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spk04: Thank you all for joining us here today for the earnings call and business update. This call is being webcast live on our website, ir.novidia.com, and a replay will be made available. Following prepared remarks, we will be conducting a live Q&A session, as you've just heard. Novidia's Chair of its Board of Directors, Mr. Alex Capello, the Vice Chair of its Board of Directors, Mr. Kim Scott, its Vice President of Finance and Administration, Ms. Erica Eves, and its controller, Mr. Joe Meyer, are all joining me on the call today. During the course of this conference call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop NVIDIA's molecular diagnostics and immunotherapeutics, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters. All of these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions, risks, and uncertainties, and could cause actual results to differ materially. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events, or otherwise. Investors should read carefully the risks and uncertainties described within the Safe Harbor section of our website. as well as the risk factors included in the company's most recent quarterly and annual filing with the SEC. As we begin our update and look back at events from Q4 to date, I thought it would be helpful to reiterate a few of our key areas of focus in our 2023 planning. One, we will continue RA or rheumatoid arthritis phase three trial success to full enrollment, NDA submission, and FDA approval. We'll fully fund the phase three trial and the board of directors is actively engaged in discussions with capital providers in support of our mission to identify this full RA trial funding. Our goal is to be fully funded this year. Three, we'll attract and retain the industry's top biopharmaceutical talent. As our RA development program success grows, so does the need to grow our team to help support key milestone achievements, identify and support key strategic relationships, and initiate new PRIR efforts as a way to share our trial and milestone success. As I mentioned a moment ago, on the financing front, the Board of Directors is actively engaged in our financing effort, and we hope to have news to announce there shortly. In the last quarter, we have advanced our clinical trials in rheumatoid arthritis, as well as our pipeline in other diagnostic indications and in therapeutics. We continue to make solid progress on our Phase IIb trial in rheumatoid arthritis, comparing imaging to biopsy. And during Q4, we presented at an international conference our updated promising preliminary results, supporting Telmanisept's ability to distinguish the fibroid pathotype from the non-fibroid in the first 13 participants evaluated by the time of the presentation. These strong early results support our hypotheses and provide excellent data in support of Telmanisept imaging as a biomarker of CD206 expression in joints of patients with RA. We also continue to enroll into the RA Phase III and are actively enrolling in 12 sites. We continue to advance our therapeutics and imaging applications through key existing collaborations with well-known institutions and investigators across the globe as we work to grow the company's intellectual property. We are proud of the progress we have made and the planning we are putting in place to benefit our associates and our shareholders here at NVIDIA. Regarding the CRG and Dr. Goldberg litigation matters, the company has had rulings that essentially bracket its exposure in both. We will continue to minimize exposure. Now I'd like to provide a brief update specific to our clinical results. So I'll begin with the progress in our rheumatoid arthritis program. In NAV 333, the phase three, we continue to have good enrollment into this phase three trial in RA. The initial indications we are pursuing for FDA approval are, one, early prediction of treatment response to a new or first-time anti-TNF-alpha therapy, and two, identify RA patients with low level of localization of telmanisept who are less likely to respond to anti-TNF-alpha therapy. As we have discussed previously, there is a large unmet need for reliable early predictor of whether a therapy is working in a patient with RA. Because if a drug is not working, the patient's disease is not being treated. And this can lead to long-term health consequences along with unnecessary high drug costs for ineffective therapies that also bring with them possible side effects. Our Phase III trial will establish the ability of telmanicept imaging to serve as an early predictor of treatment response in RA patients switching to an anti-TNF-alpha therapy, addressing that unmet medical need. In NAV 332, our comparison study of telanosept imaging to joint biopsy, we remain in active recruitment. As we've announced and discussed previously, the preliminary results of this trial have been promising. Our aim is to recruit patients with each of the three pathotypes of RA to obtain comparative imaging and pathology results, and the trial is designed so that we enroll a minimum of four subjects in each of the three subtypes of RA. fibroid, diffuse myeloid, and lymphomyeloid. So overall trial size has been expected to range between 12 and 24. To date, we have achieved our enrollment targets in two out of those three of those pathotype buckets, with patients having had both their imaging and joint biopsies completed. The primary objective of this study is to assess the relationship between joint-specific telmanicept uptake values, and the pathobiology of the RA-involved joints. Knowledge of an individual RA patient's pathotype may be clinically important because it may predict to which RA therapy a patient is likely to respond. There's a growing body of literature suggesting that those patients with the fibroid type of RA are much less responsive to the anti-TNF-alpha drugs. And so a means of determining whether or not a patient has this particular pathotype is seen as extremely important to a number of key opinion leaders in rheumatology. As of this time, there is no reliable way of assessing a patient's pathotype of RA other than by doing a biopsy. And we have hypothesized