials.

Raymond F. Vennare: With pedal we are also able to generate proprietary data.

Raymond F. Vennare: That can aid our drug development partners in training novel AI.

Raymond F. Vennare: Brought tumor response models.

Raymond F. Vennare: While others in our industry have certainly attempted to replicate what we have already developed and currently own they simply cannot duplicate the comprehensive historical archives of tumor samples.

Raymond F. Vennare: Response data and domain expertise that we possess.

Raymond F. Vennare: This speaks volumes about the importance of our unique ability to integrate data from multiple sources into a single solution that can successfully introduced tumor heterogeneity.

Raymond F. Vennare: Into the early drug discovery.

Raymond F. Vennare: Moreover, we believe our bio bank and large repository of drug response data it gives us an enduring competitive advantage.

Raymond F. Vennare: It would take years, if not decades to reproduce.

Raymond F. Vennare: Although we don't discuss this as much as we could the fundamental significance of owning and controlling the entire continuum of biological samples historical drug response data computational capacity.

Raymond F. Vennare: I'll, let you referenced sets and wet lab experimentation.

Raymond F. Vennare: Means that we are in control of our own destiny with respect to the use of these assets.

Raymond F. Vennare: Ultimately if not inevitably we will not only be in a position to identify drug candidates ourselves.

Raymond F. Vennare: To license those candidates directly to big pharma.

Raymond F. Vennare: I would now like to provide an update on some of our more notable engagements from 2023.

Raymond F. Vennare: Beginning with cancer research Horizons.

Raymond F. Vennare: Recall that we have been working with C. R. H, the world's largest private fund or cause cancer research to evaluate three of their preclinical glutaminyl inhibitor drug compounds.

None: Did you determine which cancer types and patient populations are most likely to respond to treatment with those compounds.

None: And only a matter of a few weeks of actual last time, we were able to deliver the results of this first campaign.

None: Which was able to identify subpopulations of patients.

None: We're more responsive to their compounds across four different tumor types colon liver lung and ovary.

None: Armed with this information see our age is now in a position to prioritize development of the strongest candidates on the ideal tumor types and in the process save significant time and resources by pursuing only those targets that are most likely to succeed in the clinic.

None: The next step here might be used a sampling of the subpopulations of interest presumably responders in one or two of the tumor types of interest.

None: Perform more extensive molecular sequencing, including DNA or whole exome, <unk> RNA or full transcriptome.

None: This would provide much more information for the purpose of better defining the responsive patient tumor samples.

None: From our perspective this engagement with CRH provides crucial third party validation of our technology and serves as an important reference point as we engage with other leading cancer drug discovery and drug development companies.

None: Turning now to you PMC Nicky Women's hospital, we announced last quarter that we successfully completed a multi year retrospective study.

None: It's multi youll make machine learning models that could predict overall short and long term survival in ovarian cancer.

None: Ovarian cancer treatment represents an unmet need in oncology with epithelioid ovarian cancer being the deadliest of all gynecologic malignancies.

While these cancers are sensitive to frontline chemotherapy in approximately 75% of the cases these.

None: These women will ultimately experience disease, relapse, and an equal percentage, which is a trickle.

None: Outside of primary chemotherapy, there is no universal treatment decision path.

Determined the agents sequence and timing of the standard of care chemotherapeutic.

None: Chemotherapeutic agents.

None: The Magee study included data from 235 ovarian cancer patients.

None: And was designed to identify key features that drive overall survival endpoints.

None: We are very pleased to say that we were able to deliver strong predictive models with high levels of accuracy.

None: And our machine learning capabilities demonstrated the ability to attempt to buy prognostic subgroups within an ovarian cancer patient population.

None: We continue to engage with Mcgee on additional methods of incorporating these models into clinical practice, one potential application would be the development of an AI driven decision support tool leveraging the features that we identified as having prognostic importance.

None: The model to tailor therapies for individual patients and positively affect overall survival.

Another such application would be to drive more efficient and effective clinical trial designs.

None: While these discussions are ongoing we are in parallel utilizing this information for purposes other than clinical utility.

None: The possibility certainly does exist to reevaluate this data at <unk>.

None: <unk> biomarker leads digital pathology applications and new predictive models for other cancer types as well as models for drug rescue drug Repurposing and drug combinations.

None: Leaning heavily on this evidence in fact, we recently submitted a proposal to the arcade Mellon Foundation.

None: To further enrich the datasets necessary for modeling.

