Q2 2019 Earnings Call
Greetings and welcome to Mirror merger Therapeutics Q2, 2019 earnings conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator systems. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I would now let's turn the conference over to your host Mr. Denbury. Thank you you may begin.
Thank you.
Good afternoon, everyone.
On the call today, our marriage and spreads.
The Chief Executive Officer, Bill Marshall.
Chief Financial Officer, Jason Weber Arnie.
And executive Vice President of research and development.
Paul Rubin.
Before we begin I would like to ride everybody.
The conference call and webcast will contain forward looking statements about the company.
These statements are subject to risks.
And uncertainties that could cause actual results to differ.
Please note that these forward looking statements reflect our opinions only as of the date of this call.
We will not undertake.
An obligation to revise or publicly release the results of any revisions to these forward looking statements.
In light of new information or future events.
Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements.
Are discussed in greater detail.
In our most recent filing on Form 10-K .
And our other periodic reports on forms 10-Q, and 8-K filed with the FCC.
I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of merger belt.
Thanks, Dan Good afternoon, everyone and thank you for joining us for a corporate update call for the second quarter 2019.
We issued a few important announcements this afternoon, which will be the focus of today's call. In addition, we will be providing updates on the events impacting each of our three clinical stage product candidates.
First we have regained you and rest of world rights to M. RG one town. In addition to the U.S. and Japanese rights that we had retained in our agreement as a result of server years, Serbia is portfolio realignment and decision not to pursue the development of MRG onetime.
Serbia will continue to support the program under the terms of our agreement through February 2020.
Well, we can appreciate the difficult strategic decisions that companies such as Serbia air required to make we believe that MRG 110 could benefit patients worldwide.
We believe the safety and Tolerability profile and preliminary proof of mechanism in humans generated in the phase one studies position NRG 110, as a phase two ready asset for cardiovascular indications and other indications.
Wouldn't benefit from tissue repair and enhance blood flow.
We expect to release Phase one data at an upcoming conference scientific conference in the fourth quarter of 2019.
Well Weve not announced future development plans for NRG 110, we may seek a new development collaboration for this product candidate in the future.
We also announced that the team has opened over 50% of the total sites currently planned for the solar trial.
While we initially experience delays in activating sites recruitment rates at those sites are now on pace with our initial predictions.
However, due to the impacts of the delays we experienced early in the Onboarding process. We now expect to report primary endpoint data from the solar trial during the first half of 2021.
Considering the developments around EM, Archie 110 men, the solar trial as well as our current cash position.
We made the difficult, but disciplined decision to move ahead with the restructuring of the business in order to focus our resources, primarily on the clinical development of cobalt Marson, Rambler Sun and Microrna 29 mimics.
I'll provide more details in a moment.
Let me now turn to a more detailed review of our pipeline and recent updates I will start with them RG 110.
We are finalizing the analysis of the results from two phase one trials, which were designed to deliver safety information about M. Archie 110, and also provide proof of mechanism mechanism evidence that could be used to support future clinical trials for the treatment of heart failure and other conditions, where patients may benefit from increased vascular flow and accelerated healing such as complicated lacerations in high risk patients.
We expect to report phase one clinical data on MRG 110 at an upcoming scientific conference in the fourth quarter of 2019.
We can say today.
That based on our review of the data from these phase one trials MRG 110 was generally safe and well tolerated and we believe the program is ready to advance into phase two clinical development.
MRG 110 represents the third Microrna targeted product candidate from our team has developed.
That has been generally safe and well tolerated and with preliminary proof of mechanism data in humans.
We believe this differentiates marriage and technology and demonstrates the capabilities of our team to develop micro targeting product candidates.
Turning to our lead program Kobal Marsa.
As a reminder, culberson as an oligonucleotide inhibitor of Mike Carney Onefifty five being developed in a type of blood cancer known as cutaneous T cell lymphoma, or CTCL as well as several other blood cancers, where the disease process appears to correlate with an increase in micro in a 155 levels.
I'm pleased to report that we have ramped up site initiation for the solar phase two clinical trial, which began dosing patients. This past April .
As a reminder, we are initiating clinical sites in the United States, Europe , and Australia with the goal of opening up to approximately 58 sites in 11 countries worldwide.
To enroll approximately 130 total patients.
To date Weve opened more than 50% of the sites for this trial.