that Tomanicept could provide this information. So we presented updated preliminary results on the first 13 patients back at November's American College of Rheumatology meeting. That's the largest rheumatology conference in the world. These results presented there indicated that telmanicept uptake in RA inflamed joints is able to discreetly differentiate patients with the fibroid pathotype, that is patients with low macrophage involvement, from those having either the diffuse myeloid or lymphomyeloid types of RA, that is patients with higher macrophage involvement. So these data also provide support for one of our indications in the Phase III trials. the ability to predict from a baseline scan alone whether a patient is likely to receive a meaningful clinical benefit from an anti-TNF-alpha therapy. Since, as I mentioned, there is increasing evidence that if a patient has the fibroid type of RA, they are less likely to receive significant clinical benefit from anti-TNF-alpha therapy. You might recall that in our previously completed Phase IIb study, NAV331, that contained a pilot arm looking at the efficacy of tolaminocephal imaging at early prediction of treatment response, those patients who exhibited a low level of telmanose uptake in their joints on their baseline scan before they started therapy had an almost 90% non-response rate to anti-TNF-alpha therapy using a clinical gold standard assessment. Importantly, these promising early results have opened up conversations with pharmaceutical companies who are developing therapeutics for RA. with the possibility of telmaniceft imaging being used as a biomarker in their drug development pipelines. The key differentiator between now and prior discussions we have had with these kinds of companies is that we have this additional promising data in hand, and as we move forward and gather more data towards trial completion, if these current results hold, we will be in an even better position for discussions with companies with which to work. We continue to make very good progress on automating the imaging quantification as well, which will have significant benefit for the commercial product. We are working closely with MIM software, M-I-M, on a definitive agreement for them to be our commercial partner for image quantification of telmanisept imaging and RA. So once again, MIM is a leading medical imaging software company based in Cleveland with a large footprint in the nuclear medicine space. We are currently integrating their existing image analysis workflow into our phase three trial and their software should be used for the image analysis for this trial as well as our normative database trial data. Their workflow for these trials is extremely well designed and by integrating them into our trials at this stage, this should be helpful for development and integration of a fully automated workflow that they are developing. Already they have completed a pilot study using data from our earlier trials demonstrating that they can develop this fully automated application that should be able to robustly reproduce our quantitative imaging reads using our proprietary algorithm. This is important for rollout of a commercial product. The ability to perform the quantitative imaging reads rapidly and reproducibly, without having to have a bunch of people in a room actually drawing the reference regions and the regions of interest, will help us go at large scale through this automated method, and that will be critical to large-scale adoption of Telmanisept for RA. Keep in mind that all of this, the image analysis methodology, as well as the data upon which it is built, including the normative database you've heard us discuss before, is not only critical to deriving the most accurate and sensitive objective read of our RA images, but it also serves as a significant barrier to entry to possible competitors in this space. You might have also seen the conversion of a provisional patent application to an A1 patent application earlier this month. This application involves using clinical and serological markers in combination with our imaging readout to possibly improve our predictive capacity for treatment outcome over using our imaging alone. So we will have IP protection on combinatorial approaches as well, if they work and if granted. We have data from the NAV331 phase 2B trial that I just referenced that was completed a while ago that suggests this indeed might work. In the diagnostics pipeline development, we've completed preclinical studies on gallium-68 clemanisept for PET imaging and related next-generation manisept imaging agents. We work on this in collaboration with researchers at the University of Alabama at Birmingham, or UAB. We've also completed work on our NIH-funded preclinical studies for evaluating gallium-68 tomanisept and various new imaging agents similar to tomanisept in a mouse model of atherosclerosis. Work on another important set of preclinical studies was completed with our collaborators at UAB. This work explored varying the molecular weights of telmanosep-like constructs and evaluating their biodistributions following intravenous injection with and without competitive blocking. Results showed that by varying the molecular weights of these compounds and introducing competitive blocking agents, it was possible to significantly increase localization of telmanosep-like imaging and therapeutic constructs to target tissues like tumors, while concurrently reducing localization to off-target organs such as the liver. These results show a path to improving our diagnostic imaging and to greater and more effective targeted delivery of our therapeutic constructs to tumors and other sites of macrophage-involved pathology. We presented these results at the Society of Nuclear Medicine and Molecular Imaging meeting last summer. And these were electronically published on March 7th of this year in the journal Molecular Imaging and Biology. And you can access that online. On the therapeutic assets front, we are advancing our candidates in the oncology and anti-inflammatory spaces and preclinical studies with the goal of filing investigational new drug applications to advance to human trials