Q2 2019 Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
Her today, Joe Bryant Chief Executive Officer. Please go ahead Sir.
Good morning.
Good afternoon to all thanks for joining our second quarter first half 2019 earnings goals.
We announced our Q2 financial results and business update a yesterday evening and you have seen the press release, most likely if not you can access access it on our website also this spread the presentation on our website in the investors section.
Here with me are Dr. Hariri, our Chief Medical Officer, and originally our chief financial and Chief operating Officer.
So let's get started I draw your attention to the disclaimer on slide two and then switching to the agenda on page three.
So it's a quarterly routinely for New York City between routine I would start with providing a business update.
Focus on the key highlights for the second quarter.
The year to date.
Eric will then take over to present, the financial highlights for the first half for the year and she will also summarize the major expected milestones for the remaining 12 months the coming 12 months.
We will all three then be available to respond to your up to your questions.
So before starting to update I think it's always a good practice to remind the essential for their company. They are summarized on slide four.
You can see and not surprisingly.
The same profile as with our last update call. We are still the red cell company focused on cancer metabolism. We indeed, that's the court late stage trials in pancreatic cancer phase three triple negative breast cancer Institute and an iced tea in acute lymphoblastic leukemia.
The phase two.
We have industrialized scale production with no to own.
But if a concerts once in Europe that you already have the ethanol could stand and then one in Princeton.
For the supplies Didnt do wish that can move screen recently.
The next two oldest late stage and manufacturing work we have a.
We continue to work on leveraging our gut feeling with different preclinical programs.
Briefly touched upon.
Going to the next slide slide five.
You see the pipeline summarized the overview, both clinical and preclinical.
The half of it is taken by our lead program area space, especially generics in Red cells and you see again here the phase three in pancreatic.
Pancreatic ductal adenocarcinoma Peter.
Second time.
Studies called Tribeca, one and you'll hear us talk to cold and so I think.
The phase two in triple negative breast cancer in first line Tribeca too.
The second time, the HEALOS study phase two.
Is the no four study Benson iced tea and to know for instance for the Nordic Society of pediatric hematology oncology. So therefore.
Investigator sponsored trial and the meaningful is the is the sponsor.
And then the brigante for them you see our next product candidate the time Mitch.
You see a renewal no that's new.
A squeeze a little bit so we have partnered over immuno oncology.
Modulation activities, which we buy a ticket in Boston.
And then we are continuing to work on.
Good morning, and metabolic diseases.
Mainly on most of them.
Archon is one deficiency.
Moving to the highlights on slide six you see here the summary.
I will not go in full detail because I have a page for each of them.
Zooming in on this.
That's for the quarter and.
The year to date.
Let's go to the first one is on slide seven.
It's.
Our top priority to phase three in pancreatic cancer.
So you know we launched the study in September 2018.
Phase three pivotal phase three study.
In Europe , and the U.S., but 500 patients to enroll.
Comparing standard of care chemotherapy.
To standard of care chemotherapy.
With every space others are probably.
Overall survival endpoint. So we redeemed last call I think we had 11 countries the accepting our clinical trial, so keeping all clinical trial of physicians.
We are now and these many countries on an office building.
Really well so the enrollment is on track or even slightly ahead of track in Europe .
And the news over the quarter isn't he that we'd also have the high and the acceptance by the FDA.
So that gives us the authorization to proceed and did United States, we expect that the enrollment in the United States.
Sure.
It's most likely.
Q4, but beginning of Q4.
Next to second line metastatic pancreatic cancer. We are also preparing see smaller but still a phase one study and stuff. So it's not a short preparing to decide is preparing to get started on an pasty in first line pancreatic cancer.
It's in the phase one he combination with fulfilling next because folfirinox is gaining a lot of growth in front line pancreatic cancer.
So it's the soonest, we can start producing in that.
In Princeton, we will.
So the India will be filed for this phase one study.
So that's pancreatic cancer.
The next indication for us in solid tumors. This triple negative breast cancer you remember.
Gross and also because of the unmet medical need but maybe also for this pick that these are metabolically very active tumor types.
Expect them also to very dependent and inspire gene.
It's a very it's a proof of concept study here to phase two.
Proof of concept that only in Europe , but 65 patients to be treated similar design standard chemotherapy with or without the various based product.