None: Including sequencing activities.

None: A gradation and curation of clinical information, especially outcome data.

None: And the Digitization and features nation of more than 200000 pathology slides currently in our possession delivering significant value and unique insights two highly regarded collaborators such as Mickey and through them gaining access to drug developers and Crows, who can benefit from our models is a.

None: A key factor in our business and corporate development efforts moving forward.

None: Our work with both CRH and Mcgee confirm without question, our ability to aggregate analyze and model multifamily data to successfully predict patient responses.

Just certain drug targets across heterogeneous patient populations.

None: Again, it is the patient heterogeneity.

None: That is incorporated into our models that truly sets us apart from others in the industry, both new and established AI players.

None: Patient heterogeneity is a major reason why oncology drugs scale in later stages of clinical development.

None: Turning now to other collaborations that we have discussed in the past let.

None: Let me give you a brief update on secret genetics.

None: Suzanne and Fuji.

None: Well, it's the most recent submission to the center for the advancement of science and space.

None: You may recall that last February we announced the collaboration with cheaper genetics developed the first ever genomics based approach to precision radiation therapy and drug discovery using artificial intelligence.

None: The objective of this collaboration was to leverage and maximize the combined power of predictive oncology expertise in artificial intelligence and <unk> approaches and see in biomarker development to identify novel radio protector and radiation timeshare trucks.

None: Over the past year, we have made significant progress having now evaluated training or develop models to predict changes in radio since the city.

None: For more than 3000 different drug exposures using wireless Stablish gene expression databases.

None: These findings from the basis of an NIH S. P. I R phase one grant.

None: Screen vast libraries of compounds to accelerate the potential development of drugs drug combinations or repurpose drugs to sensitize to protect human subjects from the effects of radiation.

None: The significance of them to find these radio sensitized and radio protectors extend well beyond drug Repurposing.

None: Using these models for example, we can proactively screen workers in the nuclear energy industry and in the military.

None: And in a clinical setting.

None: Optimize the planning and treatment of patients receiving radiotherapy.

None: So our work with Super Janet says potentially broad utility across a number of important applications.

None: And in the process, we have been able to expand those datasets, which may be leveraged in several important ways with respect to commercialization.

None: First to screen individuals' co radiation sensitivity or resistance to optimize the clinical efficiency of radiotherapy.

None: King.

None: The screen for interactions between sensitive or resistant patient tumor samples.

None: Therapeutic compounds.

None: And third to identify combined or develop novel or repurposed radio protective or radio sensitizing trucks.

None: These are not isolated elements, but synergistic activities that have created new and more interesting opportunities.

None: For example, as you might remember.

Our biologics group is led by Dr. Larry to Lucas.

Former astronaut and huge scientists for the space station.

None: Because of that experience and given its relationship with NASA. We recently submitted a proposal the center for the advancement of science and space to use our technology on the space station.

None: Gary and his team have now developed a novel membrane protein expression system to produce significant quantities of biologically active <unk>.

None: <unk> protein coupled receptors also known as GPC yards.

None: In other membrane protein classes.

The reason for this is that the microgravity environment in states can improve cell differentiation and increase the rate of cell growth and size, which enhances the yield have expressed GPC ours.

None: The more practical and immediate opportunity however.

None: This concept has also led to collaborations with Merck and company.

None: Oh, CNS and Red water space.

None: As a result of these developments.

None: We have just filed intellectual property.

None: For a novel method in system for expression and purification of G protein coupled receptors.

None: When issued will be in a position to broadly out license. This technology to biopharma for numerous drug development applications.

You may remember from our last call that predictive oncology in Fujian entered into a collaboration to developing novel first of its kind flu vaccine to market as part of a multi million dollar project funded by the department of defense for which a phase II B Grant has been submitted to the NIH.

None: I am pleased to say that this grant has now been awarded.

None: The details of which will be disclosed in the coming weeks pending approval by the department of defense.

None: Predictive oncology will play a critical role in making <unk> seen more stable and sustainable in a refrigerated state.

None: Which is a crucial requirement in the drug development process.

None: And lastly, predictive oncology and Fuji.

None: And the next few weeks announced their intention to co market, our endotoxin detection and treatment technologies as a novel solution for injectable pharmaceuticals and biological products.

None: According to a recent report by future market insights the $6 billion injectable drug market is expected to grow by five 8%, reaching a projected value of $10 billion by 2034.

None: Before turning the call over to Josh to review the financials.

