BiomX Inc.

Good morning and welcome to Biomics second quarter 2022 financial results and corporate update conference call. Currently all participants are in a listen only mode. There will be a question and answer session at the end of this call. I would now like to turn the call over to Marina Wolfson, Chief Financial Officer of Biomics. Please proceed.

Thank you and welcome to the Biomics second quarter 2022 financial results and corporate update conference call. The news release became available just after 6.30 a.m. Eastern time today and can be found on our website at biomics.com. A replay of this call will be available on the investors section of our website. Before we begin, I'd like to review the safe harbor provision. All statements on this call that are not factual historic statements may be deemed forward-looking statements. For instance, we're using forward-looking statements when we discuss on the conference call potential market opportunities, the design, aim, expected timing, and interim and final results of our preclinical and clinical trials, the sufficiency of our existing cash, cash equivalents, and short-term deposits, the potential receipt of additional funds if milestones are met, the potential benefits of our product candidates, and potential growth in shareholder value. In addition, past preclinical and clinical results, as well as compassionate use, are not indicative and do not guarantee future success of our clinical trials. Except as required by law, we do not undertake to update forward-looking statements. The full safe harbor provision, including risks that could cause actual results to differ from these forward-looking statements, are outlined in today's press release. which is noted earlier, is on our website. Joining me on the call this morning is Jonathan Sellerman, Chief Executive Officer of Biomics. With that, I will turn the call over to Jonathan.