As I mentioned earlier, while we have experienced delays in the activating sites recruitment rates at these sites are now approaching the pace, we that we initially had predicted.
Considering this update on the sites and patient enrollment we now expect to report primary endpoint data from the solar trial in the first half of 2021 instead of the second half of 2020 as we previously guided.
The primary endpoint for the solar trial is Oh are for or the objective response rate defined as 50% or greater improvement in the severity of the patient skin disease over the entire body with no evidence of disease progression in the blood lymph nodes or viscera maintain for at least four consecutive months.
Progression free survival will be secondary endpoint and we plan to use patient reported outcomes as additional secondary endpoints to monitor quality of life improvements.
Based on discussions with the FDA, we believe that achieving the primary endpoint from the solar trial could allow us to apply for accelerated approval of cobalt marson in CTCL in the United States.
We are conducting that because the solar trial in association with the leukemia and lymphoma Society.
Partnering with the society is providing marriage and with invaluable support which includes up to $5 million in equity funding upon completion of specified trial milestones as well as help in identifying and supporting potential patients.
During the second quarter, we also announced new data from the adult T cell leukemia lymphoma, or 80, Ll cohort of our phase one trial of Copel MRSA in an oral presentation at the 19th International Congress on H. GLP, one on HD healthy.
This new data showed continued durability of disease stabilization observed in patients with aggressive sub types of 80 Ll.
As a reminder, this patient population historically has a very poor prognosis.
With few potential long term treatment options.
The data generated to date for patients treated with global Myerson combined with a favorable tolerability profile supports our belief that copel marson, maybe a meaningful potential treatment option for patients with aggressive forms of 80 Ll.
We believe these clinical observations in another micro in a 155 elevated tumor type also supports the hypothesis that cobalt myerson may have utility in treating other malignancies with elevated Mike or anyone 55 levels.
Turning to Ram Larson, we're currently conducting a phase two clinical trial assessing the safety tolerability and activity of around Larson and the potential prevention or reduction of key Lloyd formation in subjects with a history of frequent key Lloyd scars, a persistent form of hypertrophic scar.
The trial has completed its enrollment and we expect to report data before the end of this year.
We're also exploring the anti fibrotic effects of RM Larson in the eye.
In April we announced new data from our preclinical studies at the 2019, ARVO meeting, which support our belief that Ryan Larson may serve as a novel therapeutic for the prevention of corneal scarring and hazing following ulceration due to infection or injury.
This data follows on the data announced earlier this year from our preclinical studies investigating the anti fibrotic effects of our EIM Larson in corneal Celleration, which suggests the topical application of or am Larsen, maybe an effective treatment to improve vision in patients suffering from multiple conditions, resulting in corneal scarring.
We believe these data further supports the topical application of rim Larson may be an effective treatment to inhibit corneal fibrosis in scar.
We believe rim Larson has the potential to address a significant medical need as scarring of the cornea remains a leading cause of blindness worldwide with no approved pharmacological treatments.
In may at the 2019 American Thoracic Society, we reported new data demonstrating that systemic administration of our second generation micro Arnie 29, mimic a preclinical product candidate for idiopathic pulmonary fibrosis or IP UF efficiently reduce sell extra cellular matrix deposition in a series of preclinical studies.
We believe that these these data coupled with previous observations in human with IP F support the role of Microrna 29, and Pathlogic fibrosis in the lung as well as the use of Mike running 29 replacements as potential therapeutics in pulmonary fibrosis.
This completes my review of the key programs in our development pipeline.
While we are pleased with the continued progress across each of these three programs.
Some of the recent events that I just described have impacted our timelines and prompted our decision to implement our restructuring plan that is focused on reducing costs and directing our resources to the advancement of cobalt Marson, and Mike Renee 29, mimics, including Rem Larson, while reducing investments in discovery research.
This restructuring plan follows a review of our cost structure, which resulted in a reduction of 26 positions.
These reductions are primarily in positions relating to research and corresponding project general and administrative support and other costs related to these areas.
We believe the alterations to our cost structure will allow us to continue to move forward with clinical and preclinical data generation that will inform future development decisions for our product candidate pipeline.
Before I turn the call over to Jason I want to thank all of our employees.
As we work through the cost restructuring.
We appreciate their diligent efforts in advancing each of our clinical stage product candidates and I look forward to reporting on a number of clinical milestones and data announcements in the second half of 2019.