We didnt get the response rate primary endpoint. So we have the trial winterization skin.
Currently the all the four countries in Europe in which a study runs.
We have.
There's something missing in the slides, we have close to 20 sites initiated looks close to two.
Ambition that oldest artificial first patients have been treated.
It's a mix now the two Tribeca, one and traffic a two late stage programs enrolling.
This requires obviously.
Additional manufacturing capacity the growing demands.
In the <unk> and we don't occupies the reassured that took the entire building there.
I have two floors.
Part two floors of the building where we have over.
The one manufacturing facility that we already had before but we left no doubled it does sort of.
The first floor, where second four depending on where you are.
Yes.
And that's been at it so we doubled the number of schemes and this extended capacity started producing for the clinical trial in July has slipped.
The Princeton things are also ready we have the construction completed we have four clean rooms for the group's validation completed.
Expect that site will be able to start for the clinical trial.
Q4.
2019, so imminently.
And this is.
The debate updates on the wholesale the crust of product and it's.
It's related manufacturing.
Shifting to the the platform I'm going to slide 10.
And indeed, we you since you know we announced I think it was in June .
Collaboration strategic collaboration with reached Biotechnologies squeeze by technology is a cell therapy company based in Cambridge.
That's in Massachusetts.
It's a spin off of my key there have a technology.
We just acknowledging too.
Lord.
Different types of cells with with molecules by squeezing the sell through a very fine.
The.
And what we have done is we have granted Greece, an exclusive worldwide license on our.
I'd people multiple parts of our IP IP related to immune modulation, maybe two tolerance induction and.
Therapeutic effect she nation with peptides.
And.
We will take this home.
Their technology their loading technology with our IP and that's part of why we know how to develop these products, maybe focused on immune tolerance and and fractionation.
In this deal everything is eligible to receive an upfront and potential milestones up to 58 million for the first product and then royalties sales and potential commercial royalties on sales and potential commercial milestones up to 50 million for each additional to fill the board approved indication.
So this deal fits nicely in our strategy that we really are.
Increasingly focusing on cancer metabolism unrealistic programs, but still not forgetting power platform leveraging our platform to different applications different indications that made him to to partnering which we believe squeezed to be an ideal partner to take our immune modulation IP to that to the next steps.
So one more slides for the updates and coherent greedy, but that said we also have seen it announced changes to our board of directors. This is on slide 11.
Already in last call, we announced that we were going to propose example, Chris has been new director today, and we're meeting the to the shareholders and the shows have approved his appointment. Obviously this was on June 21.
Just now so in the 2019.
And he was done by the board of directors elected to be the chairman of the company.
Of the company's board of directors, So really pleased to actionable on board he brings us.
25 years of.
We have experienced in pharma, but also in biotech and a good mix of this pharma biotechs have started his career in companies like Biogen Sanofi He gilliatt.
Became CEO of since Intermune, which was then acquired by election and you may have seen that he was recently now appointed CEO of Moses.
He brings also a good mix.
Europe , U.S. French national billing U.S. for for many years.
So the.
The profile, we were we were looking for.
So we were pleased to have jumped on board were set on the other hand to see Alinghi, leaving our board.
She modified at Alaska, and recent couple of days ago.
I think the bird a board meeting that she.
Intends to resign the end of this month, it's really for personal reasons. In fact for work was instrumental Tesaro was acquired by GSK.
Well in his role has been.
Strongly since she has a very quickly.
Important role within the air and so the combination of scoring but becoming too difficult.
Between tanker for shipping on the board for three years and been a real good support to the company.
And I think with this I have covered the business update.
At least now to Eric to bring to take you through the financials for the first for the second quarter and the first half accuse you. Good morning, you all in the U.S. will reduce.
So this is.
Now on slide number 12.
It is a snapshot of our PML information for the first half of this year.
As you can see the highlight here a net loss of 29.3 million euros in the first half of this year.
This is an increase of 10.8 million.
As compared to the previous period, the six month of 2090 18.
This this is coming from 8.4 million increase in operating loss and that was attributable mainly to the six an increase in research and development activities expenses, mostly related to extensive that we had.
The company's phase three clinical trial in pancreatic cancer.