in 2024. These filings will be significant inflection points and opportunities for licensing and partnering deals for the company. Work on new drug delivery constructs and new targeted payloads has also progressed. These new constructs carry new drug payloads that may be more effective than doxorubicin for beneficially altering the immune status of tumor macrophages, for example. Results in mouse models have demonstrated that when administered alone or in combination with another cancer drug, These therapeutic constructs significantly reduced the rate of tumor growth by an average of 76%. Some of our results covering new bisphosphonate payload constructs were presented at the tumor myeloid directed therapy summit meeting. More recently, on November 10th, the full spectrum of results for the paclitaxel and novel bisphosphonate constructs were presented at the annual meeting of the Society for Immunotherapy of Cancer held in Boston. In addition, we completed what's called a maximum tolerated dose study in mice for our best bisphosphonate-carrying construct. The results of this study will facilitate design of studies intended to evaluate anti-cancer efficacy of this construct in the future. All of our preclinical work with potential cancer immunotherapy constructs are intended to enable NVIDIA to choose a lead candidate for macro-type phenotype altering drugs for oncology indications. Preclinical studies are also ongoing in leishmaniasis. Leishmaniasis is a vector-borne chronic disease caused by a protozoan parasite that replicates in CD206 positive macrophages. It is transmitted to humans through the bite of infected sand flies found in parts of the tropics, subtropics, and southern Europe. It's rare in the United States, but in more tropical countries where the SAM5 vectors are found, it is a common, serious, and potentially life-threatening disease. The U.S. FDA has designated leishmaniasis as a neglected tropical disease, making new therapeutics of this disease potentially eligible for what's called a priority review voucher that NVIDIA could sell potentially for more than enough to back cover the cost of development, as well as accelerate a number of other pipeline candidates. Previously, NVIDIA scientists and our collaborators at the NIH published research results demonstrating that high CCD206 expressing macrophages play a role in the dominant form of the disease. This project has advanced significantly in the last year, with results from three separate experiments showing that a novel construct created by NVIDIA has significant therapeutic potential to control leishmanial infections in mice. Concurrent with reduced numbers of these parasites, alterations in the immune status of the lesions that are caused by leishmaniasis were observed with potential implications for the mechanism of action of our novel therapeutic construct. Additional experiments are ongoing or are planned to follow up on these very promising initial results. That brings me to our overall intellectual property front. We received notification of issuance of a patent from the United States Patent and Trademark Office for the company's application titled, Compositions and Methods for Altering Macrophage Phenotype. This patent covers the ability of our constructs to stimulate an immune response against tumors through targeted delivery of payloads that change the nature of macrophages to make them more pro-inflammatory. efficacy of these constructs has been demonstrated in preclinical studies, including the ones I just spoke about. We have also received notifications of issuance of patents in Israel and in Canada. Please refer to the earnings call press release from earlier today for more detail. So we continue to submit new provisional applications and work on our pending ones. We have filed a new provisional patent application describing a new chemistry for addition of mannose sugars to our monosylated dextran-based imaging and therapeutic constructs. This new chemistry results in a different linkage holding the mannose onto our constructs, one that is more stable than the linkage currently used and is designed to facilitate commercial scale-up and production of our next-generation imaging and therapeutic constructs. In partnership with our excellent patent attorneys, we have an active IP protection strategy for the company that will provide needed protections and rights to both our current diagnostic and therapeutic agents as well as to our next generation molecules and disease indications. On the Lymphaseq front, regarding Lymphaseq Europe and the rest of the world, our strategy has been and remains to find the right partners for marketing and distribution for Lymphaseq and other company pipeline candidates in Europe and beyond. The reason for this is we are focusing on the long-term strategy of partnering for marketing and distribution. On the drug manufacturing and supply front for both Lymphaseq and the RA product, we have been and continue to work with a new active pharmaceutical ingredient or API supplier as well as a final drug product supplier. Progress continues, and as of this time, we're advancing towards completion of these and readiness for clinical and commercial supply. This work has implications for Lymphaseq in China and LymphoAIM in India, as we need to be able to supply a steady and reliable stream of product to our partners in these countries. So these are just some of the highlights of the last quarter that we wanted to touch on for this update. We remain largely focused on the RA pipeline. specifically the Phase 2B imaging to biopsy trial and the Phase 3, while we continue to support and push progress on our other diagnostic and therapeutic indications. As always, I want to thank the team here for their tireless efforts to keep things moving and our network of clinical trial sites and academic research collaborators for all of their hard work. Our business strategy remains to advance our pipeline products to key inflection points and seek appropriate partnerships for commercialization and marketing. So with that, I'll close the update, summary update. I want to thank you, and I'm going to turn it over to Erica now for the financials.