Thank you, Marina. Good morning, everyone. The second quarter of 2022 proved to be a highly productive period for our company. We dosed the first patients in our Cystic Fibrosis Program, announced a second collaboration with Boehringer Ingelheim, published important new research supportive of our inflammatory bowel disease program and technology platform, and successfully completed a restructuring to further extend our cash runway. Let me first provide an update on our cystic fibrosis program. In June, we announced the dosing of the first two patients in the company's Phase 1 B2A study, evaluating BX004 for the treatment of chronic respiratory infections in patients with cystic fibrosis. This was clearly a very important milestone for the CF program, and I am pleased to report that despite the challenges facing many companies with respect to patient recruitment, we continue to make steady progress with respect to enrollment in this study. As a reminder, Biomics is developing BX004 for the treatment of CF patients with chronic respiratory infections caused by pseudomonas aeruginosa, or PSA, a main contributor to morbidity and mortality in patients with CF. The Phase 1b2a study of BX004 is composed of two parts. Part 1 will evaluate the safety, pharmacokinetics, and microbiologic clinical activity of BX004 in eight patients in a single ascending dose and multiple dose design. And provided that the pace of enrollment for the study will continue as expected, we anticipate the results from the first part of the study by the end of the third quarter of 2022. Part 2 of the study will evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2 to 1 ratio, and results from Part 2 are expected in the first quarter of 2023. As a reminder, the opportunity to address lung infections in CF remains substantial given both the size of the patient population and how few treatment options are currently available. Between the U.S. and EU alone, there are approximately 70,000 to 80,000 patients living with CF, and it is estimated that more than 60% of adults with CF are infected with this bacteria. PSA infections are the leading cause of loss of lung function in people with CF, and after patients have been infected with the PSA in their lungs, the infection is exceptionally difficult to fully eradicate. We are encouraged to see a growing body of clinical research and scientific publications that provide evidence supporting the use of phage therapy for the treatment of lung infections in CF. At the 2021 North American Cystic Fibrosis Conference, researchers from the Yale School of Medicine presented data on six patients with multidrug-resistant pseudomonas arginosa who were treated with inhaled phage twice daily for seven to ten days. The purpose of the study was to interrogate the mechanism by which phage-suppressed pure arginosa pyocyanin production and the effect on lung inflammation. Results showed that the phage therapy was safe and showed significant reduction in pseudomonas agonosa titers. In addition, phage therapy also led to an improvement in lung function. As noted in our past calls, Yale University has been the forefront of developing phage-based treatment to help address multidrug-resistant lung infections in CF patients. And through its ongoing compassionate use study, valuable clinical evidence is being generated to support this treatment approach. In June 2022, researchers from UCSD and other academic institutions published a paper in the journal Clinical Infectious Disease entitled Phage Therapy of Microbacterium Infections and Patient Use of Phage in 20 Patients with Drug-Resistant Microbacterial Disease. In the study, microbacterium isolates from 200 culture-positive patients with symptomatic disease were screened for phage susceptibilities. One or more lytic phage were identified for 55 isolates. Phage therapy was then administered to 20 patients on a compassionate use basis, and patients were monitored for adverse reactions, clinical and microbiological responses, the emergence of phage resistance, and phage neutralization in serum sputum and bronchial valvular lavage fluid. Results from the trial showed favorable clinical or microbiological response in 11 patients, and no adverse reactions were attributed to therapy in any patients regardless of the pathogen, phage administered, or the route of delivery. Awareness surrounding the Biomics CF program is also continuing to grow. On May 12th, we hosted a KOL webinar to discuss the treatment landscape for CF patients with chronic lung infections and the potential of BX004 to address patients with chronic BSA infections. The webinar featured presentations from key opinion leaders, Dr. Dave Nichols and Dr. Sain Aslam, who discussed phage therapy, the current treatment landscape, and the unmet medical need in CF patients with chronic PSA pulmonary infections. We then presented the X004 as a potential treatment solution, providing a review of the phage candidate's preclinical activity and an overview of the ongoing clinical development plan. A recording of the webinar is accessible through the investor section of our corporate website. We believe that enthusiasm appears to be building for exploring the potential of phage therapy in treating CF patients struggling with multi-drug resistant bacterial infections. With so few treatment options available, we are very pleased to see a growing body of clinical evidence and published research that points toward the potential of phage therapy to play an important role in helping CF patients combat these persistent, difficult to treat infections. Given its significant unmet medical needs for these patients, BX004 program remains our clinical development priority at Biomics, and we look forward to presenting our initial clinical findings in the near future. Turning to our recent partner activity, we were also very pleased to announce a second collaboration with Berger Ingelheim during the quarter. Under the new collaboration agreement, Biomics will utilize its X-Marker microbiome-based biomarker discovery platform to identify biomarkers for pathogenic bacterium thought to be associated with IBD. Such biomarkers could help identify IBD patients that would benefit from the potential therapies targeted at the microbiome. As a reminder, we entered our first collaboration with Berger Ingelheim back in September 2020, which focused on identifying biomarkers associated with patient phenotypes in IBD. Collaborative research is an integral part of the biomics culture, and industry-based partnerships, such as those with BI, will likely generate important new insights to help direct our future research efforts in IBD. but we also seek to build strong relationship with academic and independent research institutes. And earlier this month, we're proud to announce the publication of a research paper in the renowned scientific journal Cell, entitled Targeted Suppression of Human IBD-Associated Gut Microbiota Commensals by Phage Consortia for the Treatment of Intestinal Inflammation. The research was conducted across several organizations, including Scientists in Biomics, the Weizmann Institute of Science, and K University School of Medicine. The paper presented positive results from a proof-of-concept assessment in preclinical model of IBD. More specifically, researchers demonstrated proof-of-concept assessment of Klebsiella pneumonia targeting phage by generating an orally administered lytic 5-phage combination product specifically designed to target sensitive and resistant IBD-associated KP clade members through a distinct mechanism. The lytic 5-phase treatment enabled effectively KP suppression in the colitis-prone mice and drove attenuated inflammation and disease severity. Collaborative research with our academic partners can provide invaluable insights and external scientific validation for our company's program. In April, we announced the publication of a paper in the Journal of Bioinformatics. The research was conducted by scientists in biomics and specifically relates to the development of an algorithm named Exotos. that has enabled us to consistently generate hyper-accurate next-generation sequencing data for a single-mix analysis, thereby providing a more detailed genetic understanding of our phage product candidates. Importantly, Exotis is now being leveraged across our entire R&D platform, and because of the open-source nature of the algorithm, other researchers external to biomics can also use this algorithm to conduct analysis on various genome-related projects. Turning to corporate news, we announced the restructuring during the second quarter, which allowed us to further extend our cash runway through until at least mid-2024. Obviously, such decisions are never easy, but given the prevailing conditions within the capital markets, we must ensure that our company is well-prepared with more than sufficient resources to navigate through this challenging period. I'd now like to turn the call over to Marina Wolfson, our Chief Financial Officer, to cover our financial results for the quarter.