With that I will now turn the call over to Jason Leverone, Our Chief Financial Officer to review the financial report results, we've reported earlier today.
Jason.
Thank you Bill and good afternoon, everyone. Today I will focus my comments on the announcements was released this afternoon.
First starting with cash we reported approximately 43.9 million in cash cash equivalents and short term investments at the end of the quarter and net cash used in operations of $7.2 million for the second quarter 2019.
As Bill stated earlier today, we announced the cost restructuring program, which we expect will reduce operating costs and extend our cash runway.
As a result, we believe that our current resources will be sufficient to fund our operations into the second quarter of 2020.
The cost restructuring program announced today includes Rightsizing, the company and other cost reductions, allowing us to concentrate our resources primarily on the development of Culberson with additional capital allocated to our Microrna 29 program, including room or some other migrating 29 mimics.
We expect the company will incur approximately 1.5 million in restructuring charges for retention severance and other restructuring related costs, primarily during the third and fourth quarters of this year.
In terms of the emerging 110 program and our collaboration.
Serbia will continue to support certain development activities through February 2020.
This will allow adequate time for the collaboration to complete the two phase one clinical trials of emerging 110, which we expect we expect to report data in the fourth quarter of this year.
Overall, our strategy remains largely unchanged.
And the team has done great work since the end of the first quarter on site initiation and the global phase two solar trial of cold Martian in CTCL.
And we expect that we will benefit from these efforts and investments in the coming quarters.
With that I'll ask the operator to open the call for questions operator.
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Our first question comes from the line of Liana Moussatos with Wedbush Securities. Please proceed with your question.
Thanks for taking my question.
For emerge when 10 have you started any re partnering discussions yet or do you have any target companies.
And also.
What are you going to slow down.
The micro irony 29 mimics or the <unk>.
In IPO indications or are you going to move forward.
Also Kim Ryan Larson leap frog tobar marched into the market now with the delay in the solar trial and then the fourth question is how much decrease in operations expense well the restructuring result in.
Versus.
What you've reported in Q2.
Great. Thanks, Liana I appreciate the question.
So with NRG 110.
As you remember, we had retain the U.S. and Japanese commercialization rights to the compound.
As part of our agreement with Servier.
We had we have had ongoing business development discussions around.
Those aspects of the.
The asset we have not specifically identified but we will continue to develop the strategy is we.
You know really complete the analysis of the phase one data.
And then pull together a package that weekend.
Bring out.
In terms of the Mir 29 mimics we really the intent of the restructuring was to allow us to focus on Cabo Morrison and also focus on the Mir 29 program.
So we we size the company appropriately and are able to continue effort. So we should not.
Be slowing those efforts we have generated.
Significant data in the ocular applications and we will continue to to.
Pursue an update on the applications for the next gen compounds in the setting of idiopathic pulmonary fibrosis.
In terms of Rem Larson are leapfrogging, we don't believe that that would be.
The case, the we are diligently focused on site initiation for.
For the solar trial, we believe that's the most important factor as I mentioned, we've seen sort of exception rates at the sites that are in line with what we've seen.
And what we had predicted.
So we are really adjusting the timeframe here.
With a you know based on our ability to better model as you know the modeling of sort of completion dates can be a challenge and we're zoning in on that now.
And we felt it was appropriate to.
You know sort of adjust the guidance cordingley.
Jason I'll, let you comment on Leann is last question. Thanks, Bill. Thanks for the question. The other so we haven't provided an exact estimate of the cost savings that we expect from these actions we have taken all of these actions into consideration when we.
Update and provide a new cash runway guidance and we'll continue to do that on a quarterly basis in terms of our expenses I will say that.
You know for the last.
<unk> expenses have remained relatively consistent over the last few quarters I think averaging around 11 11.1 million back to Q2 last year I do expect the next few quarters operating expenses to continue to increase with some restructuring charges.
That we spoke about today expected to be incurred over the next two quarters.
As well as delivering data on the reimbursement trial.
And the emerging 110 trial as well before the end of the year.
Also our cost.
Related to the solar in prison trials are are mostly related to site initiation and patient enrollment so I would expect.
Those costs to increase in the few quarters going forward as well.
Thank you.
Our next question comes from the line of Jonathan Miller with Evercore ISI. Please proceed with your question.