spk02: Thank you, Mike. As announced last week, I will be leaving NVIDIA at the end of the month. Our current controller, Joe Meyer, will be taking over many of my responsibilities. So I'd like to introduce all of you to Joe, who will now read the financial results for the fourth quarter and full year of 2022.
spk03: Thanks, Erica. And for the first time, hello, everyone. Total revenues for the three-month period ended December 31, 2022, were approximately $1,000 compared to $50,000 for the same period in 2021. Total revenues for the year ended December 31, 2022, were $66,000 compared to $532,000 for the same period in 2021. The decrease was primarily due to the 2021 partial recovery of debts previously written off in 2015, the 2021 receipt of reimbursement from Cardinal Health of certain research and development costs, decreased grant revenue relative to small business innovation research in the NIH supporting MANICEP development, and increased license revenue from transitional sales up to MANICEP in Europe. Research and development expenses for Q4 were $1.1 million compared to $1.4 million for the same period in 2021. R&D expenses for the full year 2022 were $6.0 million compared to $5.1 million for the full year 2021. That year-over-year increase was primarily due to increased drug project expenses and increased employee compensation, including incentive-based awards, offset by decreased regulatory consulting expenses. Selling general and administrative expenses, or SG&A, for Q4 were $1.3 million compared to $2.3 million for the same period in 2021. SG&A expenses for the full year 2022 were $8 million compared to $7.5 million for the full year 2021. Following the ruling by the Texas court in August 2022, the company recorded $2.6 million of legal fees in SG&A pursuant to the CRG judgment. The year-over-year increase was also due to increases in insurance and depreciation and amortization, partially offset by decreases in employee compensation, including fringe benefits and incentive-based awards, expenses related to European operations, travel, legal and professional services, investor relations, and shareholder services, general office expenses, facilities costs, losses on the abandonment of certain intellectual property, and franchise taxes. NVIDIA's net loss attributable to common stockholders for Q4 was $3.5 million or $0.11 per share compared to $3.7 million or $0.12 per share for the same period in 2021. NVIDIA's net loss attributable to common stockholders for the full year 2022 was $17.2 million or $0.56 per share compared to $11.7 million or 40 cents per share for the full year 2021. NVIDIA ended the fourth quarter of 2022 with approximately $2 million in cash and cash equivalent. And with that, I'll throw it back to you, Mike.
spk04: Thank you, Joe and Erica. Thanks for everything, Erica, that you've done over the years, not just my years here, but before. And now I'd like to open up the call to questions. I'll let the moderator do that more professionally than I just did. Joining me for the Q&A session, of course, will be the folks here in this room, myself, Erica, Joe, and then, indeed, we have Alex Papello, the chair of our board, as well as Mr. Kim Scott, the vice chair.
spk00: And thank you, sir. We will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. We ask that you please limit yourself to one question and one follow-up, and then jump back into the queue if you have any additional questions. Thank you. One moment, please, while we poll for questions. And the first question comes from the line of Edward English, a private investor. Please proceed with your question.
spk07: Good afternoon, Mike. This is Eddie English, and thanks for taking my calls and questions. Before I ask my first question, though, I would like to extend a shout-out to Erica Eves for the 30-plus years of service and support, not only to NVIDIA but us shareholders, and to wish her the very best in her new endeavors. With that, Mike, the elephant in the room, based on the report that came out this afternoon in my mind, is the current cash position with only $2 million at the end of the fourth quarter in a historical cash burn rate of $800,000 to $1 million a month. Can you shed some light on how far in the future you all can operate with your existing cash reserves?
spk04: Hey, Eddie. Thanks for the question and appreciate the shout out. I'm sure Erica does too. Thank you.
spk02: Appreciate it.
spk04: In any event, so, Eddie, great question. Really, it's no secret that the company has been in a resource-limited environment, but we are optimistic that we'll have something to announce around capital infusion soon. As I mentioned, the board, members of the board are working diligently on this. And that's really all that we can say about it at the current time. I appreciate the question, though, so that's really what we can say right now.
