BiomX Inc.

Good morning, and welcome to the Biomix Full Year 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 Biomix. Please go ahead.

Thank you, and welcome to the Biomix 2022 Financial Results and Corporate Update Conference Call. The news release became available just after 6.30 a.m. ET 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 in 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 to close on the second part of the PIPE transaction, and the potential safety, efficacy, and other benefits of our product candidates. 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 booking statements, are outlined in today's press release, which, as noted earlier, is on our website. Joining me on the call this morning is Jonathan Salomon, Chief Executive Officer of Biomics. With that, I will turn the call over to Jonathan.

Thank you, Marina, and good morning, everyone. 2023 is shaping up to be a very exciting year for our company. our Cystic Fibrosis Program with lead candidate BX004 continues to gain momentum based on the positive results announced back in late February in Part 1 of our ongoing Phase 1 B2A study. Without question, this was a watershed moment for our company and for our technology, as these results demonstrated that an optimized phage cocktail product developed utilizing a bulk platform such as BX004 could potentially reduce the presence of life-threatening bacteria in the lungs of CF patients after a short period of treatment. The Part I results also represented the first placebo-controlled study evaluating a cocktail-based phage product to show notable reductions in bacterial burden in cystic fibrosis patients. As a reminder, BX004 is a phage cocktail that has been designed to combat chronic pulmonary infections caused by pseudomonas argininosus, or PSA, which is a main contributor to morbidity and mortality in CF patients. Despite the availability of CFTR-directed therapies, CF patients continue to suffer from intractable persistent infections, such as those caused by PR-genosa. New treatment options are therefore needed to address the significant unmet need that impacts thousands of CF patients each year. Our ongoing Phase I B2A trial is comprised of two parts. Part one desired the safety, pharmacokinetics, and microbiologic activity of BX004 in nine CF patients in a single ascending dose and multiple dose design. On February 22nd, we reported these exciting results and also held a conference call with investors to review the data. For today's call, I plan on providing a high-level overview of the overall study results. However, a more detailed presentation of our data can be accessed on the Biomics website under our Industrial Relations, News Events sections. Part 2 of the trial will evaluate the safety and efficacy of BX004 in a larger group of patients with 16 patients receiving nebulized BX004 therapy and 8 receiving placebo in a 2-to-1 randomization. Importantly, treatment duration will be extended over a 10-day period with twice-daily administration of the high dose versus the seven-day period of escalating doses in Part 1. We have already started dosing patients in Part 2 of the study, and we remain on track to report results in the third quarter of this year. I'd now like to briefly recap the exciting results in Part 1 of our CF study. The primary goal of Part 1 was to assess the safety and tolerability of BX004. Bage therapies are generally considered safe, And that proved to be the case with BX004, maintaining an excellent safety profile throughout the course of treatment. However, we're also highly encouraged to see preliminary evidence of efficacy in patients treated with BX004, despite the small sample size and short duration of treatment during this first part of the trial. At day 15, patients treated with BX004 had a mean reduction in PSA colony forming units, or CFUs, compared to baseline of 1.42 log. while the mean reduction of PSA CFUs was only 0.48 log for placebo-treated patients. As noted on our conference call last month, we were surprised by the magnitude of reduction in material load, and these results exceeded our internal expectations, particularly considering the shorter course of treatment of just seven days of escalating dose. Not surprising, the X004 maintained an excellent safety and tolerability profile with no treatment-related adverse effects observed in the study. Phage-based treatments are generally regarded as safe, and results from the study serve to reinforce this view, providing us with additional comfort that BX004 can be administered at a higher dose and over a longer treatment period, as specified in Part 2 of the CF study. Phage were detectable in several BX004-treated patients up to day 15, or one week after the end of the seven-day treatment period. and there's no emerging resistance to BX004 during or after treatment. As expected, there was no change in lung function as measured by FEV1, which we attribute to the shorter course of therapy specified in part one of the study. In summary, we believe BX004 is emerging as one of the most promising development stage therapies for treatment of chronic PSA infections in patients with cystic fibrosis. In canvassing both the development stage landscape and the compassionate use program, BX004 appears to be highly competitive with respect to a number of key product attributes, including safety, tolerability, and reducing pathogenic bacteria. In addition, we also believe BX004 to be further differentiated from its potential to address resistance strain with BSA, given its unique design to confer orthogonal-based coverage across pathogenic strains. I'd now like to turn the call over to Marina to review our financial results for the full year 2022.