Hi, guys. Thanks for taking my questions I, just wanted to get a little color on recent management departures and it has been a little bit of turnover there I'd like to get your take on that and secondly, I know you said that you think you have cash runway now to second quarter of 2020, that's in line with what you've previously said.
So am I to understand that the impact.
Servier collaboration falling apart and your financial restructuring more or less balance each other out.
Getting you to about.
Same runway as you were.
Last quarter.
Hi, John Thanks for the thanks for the questions.
The.
In terms of the departure, we did announce that.
Our chief business officer, and decided to move on to another position.
We we.
I appreciate all of his contributions in the past and we really wish him all the best in his future endeavors.
The.
In regards to the.
The questions around the sort of.
Runway cash necessity at Bob ill, let Jason address said, what I will say is that you know as we've disclosed the.
The survey collaboration.
Does provides for continued.
Support for.
Ongoing parts of the study and we will.
Certainly be conducting things to be able to have quality control data to be able to present.
And.
It did pit.
It should have a relatively nominal effect on.
On the changes in cash for him, but I'll, let Jason comment on your question more thanks Bill.
Thanks for the question John So a lot goes into us determine your cash guidance and we did take into consideration the impact of surveys decision.
And those correct, where survey will continue to support.
Activities through.
Certain development costs through February 2020, it's safe to assume that any new trials or studies that we planned or contemplated.
We're not going to be part of that support going forward. So to the extent that we factor that into our previous forecast. That's that's a change that weve work through we've also included the cost of severance retention and other related costs.
And then normally in the normal course sort of updating our development cost with our team that that puts us in this near term runway window within a similar range, we will be for all things considered.
Great. Thank you for the ongoing NRG 110 trials. It seems like you do have some visibility already in Q.
Safety and Tolerability.
Do you have anything to say about potential efficacy measures in these phase one trials.
And if the trial.
Yes. It is.
Two.
Ready is that imply that you think it ought to be taken.
Data is supportive of taking it forward into phase two.
Yes, thanks, Jonathan the.
The data that.
We have seen again, we're going to report this at a meeting that will talk more about in the fourth quarter of.
Of this year.
It's clearly there the signals that we've seen so far suggests a good safety tolerability profile as well as preliminary.
Proof of mechanism in humans so.
We've been able to identify important biomarkers that are.
Related to tissue repair and vascularization and will it again, we want to really.
Reveal or discuss those in greater detail at the scientific meeting in the fourth quarter.
Can I just add some you that we also have data from these phase one trials that allow us to determine at least preliminary looking at dynamic endpoints dose and dose response.
So I think when you look at safety you look at a preliminary proof of mechanism and idea of what doses to use I think thats why were saying we believe this is a phase two ready asset at this stage.
Alright, thank you.
Our next question comes from the line of Mando Kumar with R.W. Baird. Please proceed with your question.
Hi, everyone. This is Jennifer on for Matt do thanks for taking our questions.
Just a few sort of follow up on the Twoq you 20 cash runway could you tell us what ongoing or future clinical study that Tim.
And then in terms of.
So were trial.
Could you give us maybe a little bit more of an idea of what fraction of patients had been recruited and then sort of in parallel how close you are to any interim futility analysis. Thank you.
Sure Jason you want them.
Speak to the low twentys joining runway sure. Thanks, Thanks for the question Jennifer.
In terms of the Q2 2020 runway that assumes continued funding for the solar and prism trials in culberson in CTCL as well as completing our phase one study and the expansion indications that's ongoing as well and the reimbursement study and key Lloyds, which we expect to report out later this year as well as the emerging 110 study with survey that we expect to report out later this year.
And Jennifer.
The around the solar trial, we have previously stated that we're not going to really guide on.
Yes, except accessioned numbers and recruitment numbers in detail.
Weve sort of focused in on site activation will continue to update on progress and at this point I would say that we are.
Ill.
As with as the data continues to mature and we get into.
The out of the summer season in the fall season will be in a better position to really be able to extrapolate towards the.
The timing at which we would be.
Ready to guide on the futility analysis, let me let me just add that as Bill mentioned, we now have more than half the sites online and on boarded.
And we now have enough data, where we can model.
Kind of the patient to session rate and that's why we're where we did make the adjustment, but we also feel that that these predictions are reasonable because we now have a good sense of the number of patients per site per month are actually being recruited into the trial.