spk07: Okay, one follow-up and I'll abide by the rules and then go back into the queue because I have a few more. But my next question is around your plans to become NYSE compliant by July the 28th. Are y'all on schedule to meet that deadline or what can you tell us about that?
spk04: I'm going to let Erica use her great financial wisdom to have one, you know, she should have something to say on this last Q&A. Go for it, Erica.
spk02: one final word from me yes so obviously one of the biggest issues facing us is is the NYSE cure that is required and I think the financing that the board is currently working on should go a long way towards satisfying the requirements and so I would say at this time expectations are that we will we will indeed become, regain compliance with NYSE by the end of the cure period.
spk07: Great. Thank you. I'll go back into queue and abide by the rules here.
spk00: Sure.
spk07: Thanks, Eddie.
spk00: And our next question comes from the line of Bert Carlson of Another Private Investor. Please proceed with your question.
spk06: Yes. Thank you for taking my call. I appreciate you touching on the info seek a few minutes ago. I wanted to hope, hopefully you can expand a little bit on that. I know that it's been eight years since we've retained the international rights to selling lymphocytes. And in all that time, it appears we've not been able to generate any significant revenue. And I wanted, if you could put your honesty on this, Is there something more specific we could do to make this happen, or is Lymphoseq a lost cause at this point?
spk04: Yeah, great question. I'm happy to answer and give you as much transparency as possible. So that's a semi-long story that I'll try to skip to a shorter version of. So as you and others know on this call, NVIDIA had licensed the European rights to Lymphoseq to a company called Norgene. And they're a fine company. Their strategy, you know, we might say was probably not optimal strategy for penetrating the market of sentinel lymph node biopsy assessments or lymphocentigraphy in Europe. And it's not all just on their strategy. See, in Europe, there is a viable competitor for lymphaseq. It's a version of a, it's a colloidal compound compound. There are different names, but one of the common names is NanoCol. It's a pretty good agent, and it's relatively inexpensive. In fact, it's actually very inexpensive, and it's pretty good. We and others, and there's a growing body of research that supports this, suspect or believe that there are advantages to Lymphaseq over this product that has really dominated the market in Europe for years. So, Norgene didn't do, you know, maybe the optimal strategy for penetrating a market that already has a viable product. We do think there are advantages to it, and to be fair to Norgene, it's been years in the making that researchers have produced publications that support what I just said is our belief that lymphocytes has advantages. So, one thing we think Norgene did Maybe that wasn't what we would do is they priced Lymphaseq at a premium without having enough of these data in hand to make the case in the very highly regulated European market to adopt Lymphaseq over a good product. Does that make sense? So what we have done is we've brought back the rice, as you probably know, Lymphaseq Europe to NVIDIA, and we've spent a significant amount of time getting our API and drug product development processes in gear so that we could potentially supply the European market as well as the rest of the world with Lymphaseq and or the RA product. With all of that said, we are actively in discussions with possible partners for Lymphaseq in Europe because it is not just us and some KOLs who believe there are advantages of Lymphaseq to nano coal or these nano coal-related products, but there are other possible partners who believe it as well. Having said that, there is a viable product out there, and so the case must be made strongly in a very highly regulated environment in Europe. It's not quite as smooth a sailing as it is in the United States. That's maybe too much flavor or detail for you. It is a product that we think has advantages over the existing product that dominates. And we are in discussions, and if I didn't say that in this call, I think I did. We've said it before. And so we'll continue to have those and see, you know, what the market will bear. But we're optimistic. That's about as honest as I can be.
spk06: Thank you very much.
spk04: You're welcome.
spk00: And the next question comes from the line of Mike Raschiel, a private investor. Please proceed with your question.
spk05: Yes, Dr. Rose. Thanks for taking my call. And Erica, like everyone, we wish you well in the future. Thanks for your 31 years. And Joe, welcome on board. My question, initial question is, observation first. I think there's a great underappreciation for this patent that you received on the M1, M2 reprogramming. in the TAMS. I just don't think the market appreciated it yet, and I don't know if many investors would appreciate it. To me, it seems quite outstanding. But taking that as an observation, there's also been a lot of science developed, Dr. Rose, over the last little while that M1, M2 programming, whether in reverse or inverse, also may be applicable in many other diseases and inflammations. Can you expand on that a little bit, and do you believe but we'll be seeing patent applications on that in the future.