In the same time, we had a 3.1 million increase in GA expenses of which more than half 1.8 million Euro was related to the launch readiness of the company's additional manufacturing capacity in the U.S. and Cros and finally, we had a 0.7 million an increase in operating income of which.
The 4.9 million Euro dollar was related to the milestone payments from the signature of the license agreement with squeezed by the technologies.
In the same time, we had a 1.9 million decrease in financial income, which was mostly related to the translation into euro of our companys cash cash position held in us dollars.
So that was the highlight of the.
PML figures for the for the six months first six months of this year.
Now shifting to the next slide slide number 13 for a snapshot of our cash utilization and cash position.
As you can see the cash position at the end of <unk>.
The first half of this surgery 30 was 94.5 million Euro, which is approximately 107 million us dollars that is coming from a cast variation.
Cash utilization in the first half of the of this year of 39.9 million Euro.
And that categorization as the result of a 40.5 million net cash utilization in.
Operating investing and financing activities.
23.8 million in operating activities 7.6, 17.6 million in investing activities and 0.8 million in financing activities and at the same time with the application of the U.S. dollar in the period against the Euro we had a 0.6 million favorable currency exchange impact on the on the cash position.
With that.
That's.
Enabled us to confirm the.
Earlier guidance, we've given on the cash runway, which is getting us until the end of 2020.
Possibly into 2021.
That's the that's the highlight for the cash position and cash utilization and before we finish this presentation open the queue inefficient.
Reminding the key milestones for the next.
12 month periods of course.
Gil mentioned it earlier the thought of all GMP production facility in Princeton expected in Q4 this year a very imminently.
That will enable the start of the U.S patient enrollment in the phase three clinical trial for this second line pancreatic cancer trial that the tri be CA one study.
Which is also expecting Q4 to start.
And we also mentioned.
Well not for.
The 2020.
Periods, the initiation of the phase one investing investigator sponsored study with various styles in pancreatic cancer of the first line treatments.
And.
Oh later.
Included on the we we expect the results of the Phase two second line trial in acute lymphoblastic leukemia, No who study also nicely study and finally.
Towards the.
Midyear period of next year.
We would expect the interim analysis in the Tribeca One study the again the phase three in pancreatic cancer that interim analysis for superiority.
With that I will turn over the call to Shannon operator.
Welcome to the Q and a session. Thank you.
As a reminder to ask a question you would need to press star one on your telephone.
Withdraw your question press the pound key.
Please stand by while we compile the kewaunee roster.
Our first question comes from Boris Peaker with Cowen Your line is open.
Good morning. My first question is I'm trying to back out one I'm just curious for the interim analysis I guess, what would you need to show for the study to stop for efficacy and also is there a futility look there that if you don't have enough separation that potentially the study could be stopped.
This is a question for M&A.
Hi.
Just died he added that interim analysis does not have a teacher component to it.
I know he basically.
I can see we look at that.
If there is enough evidence of.
Atlantas interest at the hedge ratio then does that you just have to see could shake out there right now I can see we're coming to continue to try and keep completion.
No tissue and seeking and looking.
Approximately same hikari. She was similar has shifted the final analysis.
Yes, so what would the hazard ratio have to be fair to stop for efficacy.
It is what we have to write it before its around <unk> 0.72.
Okay, Great and my second question is on Tribeca to study in Triple negative breast cancer, just curious what's the timeline for the data and also if successful can this be a pivotal study or have you discussed that with the FDA to potentially be a pivotal study.
Let's start with the last point no. We have not discussed she actually safety as you know the indication is a new indication for us to kind of go it isn't married I signaled.
Of activity that can enable us to move into <unk>.
Absolutely.
Static and at that point in time. He is doing he doesn't give you advice from the MD 80 mph.
Gotcha, Okay, great. Thank you very much for taking my questions.
Thank you our.
Our next question comes from Catarina with Jefferies. Your line is open.
Hi, there just a couple of questions for me.
It seems like Princeton timelines have slipped again is there any particular reason why.
We're now not expecting it to come online until four king.
And then just regarding the Tribeca one into it.
Do we need to have a certain proportion of U.S. patients included in the interim.
Given that the.
Okay then.
Has yet to start in the U.S. could that be an issue. Thank you.