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q, which will be filed later today. I will walk you through some of our brief highlights. As of June 30, 2022, cash balance and short-term deposits were $46.7 million compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities. Research and development expenses net were $4.6 million for the three months ended June 30, 2022, compared to $3.8 million for the same period in 2021. R&D expenses net were $9.5 million for the six months ended June 30, 2022, as well as for the six months ended June 30, 2021. A decrease in receipt of Israel Innovation Authority grants resulted in higher R&D expenses net, offset by a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce. An additional offset is due to pauses in the development of BX003, the product candidate for the treatment of IBD and PSC, and our product candidate to treat colorectal cancer, as well as the discontinuation of the product candidate for the treatment of acne and BX001. General administrative expenses were $2.4 million for the three months ended June 30, 2022, compared to $3.1 million for the same period in 2021. General administrative expenses were $4.8 million for the six months ended June 30, 2022, compared to $5.6 million for the same period in 2021. The decrease was primarily due to a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce. In addition, the decrease is due to additional expenses incurred in 2021 that resulted from moving into new premises. Net cash used in operating activities was $16.4 million for the six months ended June 30, 2022, compared to $12.8 million for the same period in 2021. We estimate that existing cash, cash equivalents, and short-term deposits will be sufficient to fund the company's current operating plan at least through mid-2024. And now I'll turn the call back over to Jonathan for his closing remarks. Jonathan.

Thank you, Marina. With the continual threat of emerging multidrug-resistant pathogens, we are encouraged to see more evidence that phage can be an important therapy for treating lung infections and cystic fibrosis. Patients clearly have few treatment options, and new therapies are desperately needed. We believe that our BX004 program addresses this unmet medical need within CF, and we're advancing this program with our existing financial resources to ensure we reach the critical milestones to help drive shareholder value. While the last few months have been challenging for the biotech sector, we know that generating solid clinical data is the key to rebuilding investor enthusiasm. and we look forward to sharing our initial clinical results for BX004 in the near future. Operator?

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate 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 the handset before pressing the star keys. Our first question is from Joe Pangenis with HC Wainwright. Please proceed.

Hey, good morning, everyone. Thanks for taking the question. Jonathan, I have a logistical question and then a little bit of a getting into the weeds question. So first, I guess, how is your current supply and manufacturing efficiencies and how are your, say, more near-term plans for any expansion?

So, Joe, good morning. It was a pleasure. You know, logistics is critical, and I think we almost two years ago took a decision that we have in-house manufacturing because we want to control the supply chain from beginning to end, and phage being a unique modality, I think that proved out to be a good decision. So, everything is planned for, and we have capacity that can support, you know, all of our phase two needs in the programs we anticipate. Obviously, the headcount reduction did have an effect on the headcount in the CMC organization. We still have what we need to support the CF program, and we do have the budget and resources to support the topic, but we can't do it simultaneously, and that's why on the topic we're still kind of thinking about what kind of guidance we'll give in the timelines of that study.

That's very helpful. Thanks. And then I guess sort of my weeds question is, you know, when you look at CF, and I'm additional indications for phage every micro environment is very different CF is obviously very tough the lung you know biofilms and beyond and obviously the Yale data continue to steer the ship of overall phage in the right direction so I guess especially from a clinical data standpoint so I guess you know are there any important potential differentiators or similarities to the Yale data with regard to formulation and delivery of your cocktail

So, you know, the data that we have on the Yale study is obviously very limited. I will say that the basic approach that we're using is always a cocktail versus, I think, many of these cases, which are a single phage. So what we're trying to do is have a cocktail which is broad, and hence we have a few phage kind of hitting the bacteria simultaneously. So I think that could be a potential advantage, and we also make sure that we have antibiofilm capabilities as well, because we do know that biofilm play – an important role in the indication. There are biofilm present in the lungs. And specifically, we make sure that our phage cocktail has an element that has anti-biofilm. So I think that actually provided good advantages. But, you know, I share sort of your announcements, and I think the excitement with the indication, because I think one of the key challenges that we know with phage being a large molecule, getting to the site of action, right? We've seen that in acne. And in CF, I think data that came out of Yale and others is actually supporting the fact that phage and nebulized phage specifically can get to the site of action. We validated at least in preclinical models that we have it as well in terms of producing nebulized phage, making sure we understand the droplet size, whether phage are viable in the droplet, sort of did all that optimization. So I think that should be extremely encouraging.