spk04: Yes, thanks, Mike. Right on all counts and good questions. So some background for the folks who aren't so in-depth into the field. Very broadly speaking, macrophages can be pro-inflammatory, stimulate an immune response. That's the so-called M1 macrophages that you just heard Mike refer to. And then there are M2 macrophages that are more... they have the opposite kind of effects. They're wound healing. They quiet down the immune response. Some people would say in tumors, paradoxically, they're pro-tumor, actually. So there are these kind of extremes of the macrophage in the macrophage world. And looking at changing the phenotypes of the macrophage, driving them from one of those, the M1, for example, to the M2, or vice versa, is a very hot topic across the world because macrophages are very... powerful and prevalent cell type in the body and they're involved in almost all diseases really and so the opportunities there to help people to treat diseases is enormous macrophages play a key role in cancer growth and metastasis and in cancers the macrophages that dominate in and around the cancers are the kind of wound healing so-called pro-tumor types of macrophages that actually act as a kind of force field around the tumors to prevent the body's natural immune response from attacking the tumors. And so what we and many other organizations are doing across the globe related to the cancer is we're looking at therapies that are treatments that might change the phenotype or the nature of the macrophage and drive them from the the wound-healing M2s to the pro-inflammatory M1s. And if you can do that in people who have cancer and in those tumors themselves, you can then rally the body's immune response to attack the cancer. And as of May of 2021, to give you an idea of how large these efforts are globally to do just what I told you, There were 606 clinical trials that were running or have been completed just to do what I just said related to cancers. It's a huge field. And you know what's cool about it is really we're at the forefront of that, not necessarily in the progression of our therapeutic constructs into humans, but in the technology and what our drugs have been shown, what we have been able to show they can do in the in vitro or preclinical phases. So we're right there at the leading edge of this incredibly large opportunity field or space to help patients and to treat a large number of diseases from cancers to others. I can get into that in a moment. And that patent that Mike referenced was giving us our intellectual property around using our constructs to change the phenotype or the nature of macrophages as I just described. And, yes, there are going to be a whole series of patents that follow suit or applications around that. The fact that we can target macrophages of all types, the M1s, the M2s, and everything in between with our construct means that we can deliver all sorts of cool things, payloads they're called loosely, to the macrophage. And we can perturb them and drive them in different directions. And we have a very flexible, adaptable molecule that has all sorts of really great advantages over what almost every other group out there is using. I'm not just saying that because I work here. It's true. And so we have this great opportunity to be able to really shake up the world in these therapeutic domains. And one of the major things holding us back as a small company, of course, has been resources, financial resources. So we're very good at making a lot happen with a little. And so our goal, of course, this year, and you've heard it before, but I believe significantly that things are different now than they used to be. Our goal is to be fully funded so that we can help drive those things towards, you know, first in human trials, which is where we can, those kinds of inflection points are opportunities for large investments, whether they be partnering or licensed deals or whatever, or whatever we might decide to do. So we're trying to drive them towards that. So I might have gone astray from what you originally asked, but that patent is very important. There will be others coming along the way that are related. There are some already. You just don't know about it yet because they're not published. And this is a very hot and exciting area in not just cancer research but in other diseases. So, you know, I've mentioned in cancer you want to drive the M2 or wound healing pro-tumor type macrophages to M1. pro-inflammatory. In many other diseases, including almost all inflammatory and infectious diseases, you want to do the opposite. You want to take the inflamed, pro-inflammatory macrophages that are doing a lot of stuff to try to attack whatever the infectious agent is, but the body has a hard time controlling those things precisely. So what you want to do is you want to drive those towards the more wound healing type. And we have data suggesting that we can do that with our dexamethasone constructs. So we can perturb the macrophages and drive them in one direction or the other. And with that, the world is kind of our oyster. And almost every disease is touched by the macrophage, or the macrophage plays a central or critical role. So that's my spiel. Hopefully I addressed your question, Mike.
spk05: You did an excellent answer. Thanks, Dr. Walz. So my follow-up on that is that an observation that I can make, and maybe you can't opine on it, but I think it's opening up the IND that will really open this up to the world. And on that, do you have any other guideline you can give us into 2024 on your target range for that IND?
spk04: Yeah, sorry, thanks. I think that's still our goal and our objective. Obviously, it'll be really helped. We'll have significant help propelling us forward with full funding. But that is still an achievable goal because we've advanced some of these significantly in the preclinical space. And what you want to do to get towards that I&D, the other kind of two dominoes that need to fall, roughly speaking, or at a high level, are you need to establish that in preclinical models that your construct or your therapy is safe. and tolerated, and there are some specific studies you have to do for that. But they're very well known and established, and we can box those out, and we've already accounted for those in our timeline. And then the other thing you have to do is show that you can actually make the drug in a scalable fashion, and it's reliable and safe to be injected. And so those are the other two dominoes that need to fall. It's fairly reasonable for us, we think, to get to those in the timelines you've seen. With the caveat always we need to be resourced properly.