Joshua Blacher: I would like to recap recent conference activity.

Joshua Blacher: During the initial months of 'twenty 'twenty four we had a meaningful presence at several investor conferences geared toward raising awareness of our company among high quality institutional healthcare investors as well as potential collaborators.

Joshua Blacher: These include biotech showcase in San Francisco, the bio CEO and Investor Conference in New York.

Joshua Blacher: The 2024, new cancer Oncology conference in New Orleans, during which I've sat on a panel discussing the topic of precision medicine and finally, the H C. Wainwright first annual artificial intelligence based drug discovery and development conference. We have more such conference appearances planned for the balance of <unk>.

Joshua Blacher: 2024, and we view these events as a critical element of our effort to create long term value for both our partners.

Joshua Blacher: And our shareholders.

Joshua Blacher: At this point I will turn the call over to Josh <unk>.

Joshua Blacher: Josh.

Thank you Raymond we concluded the fourth quarter of 2023 with $8 7 million in cash and cash equivalents compared to $22 1 million as of December 31, 2022, and $8 3 million in stockholders equity as compared to 21 8 million.

Joshua Blacher: At December 31, 2022, our net loss per share in 2023 declined approximately 50% at $3 48.

Joshua Blacher: For basic and diluted share $6 98 per basic and diluted share for 2022.

Company recorded revenue of $1 8 million in 2023 compared to $1 5 million in 2022 revenues for the year ended December 31, 2023, and December 31, 2022 were primarily derived from our <unk> operating segment.

Joshua Blacher: Operating segment contributed $1 135 million and 1.064 million for the years ended December 31, 2023 December 31, 2022, respectively. While the Pittsburgh operating segment contributed 493003 hundred 59000, respectively.

Joshua Blacher: Operation expenses, primarily consist of expenses related to product development prototyping and testing operation expenses decreased by 142000 to $3 7 million in 2023 compared to $3 8 million in 2020 to the deal.

Joshua Blacher: Kris and operations expenses in 2023 is primarily due to approximately 132000 lower research and development expenses related to office closures and approximately 52000 lower related to staff expenses. These decreases were offset by higher cloud computing.

Joshua Blacher: Expenses associated with our Pittsburgh operating segment net cash used in operating activities was $13 2 million in 2023 compared to net cash used of $12 4 million in 2022.

Joshua Blacher: Cash used in operating activities increased in 2023, primarily due to cash operating losses as well as changes in working capital, including decreases in accrued expenses and contract liabilities offset by an increase in accounts payable.

Joshua Blacher: Net cash used in investing activities was 302002 thousand 23 compared to 476000 in 2022 cash used in investing activities decreased in 2023, primarily due to a decrease in the acquisition of property and equipment net cash provided by finance.

Joshua Blacher: <unk> activities was 149000 in 2023 compared to 67000 in 2022 cash provided by financing activities. In 2023 was primarily related to proceeds refinancing insurance premiums are reinsured period with a short term note payable while cash provided in 2020.

Joshua Blacher: <unk> was primarily proceeds from the issuance of common stock and warrants the company incurred net losses about 14.0 million and $25 7 million for the year ended December 31, 2023, and December 31 2022.

That concludes the financial overview, we will now open the call for questions operator.

None: Thank you we will now be conducting a question and answer session.

Like to ask a question. Please press star one on your telephone keypad.

None: Confirmation tone will indicate your line is in the question queue you.

None: You May press star two if you'd like to remove your question from the queue.

None: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Kids one moment, please while we poll for questions.

None: Thank you there are no questions at this time I'd like to hand, the floor back to Raymond <unk> for any closing comments.

Raymond F. Vennare: Thank you all very much again for participating in this call.

Raymond F. Vennare: I just want to Uh huh.

Raymond F. Vennare: Reiterate the fact that.

We actually are very pleased with our progress since we implemented our new strategic vision for the company a little over a year ago.

Raymond F. Vennare:

Raymond F. Vennare: Acting on the information that we have learned.

Raymond F. Vennare: Accelerating our traction in the marketplace.

Raymond F. Vennare: With many of the companies that I mentioned in my remarks.

Raymond F. Vennare: Yeah.

None: So if there are no other questions.

None: I want to thank you all for participating I. Thank you for your continued support and I. Thank you for <unk>.

None: The remaining <unk>.

None: Involved in the company and we look forward to reporting.

None: Soon thank you.

None: Okay.

None: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.