That's very helpful, Jonathan. Thanks and good luck. Pleasure. Thank you.

Our next question is from Kristin Kuska with Cantor Fitzgerald. Please proceed.

Hi, good morning and good afternoon everybody. Thanks for taking my questions. The first is I know we spoke in the past about patterns of infections now that there are a few commercial years of experience with Trikafta being on the market. But could you give us a sense of any predictability factors that have been observed for when these infections might occur? And you talked a little bit about the fact that some of them just keep coming back no matter what the intervention. And then, you know, also factors around different levels of severity.

Good. So, good morning, Kristen. And I think it's a really important question. You know, there isn't that much data because the use of Trucopta is sort of rather new. There is a few papers and anecdotal data that shows that in the first few years, there is a drop of levels of Pseudomonas, and then it kind of picks up again. I think we're constantly talking to the KOLs and physicians, and I think from the reach out that we're seeing from patients and what we're hearing from physicians, there probably isn't a dramatic change from the landscape that we've seen to date. Could have delayed it by a few years, but we do see levels which are relatively high, and we do see patients kind of reaching out to get a treatment. But I would just put it with a disclaimer, it's early. You know, probably is delaying the infections, but they do come back from what we're seeing to date.

Thanks. And maybe a big picture question, would love to know some of your early thoughts around the FDA panel in September that's going to take place for another microbiome company. I recognize it's not apples to apples here and you have a different modality with phage, but how do you think listening in and understanding some of these dialogues and feedback for late stage programs could help you progress your pipeline and understanding some of the criteria that the agency is focused on?

So I think there's a lot of emphasis on CMC, and I think that's been a dialogue. The FDA also had, like, separate workshops on phage, which kind of elaborates. So I think there's openness in terms of how do you get a drug approved in terms of the CMC aspects, which look good. And I think there's a good handle, and there's a lot of analogy between microbiome as well as other, you know, other fermented products, right? So I think the field is sort of kind of getting more comfortable when you're seeing the large CDMOs kind of playing a part in it as well. So I think that aspect of the whole CNC is maturing. What I'm hoping in the case of, specifically of phage, there is a discussion on it in general with the microbiome, right? Can you have any surrogate endpoints? Like if you're going after a specific pathogen, C. diff, right, or some other infection, can a reduction of the pathogen be some sort of surrogate for approval? And I think with phage it's even more at least as or even more relevant. There's some evidence that there's talk about it, but I still don't think we're there yet. So we're crossing our fingers because I think as one product will be approved in surrogate endpoint, we'll make everyone's kind of path to approval much faster. So let's hope it goes there. But again, too early to tell.

Got it, thanks. And last question, I know you're guiding to potentially have data late 3Q, and I know the NACFC conference is taking place in November. So do you expect that stage, whether it's from you, from Yale, or others, could be a potential topic at this conference?

I hope so. It's definitely very exciting. I think, you know, sort of the data coming out of Yale, the data that came to UCSD, spectacular publication, right, with 20 patients out of them, 14 with CF, with microbacterium, and it kind of created quite a lot of excitement in the phage field. So, you know, I think we're seeing the whole field maturing, right, where hope will play a big role. And just by the fact that, you know, we're seeing more interest from the KOLs and from patients, right, as well as some movies have been out there and books, you know, kind of hoping that the field is experiencing a renaissance

Great. Thank you, Jonathan.

Pleasure.

Our next question is from Michael Higgins with Ladinburg-Thalman. Please proceed.

Thanks, operator. Good afternoon, guys. Thanks for taking the questions. Looking forward to seeing 004's results in CF next month. I have a question on, a couple questions on BX005, if I could. As you note in the press release, company plans to support a range of activities to continue to move the program forward. more detailed update later this year, hoping you can share with us on the enrollment of the patients, if you consider information by strains in enrollment of patients, and any minimum EZ score that you can share with us. Thanks.