spk05: Excellent. I'll come back into the queue. Thank you so much.
spk00: And the next question is a follow-up from Edward English, a private investor. Please proceed.
spk07: Hello again, Dr. Rose. I'm curious. I've noticed in what's available to us in the public and the securities and exchange filings that There haven't been any stocks granted to the board of directors since late November. I haven't seen any form fours. Has something changed with the compensation for the board? Are they now receiving cash, or can you elaborate on what's changed, and if so, why?
spk02: Go on, Erica, please. Yeah, so in late 2021, the directors adopted a compensation plan for the next 12 months Due to our funding situation, many of the directors have chosen to defer compensation until we achieve full funding. And so I can't really speak for the board, but I believe that that may have had something to do with their decision to not award themselves an additional package this year. I think that they are probably waiting until we feel like they don't have to defer any longer.
spk01: Actually, several months ago, all of us had cash payments suspended. So we've all been working several months without compensation.
spk07: All right.
spk01: Thank you. And some for the whole year. That explains it.
spk07: Thank you. Next question, a follow-up, and that'll be my question for the day. you still have the third party assessment for the, uh, use of the, uh, Tomana step in, in the RA program. It's still out on the site and it has revenue projections that are quite appealing. And I'm just curious if, uh, you all still stand by those projections. I think, uh, there's some 41 million in revenue projected for the year 2024. Have those projections slipped or changed in any way?
spk04: Yeah, this is Mike. So the numbers I think are solid numbers in terms of the market potential and the growth curves even. Those are always based on modeling. In terms of the timelines, I mean, We're doing our best to meet the timelines that are on the investor deck that is out there right now. But, you know, to be honest, some of these projections were based on opening up a full suite of sites or a larger number of sites at a certain stage and then going forward from that period. And we've been, frankly, in a resource-limited environment for a while now. So some of these things are just naturally going to be pushed forward unless, and this is where it gets very complicated, so I'm not giving you double talk. I'm giving you real talk. unless we could open up more sites than we built into the original model. Enrollment is always something that we have some control over but not full. And then there are several other factors that are, including the trial size, which is variable based on the response rate to the anti-TNF alpha therapies. So you put all of that into the hopper, the resource-limited environment where we have not been able to open up all the sites we wanted to yet. and some of these other variables, and they can kind of counteract each other, so you end up with the same, you know, resolution of everything at the same time, or it might get driven forward or even happen earlier. So more likely than not, it gets pushed forward a little bit if you have to run a long time without a full complement of clinical trial sites open. And that's kind of where we are now. So I hope that doesn't sound hand-wavy, but like, you know, the first revenue generated may be pushed off a bit, But the numbers themselves and the trajectory, once it happens, we still stand by and believe because we have a good idea of the competitive landscape and the data that we're bringing to the table so far are significantly better than anything I've seen out there. Does that make sense?
spk07: Yes. If I could summarize, I think you're telling me the potential is still there and it's very robust, but the timing could go either way. You got it. Yes. Okay. Well, I'll end it there and just say thank you for taking my questions and certainly looking forward to some news soon on your financing. Thank you very much.
spk00: Thank you. And the next question is a follow-up from Mike Raschial, private investor. Please proceed.
spk05: Yes, Dr. Rose. Two follow-up questions. You mentioned briefly that as you advance the science, the engagement of future funding partners improve. Are those still active talks ongoing on the RABP partner potential? Is that still in the works and still progressing?
spk04: Thanks, Mike. Yeah, there's a complicated answer behind that. The answer is yes, we're still in, and I've said this so I can say it now, we're in discussions related to the implementation of, or the use of Tomatoseft in partnership with other drug development companies. And those are, there's a lot of interest in the NAF332 Phase 2B study for that. In terms of the overall business partner for RA, I think there are opportunities to discuss as we roll with other possible, with possible business partners as we roll through the trials. But really, and again, to be honest, what I think, Mike Rosal, the place where you're in the best position to get the most bang for your buck is when you've completed the trials and have strong data in hand. From that point on all the way to and into or through FDA approval, that puts you in the strongest position, I believe, because then you have approved out to one degree or another diagnostic data. So, again, if you want me to be completely honest here, doing deals earlier, you usually give up something because there's more risk, right? It's all about the RNPV, right? So the longer we can go, if we can be fully funded and drive this towards completion of a trial, good data, FDA, NDA submission, believe me, then we're in the strongest position to do a deal. So I think that's the strategy that you should pursue, at least if you can't. And we're trying to do that strategy. It doesn't mean if something happens in the intervening months or so, we're not turning it away. We're listening. But we want to make the best that we can of what we've got here. And really, that's the story.