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-K, which will be filed later today. I will walk you through some of our brief highlights. As of December 31, 2022, cash balance and short-term deposits were $34.3 million compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities. R&D expenses net were $16.2 million, down from $22.7 million for the previous year, mainly because of reduced salaries, stock-based compensation, and workforce reduction, resulting from corporate restructuring. Additionally, the decrease was a result of discontinuing, pausing, and delaying the development of several programs. General and administrative expenses were $9.5 million for 2022 compared to $11.3 million for the prior year. The decrease was primarily due to a decrease in salaries and related expenses and stock-based compensation due to reduction in workforce, as well as a decrease in recruitment and employee-related expenses, all resulting from corporate restructuring. Net loss for 2022 was $28.3 million compared to $36.2 million for the prior year. Net cash used in operating activities for 2022 was $29.1 million compared to $27.6 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 through at least middle of 2024. And now, I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

Thank you, Marina. As I mentioned at the beginning of today's call, I believe Biomics has posed for an outstanding 2023. Despite continued challenges in the capital markets, we are well-positioned based on potentially best-in-class BX004 product candidates in CF, a strong balance sheet, and support from our current investors, including the Sisyphus Fibrosis Foundation. Immediately following the release of Part 1 data, Biomics was also able to raise additional capital from our existing shareholders. We very much value and appreciate the support. as these additional funds reflect the growing optimism surrounding our BX004 program. In our view, funding remains viable for those companies with product candidates that can demonstrate robust clinical data, leading to best-in-class potential. We believe BX004 clearly fits this profile. We couldn't be more pleased with the progress we continue to make in bringing this potentially life-saving therapy to CF patients. We look forward to reporting our Part 2 results in the third quarter of this year. With that, Marina and I would be happy to take any of your questions. Operator?

Thank you. We will now be conducting a 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 your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your questions. Our first questions come from the line of Joe Pangenis with HC Wainwright. Please proceed with your questions.

Hey there, Jonathan and Marina. Thanks for taking the question. So first, a quick question on the Part 1 data. Just curious. You know, as we're moving into Part 2, will we be receiving any longer-term follow-up from the Part 1 patients?

Hi, Joe, and good morning. There is a bit more data that will come out in Part 1, analyzing some of the samples and the follow-ups. We are planning to present a conference or a paper, so once we have kind of, you know, confirmation on that, we'll give you guidance on it.

Got it, got it. And then I guess a little bit of nuance and impact of Part 1 on the Part 2 data, or I'm sorry, the Part 2 section of the study. So first, following the announcement of these data, is there any feedback you can provide as to impact on, say, Part 2 enrollment kinetics? and as well as, you know, any additional interest by new physicians for Part 2, and do any of the physicians require any additional training or education to conduct Part 2 relative to Part 1?

Joe, it's an excellent question. I mean, there is quite a lot of excitement sharing it with the PIs, you know, our supporters at the CF Foundation with the state. It's quite dramatic. As we said, right, we weren't expecting this level of bacteria reduction in the quality of the data that we've seen in part one, which was basically an initial safety study. So it definitely took us by surprise, a pleasant surprise that is. It is helping with communication. I think there's a lot more PIs that are excited, patients as well. I want to be conservative, and I think we're keeping the same guidance that we provided in the past, but things are definitely on track, a lot more incoming, and also bear in mind that the part two is sort of not as intense on the patients. They're not required to come in every day, so there's definitely, we get the sense that there's more comfort, there's more excitement with participating in a part two.

Oh, that's really helpful, and then maybe just one last checkbox question, if you don't mind. Just making sure about the manufacturing status for 004 for not only part two, but steps beyond.

Yeah, so, you know, it's a question we spent some time talking, right? And I think it's still kind of paying dividends, the decision we took two years to kind of put everything in-house. So it's looking good. It's all under our control. And, you know, pretty straightforward. The cocktail sort of was optimized, among other parameters, for relative ease of manufacturing. So we do feel, you know, very confident with supplies through the part two. And now I'm kind of starting to think about, you know, pivotal studies and requirement, you know, the GMP requirement for pivotal studies. So that's some of the work that we're now starting to do. Got it. Thank you. Ben, pleasure.

Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next questions come from the line of Michael Higgins with Lattenberg Thalman. Please proceed with your questions.

Good morning. This is Farhana on behalf of Michael. Congrats on the quarter. We have two questions. The first one relates to part two. I think Jonathan, you had mentioned when the part one results came that they could provide some, like could generate some changes to part two. So we were just wondering if any changes were made yet. And the second question is what is the guidance on BX003? Thank you.

Sure. So pleasure and good morning. I think as you noted, The data in Part 1 is much more dramatic than we anticipated in the initial study, so we are seeing the effect kind of earlier in a greater magnitude than one would expect. We're currently proceeding with Part 2 as planned. The team is thinking, consulting obviously with partners of the CF Foundation and KOLs to think whether there's any additions, whether there's anything addition we can learn in Part 2. And I think once that's formal, if there's any updates, we'll provide them, but nothing so far. And then to your question about BX003, as we've guided, I think we want to be very conservative. I think we've seen kind of the market still not in a good shape, and so we want to kind of make sure we're putting all the efforts into the CF program and make sure we got a good handle on the Part 2 and kind of thinking already about a pivotal study after that. Once that's solidified, we see where the market is, I think then we'll provide guidance on BXL03.

Thank you.

You bet. Pleasure. Thank you. There are no further questions at this time. I would now like to hand the call back over to Jonathan Solomon for any closing remarks.

Sure. So, everyone, thank you again for joining us this morning. We look forward to providing you future updates on our clinical programs here. Have a wonderful day, and please feel free to reach out to us with any additional questions. Thanks again.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.