Hi, Lucy as you'll hear I'll start with the with the with your question and hand over to two months.
So yes, we would now say Q4, we hope its early Q4.
But indeed, it's two things we got the idea approval, which which was great because that openstack the path.
That off immediately also.
Allowed us to start the discussions with the sites on contract negotiations and site initiation. So that's one track.
But the other track is indeed that we still need to get the approval as we have.
Was based on the Ark facility.
Now that everything has been a bit later, we have decided that we will concentrate all the supply for the US part of the trial from Princeton.
And in order to do so at Princeton is now up and running but we still need an eye and the amendment to get the Princeton side also.
Part of the trial and so that's ongoing and that's why some of these two drugs will coincide we hope we expect so that we can start imminently at the beginning of next quarter.
And so I hope that answers your question and then maybe one for that.
The second part.
Rich two for the second part around the interim analyses and another on expected projected patients from the <unk>.
Technically are strictly speaking can you actually from a liquidity perspective.
You you it doesn't mean you experienced in the trend however, we need to.
To have you as patients clearly from an exposure from market access from other benefits to for the interim analysis that trial will enroll patients in this quarter, which I am sure. We wouldn't have our current projection is to have around 20% of north of 20% projected.
Number of patients.
If the study continues to completion so by the interim analysis it may not be that 20%, but again from a regulatory perspective, if picky picky I should do need a pretty defined.
Number of patients from a specific mission.
Great. That's very helpful. Just chill. Thank you I'm sorry to ask me about the Princeton to city seems to been delayed I believe in the last quarter, we talked about it coming on line three kids rather than necessarily the U.S. Charles I was just wondering what the delay was to the Princess.
The prison facility came online in Q2 two even.
So it will start to GMP batches for validation and everything so that we can if we inaugurated the site on the theater or June I think.
But indeed the now it's the two parallel tracks on the one hand the site initiation. This order fish the contract negotiations and the delay in the amendment.
To also fully have decided to part of the of the trial that is what's what's what's on going.
Okay I see thank you very much.
Thank you Lucy.
Our next question comes from Ren Benjamin with JMP Securities. Your line is open.
Hi, Good morning, guys. Thanks for taking the questions and congrats on the progress.
Joe If you don't mind can you just remind me how many sites are opened in Tribeca. One study right now do you still anticipate a 40 60 split between the U.S. and you and you mentioned on the call that enrollment is a head of expectations can you just remind us what your original plans.
Enrollment completion, Oh expectations were.
I'll start, but also had offered for the number of sites. It's the man who has built into it. So we started enrolling in September 18, with an estimate of 18 to 22 months of.
To get to full enrollment so we have close to 500 patients too.
Yes to enroll we expect that that will be around mid 2020.
So that I think the first part and in monkeys, we signed the rich we probably have around 70 sites now in in Europe , and we're targeting about 30 40 sites in the U.S.
Great.
And then in regards to the manufacturing facilities can you just give give us an idea.
What the current capacity is what they could potentially be expanded to and are these the facilities that would support commercialization and what would be sort of the Max production.
I'll leave this to Eric.
So the for the new facility first initially it was 16 room with one recaps the encapsulation machines in each classroom, we've extended that to 12000 rooms now working working into she's worth so actually we have quadrupled or capacity in New York and each machine on one shift is able to until she is able to make.
Approximately five hundreds.
But she's bashes figure.
And in the U.S.
The size of the Princeton facility is approximately the same scale a bit bigger than the your facility.
And.
It is operated in one shift now but could be operated in many shifts as well.
So the size of those two facilities, both in Europe , and the wells have been.
Designed to cover of course, the need for clinical trials right now, but there are there are they will cover initial committed commercial needs both in Europe and in the U.S. and then when we have to expense as you know.
No, it's not not only a matter of of expanding facility, but also.
Extending or supply capabilities, both in us and Europe also in terms of the Brazil. So that's why we believe that both in Europe and in the U.S. then want to expense that would be also possibly in other countries also to have a better coat coverage of the enteritis 33. So as soon as we have bigger commercial volumes. We are considering we are actually working on plans to expand to.
Another facility in Europe , and possibly another facility in the U.S. wants the Princeton facility is fully is fully loaded and in the U.S.