spk05: Well, I think taking that approach of extracting the best value with the most informed and progressed results would be the desired way to go. And I think I'll finish with the comment that you made in the rheumatoid arthritis treatment patent application that should encourage people on this. And in two of the embodiments, in 106 and 111, it was stated that the exciting perfect prediction and remarkable test responses were generated in that testing for the treatment. Can you expand on any of that? Because that just exemplifies and amplifies the potential of this RA, the results you were seeing in the treatment of the RA patent application. Can you comment?
spk04: Sure. So thanks for that. That patent is primarily about using a combinatorial approach for achieving a better prediction capacity for our imaging agent for predicting treatment response in RA. And so we know that in the data so far, telmanicept imaging is a very good predictor in the data so far of clinical outcome at three and six months. And what we started to look at after the Phase IIb study was could is it an independent and additive predictor to other clinical serological biomarkers, which for the most part or entire part have really kind of failed to be adequate on their own or even in combinations, although there's a lot of people looking at different combinations. So we looked at our imaging prediction in combination with all sorts of different clinical and blood-based, that's what I mean by serological, biomarkers that are normally obtained in RA patients. We looked at these in all sorts of different cool ways. What we found was that it looks like we only have limited data to date, but it might be that if we take our very powerful imaging readout and combine it with some readily available and already validated clinical biomarkers, we might be able to improve our prediction capacity in some circumstances upwards towards a sensitivity of 100, right, or perfect. Never going to be perfect across the world, across everybody, across all time. But it's really about taking a combinatorial approach of our imaging readout with other biomarkers that are available. And it looks like there might be value there. And by filing that patent, then, of course, we have the intellectual property protection. And insofar as it relates to therapeutics, that should be therapeutic agnostic, although to date we've only looked at the anti-TNF alphas. So the exciting thing there is what we've learned to date is our imaging readout is an objective independent predictor of whether or not a patient is getting better or not from treatment of an anti-TNF alpha or with an anti-TNF alpha. It's independent of all the other clinical and serological or blood-based biomarkers. That's one, and it's really strong. If you add some of those, and we're looking to see which is the best combination, then you might improve your prediction, you know, not much closer because there's not even a lot of ceiling left, but even closer to the ceiling of getting it right all the time, or most of the time, or the vast majority of the time. So that's really cool and promising. So we're really trying to get to what is the the optimal predictive capacity for any patient, is their drug going to work or not, or is it working or not early. Now, related to the therapeutics, it's less specific in that it's not really specifically outlined in that patent. However, the fact that we can deliver, and we've demonstrated that we can deliver an imaging probe to RA-inflamed joints, and we can do this reliably, repeatedly, and stably, it should not escape your attention that then we could easily swap that out for a therapeutic. So we believe that we also have a potential powerful therapeutic in our hands, pardon the pun, of hands. And that remains to be explored more fully when the company has funding. But, indeed, we have the potential for a powerful therapeutic And what we're doing in that patent application is showing that on the diagnostic side, we really have all the bases covered. Does that make sense?
spk05: Yes. So on a therapeutic, did you guys do any preclinical just small tests to see if that therapeutic validated that concept you just talked about that's not in the patent? Have you tried anything or I imagine you have?
spk04: Yeah, there were preclinical studies that have been done in the past, and there was some promise to those. So let me leave it at that. And we have a plan for how we could go forward and really flesh that out. But in the limited data that I've seen to date, and much of this predates my time here, there was already promise shown. And we know a lot more than we knew then. So I think we're only in a better position.
spk05: Excellent. Thank you so much for taking all my questions.
spk04: Thank you.
spk00: There are no further questions at this time, and I would like to turn the floor back over to Dr. Mike Rosel for any closing comments.
spk04: All right. I think you've heard enough from me today. I want to thank you for joining us today, for your engagement and all of your questions. Once again, I want to thank Erica for all her hard work here over the years and welcome Joe here to the fray, at least the public-facing fray. I'm sure he's going to be great and have a fun time. And hopefully we'll be talking to you folks before too long. So thank you and have a great evening.
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