Great guys. Thank you so much.
Our next question comes from the line of Leland Gershell with Oppenheimer. Please proceed with your question.
Hey, Bill and Jason Thanks for taking my questions.
First a couple of questions on Kobo Morrison.
I wanted to ask in the prior trial with the expansion indications.
HTML, you've seen some very encouraging.
David There I want to ask we might see the next update from the CEO .
Wilson said would that be at ash this year or perhaps another venue.
And also wanted to ask about thoughts for another what the next expansion indication.
Sure so that might be identical.
Sure so.
We are continuing our primary focus now in the.
In the 80 Ll expansion is really too.
Focus on the durability of response in the highly aggressive patients.
We're building that additional data set.
It turns out that the.
Isn't that while there is some good.
Sort of data around survival from diagnosis the disease being as rare. It is as it is there isn't a lot of good data around kind of survival posts.
No standard of care. So we are going to be doing some additional mining activities. We're also treating patients with some different paradigm. So in other words not necessarily after chemotherapy reduction, but with higher tumor burden.
So that we really get a good picture of the likely application of the.
Drug.
With the appropriate dataset in hand, our plan would be to then.
Move toward the.
You know communications with a plan in place with the FDA to understand.
The path forward.
The well, we will be giving some updates were scheduled at an upcoming meeting in late sort of.
September to give some updates and we'll we'll continue to update guidance on additional updates.
In terms of the expansion indications we had previously.
Previously reported at the.
T cell lymphoma forum on some preliminary observations in Dl Bcl, especially in the APC subtype and we do have the trial opened two patients with 80, Ll Dl Bcl of the ABC subtype.
As well as CLL patients.
And we'll continue to update as we make progress in those areas.
Okay, Great and then on the EMEA 29 side, given the Virgin signals, we're seeing.
I think you mentioned that you would also be looking on then well make a topical formulation will be appropriate for that just wanted to ask.
You know for clinical utility, where you may be in the development of that particular formulation.
Right. So the thankfully on the you know the we've continued to do the preclinical work to assess various.
Alterations the formulation that may affect.
Sort of wet ability and viscosity and things like that will will.
We've we've completed most of those studies and will.
Update.
On you know the observations that at future scientific conferences, but we feel like the asset is at a point, where it is you know near ready to move forward into.
Evaluation.
Necessary to move it into clinical trials the data that we reported on the formulation itself was just the drug in sailing where we got good tissue penetration. So we don't envision SP much done with formulation at this stage.
I understand that's helpful. Thank you.
Our next question comes from the line of Suji Jones with Jefferies. Please proceed with your question.
Hi, This is gee dialing for you and thanks for taking the question.
So could you elaborate more on the table and plan for rim Larson and given the large patient pool for Q like do you think you are going to have to find.
Development partner before advancing to the next stage. Thank you.
Hi, Suji. Thanks for the question so the Ram Larsen the study that we.
The phase two study that we're conducting now had several important.
Goals to it if you remember its an intra patient controlled study so we could do a relatively small number of patients.
We could control many factors around the development of key Lloyds.
I think one of the sort of confounding aspects of previous clinical trials has been the heterogeneity in a in key Lloyd growth and in our study.
We've controlled the position of the biopsy that's used to induce the queue lines. Its intra patient controlled again and our focus is really on an understanding.
In this trial what is an effect size that we see and then what would that project in terms of phase three.
And we're really using the data from this to make those important decisions that you're alluding to in other words is it most appropriate based on the effect size to seek out a development partner is it something that we could contemplate moving forward on our own and we do believe Ram Larson actually has additional applications one of our goals and assessing it in.
Ill persistent pathlogic scarring.
Was to demonstrate some proof of concept and pathlogic fibrosis as well so the the goals of that study our multifaceted it I think really.
Put us in a good position to determine the appropriate path and the appropriate investment decisions for Rem Larson moving into different indications.
Okay. Thank you.
Thank you.
As there are no further questions left in the queue.
I would like to turn the call back over to Mr. Bill Marshall for any closing remarks.
Great. Thank you we want to thank everyone for taking the time. This afternoon for an update on marriage and and for your support as we work to bring life changing medicines to patients.
I Hope you have a great afternoon, and thank you.
This concludes today's teleconference. You may now disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.