Pleasure, Michael. So, with the topic, we haven't started the study yet. The IND is approved. Kind of goes to Joe's question earlier. Currently, because of the restructuring, we don't want to sort of burden the system with the two projects simultaneously, and CF is our priority. So I think we're still kind of gearing up for when we're going to do the AD study, talking with our partners at Maruhu. What we've seen actually with the cocktail is a very broad host range, so it's less about the strains of staff in these patients But we'll want to make sure, and I think that's been a takeaway and something we want to sort of embed in our current and future clinical programs, is that we want to make sure that there's high enough bacterial burden. So, you know, our thinking is that we sample patients before. We want to make sure that they do have high levels of bacteria. We do make sure that, you know, their strains are susceptible to our phage cocktail. And that kind of gives us the green light to move forward. In terms of design, what we're thinking of, but again, to be finalized, is actually more of the moderate patients to even severe. And that's because the data that we've seen from the UCSD group that went with an approach that reduced that force, that's where they saw both a dramatic reduction of the target bacteria as well as the clinical improvement. So I think these are the patient populations that's probably more interesting. But, again, you know, once we get ready, we'll probably provide more updates.

Appreciate that. And then to turn to 003, the cell paper is really interesting. Page 16 does mention other pages possibly being added, XKP. Any plans to broaden 003?

So, you know, it's a project we really like. I think as we prioritize, 03 is currently not in, you know, in the horizon of the next, you know, 12-plus months. We do have, I mean, we've worked on a broader cocktail to begin with, to your point, right, sort of a broader cocktail that will be ready. And that's driven also by the fact that there's an overlap between basically IBD and what was our BX002 as well as the PSC, right, which is BX003. So that's already a broader cocktail. that we're thinking of. And ideally, what we want to enter is a cost that could be relevant to both indications, so if strains are derived from both sets of patients.

Thanks. And just one follow-up to that. I was reading some interesting comments from Beringer SVP, speaking of the microbiome in psoriasis. using the microbiome as a bit of a screener for the psoriasis flare patients who are enrolling with another program. Is that really the plan here, right, with your patients to enroll in future years to use this more so, use your tech more so as a screener as well as a treatment?

So it's an excellent point. I think you could use it kind of in several situations, right? Our collaboration with Berger Ingelheim is actually about identifying biomarker and using it potentially with one of their therapeutic modalities. So here you have a classic case of the biomarker exactly as you described, right, as a way of identifying those patients that were potentially enrolled that would have a better response and identify patients that don't respond at all. So I think that's one path that we can use in microbiome and there's a lot of evidence on multiple indications, right, about the role of the microbiome's effect on clinical outcome. And to your point, you could use the same approach to identify new targets as well as validate some of our existing targets, right? Like, what would be one that comes to mind? But there are others, right? And there's more and more research that comes out that will probably stratify different, you know, patient groups within indication that you want to pursue, hopefully, with, you know, a different test page. Appreciate that. Thanks, Jonathan. Sorry, Michael.

As a reminder, this is Star 1 on your telephone keypad if you would like to ask a question. Our next question is from Kee Nakai with Chardon. Please proceed. Hello, Mr. Nakai. Your line is live. Please check and see if you have your phone muted.

Can you hear me?

Yes, we can.

Thank you. Jonathan, for BX004, how many sites do you currently have up and running?

Good morning, Ken. We don't disclose publicly the number of sites. It's not a very large study. As you know, we're going for eight patients, but we do have a few sites up and running. It's sort of We were hoping to use these sites, and now they're sort of rolling into the Part 2 to kind of make the transition seamless as we can. But it's definitely a multi-site study that we're pursuing, right, sort of thinking already about the Part 2.

Right. So I guess, you know, as we got to Part 2 with more patients, I was trying to understand how many sites you would have up and running to enroll in.

Yeah, quite a few. You know, we're very honored to have the support of the CF Foundation and their therapeutic development network. So we're trying to go as broad as we can, right? The clock is ticking. We want to move as quickly as we can. So we're sort of balancing, you know, operationally what we can do and making sure the studies are well controlled and well managed. But it is a broad study. It is an orphan indication. But again, it's a very unique patient population that is very connected and communicative. And again, the CF Foundation plays a pivotal role in sort of making sure everything's tied together. So that's been extremely helpful in a multiple site setup.

Okay. That's all I have. Thanks.

Thank you, Kay.

We have reached the end of our question and answer session. I would like to turn the call back over to Jonathan for closing comments.

Thank you. I just want to thank all of you for joining us this morning. We look forward to providing you with future updates on our clinical programs through the rest of the year. Have a wonderful day and please reach out to us if you have any additional questions. Thanks again.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.