Given that we now have a facility on the east coast that would make sense to also consider a facility on the west coast, where the full coverage of the territory.
Got it I'm, sorry, just that I forgot to question on Tribeca, One has the how often does the idmc meat.
And have they have they kind of met recently with.
And.
You know what is there outside of the interim analysis I think they consistently are evaluating safety on a on a blinded basis is that is that correct.
Yes, I think this question.
I didn't see it plans to meet regularly.
Until the completion of the trial in the first case, the first reality analysis.
I think yes.
The core of the similar meetings are basically stated if you for the patients coming into the trial and he is also that we had our first I can see.
A few months ago that was basically to assess the safety and tolerability of the combination of grass, but with ONYVIDE all wish him a vaccine so it's almost like.
The size of that.
Small or smallish phase one.
And the analogy of the sponsors and try it.
Too so that was good day I think he looked at the data Blankie Ein John had no issues and now we are expecting our.
Subsequent fed civ Hugh.
Again during this quarter and so that would be in our active in Q1, yes.
In a sizable number of patients.
Got it.
But the one sorry, yes.
Sorry, which quarter.
Q4, I'm optimistic for Q4.
Hello.
Hey, John .
And just one final question from me regarding the squeeze collaboration just correct me if I'm wrong. It seems like its more and IP based collaboration and squeeze is really running the program.
Am I thinking about that correctly and when you talk about focused on immune tolerance can you give us any sort of color in terms of you know are they are they putting proteins into these red blood cells are they more DNA based therapeutics and these red blood cells.
How should we be valuing the the advancement of this program.
I'll take this one yes, you're right, it's really an IP. So it's the freedom to operate types collaborations with.
More than that so they were recently here. So we're really collaborating on advancing it but the basis is.
Freedom to operate on our IP.
So that they can with their technology take this forward in this immune tolerance and vaccination type of work.
Immune tolerance, we have done some work early days on the new tolerance, it's by loading the red cells with it can be proteins typically the receivable we have to work with Myozyme, we've had some work, which but factor eight even.
So because we know that a big part of the red cells and their life in the liver kupffer cells. If you give dues of.
Of of Red cells with these molecules inside we had some nice preclinical results on tolerance induction.
For reasons of focus and priority we already we have not continue toward their since this is quite a while but it still was there and we were sort of with it reached when when squeeze.
Knock on the doors, saying world would be interesting to to work on that.
I'm not sure which modules they are working on right now.
But its fairly similar to what weve done should probably proteins.
And all enzyme source.
And.
The Roseland by by looking at the Technology. We also have done work and published on its own sort of using the red cell to deliver like peptides to that and more to the screen.
I mean in all the discussions we also found that that.
We were really focusing all our energy to to the cancer metabolism. So also there have given the freedom to operate so that they can take this forward with their with their technology, but with our sort of support and collaboration.
Terrific. Thanks for taking the questions and congrats on the progress.
Thank you Ryan.
Once again, ladies gentlemen, if you wish to ask a question at this time. Please press Star then one are you touched on telephone. Our next question comes from Alex Ko That's what Kempen. Your line is open.
Hi, Thank you.
A question on.
Competitive landscape do you see any programs out there and developments in pancreatic cancer that could change the competitive positioning for you or hamper your 3%.
Thanks.
In fact pancreatic cancer is really a field, where we see very little happening at this was really also the reason of the of one of the reasons for us to go there the high unmet need and very little change over time.
Surely not any of the cancer metabolism agents like us pageant is absolutely not.
But also immunotherapy syntel the hard to get a foot.
Into into pancreatic cancer show, especially in one of the reasons, we think why the enrollment in the trial is so good is indeed, we see no competing.
Very little competing activity in especially in second line pancreatic cancer.
And nothing else that you see that could channel.
Come forward before you actually finished with $30, assuming let's say that the interim if successful.
Not on our our eyes are no no.
All right. Thanks.
Thank you. Thank you and I'm currently showing no further questions at this time I would like to turn the call back over to Joe Brian for closing remarks.
So.
Thank you everybody.
Thanks for your participation and attention and for your support to everything.
We will as usual as always keep you updated on our progress through the remainder of the year and every every quarter and in between so thanks for joining and.
Wish you a great day.
Thank you. Thank you all the way.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.