This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk02: Greetings. Welcome to Cereva Biologics 2022 Full Year Operational Highlights and Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Chris Calabrese with LifeSci Advisors. Thank you. You may begin.
spk04: Thank you, Operator, and good morning, everyone. Welcome to Cereva Biologics' full year 2022 investor conference call. Leading the call today will be Stephen Shawcross, Chief Executive and Chief Financial Officer of Cereva Biologics. Dr. Manel Cascaio, General Director of Cereva Biologics, European subsidiary, Dr. Frank Tufaro, Chief Operating Officer, and Dr. Vince Wacher, Head of Corporate and Product Development of Cereva Biologics, are also on the call and will be available to answer questions during the Q&A session. Theriva Biologics issued a press release this morning, which provided operational highlights and included the financial results for the full year ending December 31st, 2022. The press release can be found in the investor section of the company website at www.therivabio.com, together with the annual report on Form 10-K for year ended December 31st, 2022, which we plan to file today with the Securities and Exchange Commissioner, SEC. In addition to the phone line, this call is being streamed live via webcast, which will be archived on the company website, www.cerevabio.com, for 90 days. During this call, certain forward-looking statements regarding Cereva Biologics and VCN Biosciences' current expectations and projections about future events will be made. Generally, the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, beliefs, estimates, and similar expressions. These statements are based upon current beliefs, expectations, and assumptions, and are subject to a number of risks and uncertainties, including those set forth in the REBA biologics filings with the SEC, many of which are difficult to predict. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call, and Cereva Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events, or otherwise, except as required by law. With that, I'd like to turn the call over to Steve. Steve?
spk03: Thank you, Chris. Good morning, and I appreciate everyone for taking the time to join us today. During the full year of 2022 and the first few months of 2023, we continue to make significant progress across our oncology folks portfolio. With a cash runway into the third quarter of 2024, we believe we're well positioned to execute on our corporate objectives and reach multiple value enhancing milestones throughout this year. Our lead clinical candidate, BCN01, is a systemically administered oncolytic adenovirus designed to selectively replicate within the tumor, remodel the tumor matrix, and increase tumor immunogenicity. We've dedicated our primary resources to VCN01 and have successfully initiated two clinical trials. VARAGE, our Phase IIb trial for patients with newly diagnosed metastatic pancreatic ductal adenocarcinoma, or PDAC, as well as the investigator-sponsored Phase I trial for patients with brain tumors. We have dosed the first patients, and enrollment is ongoing for both of these newly initiated clinical trials. With these studies, we look forward to building on the growing data that underscore VCN01's differentiated mechanism of action, biological activity, and synergistic clinical benefit observed in combination with standard-of-care chemotherapy. As part of our oncology-focused portfolio, we've also initiated the second cohort of the Phase 1b2a clinical trial of SYN4, which is designed to prevent potentially fatal adverse outcomes in patients who undergo L-genetic hematopoietic cell transplant, HCT, to treat hematologic cancers. In addition, our OB discovery team continues to identify new development candidates to leverage our novel albumin shield technology. This proprietary technology is designed to protect systemically administered oncolytic viruses from the host immune system. We believe the albumin shield technology may facilitate repeated administration of oncolytic virus therapies increasing their efficacy and potentially allowing our pipeline programs to be used in standardized treatment cycles that are well established in cancer chemotherapy. We expect 2023 to be an important year for the advancement of our clinical programs that should continue to position Theriva at the forefront of oncolytic virus development. On today's call, we will provide an update on recent activities and share details on how these programs align with our mission to address unmet needs for difficult-to-treat cancers, starting with our lead program, BCN01. Building on the positive results of our Phase 1 studies, in January 2023, we dosed the first patients in VARAGE, a multinational Phase 2B clinical study evaluating intravenous VCN01 in newly diagnosed PDAC patients treated with first-line standard-of-care chemotherapy, gencytabine and napaxitaxel. The incidence of PDAC continues to rise. And while it is one of the lowest survival or has one of the lowest survival rates among all cancer types, efforts to improve upon the standard of care treatment have largely stalled. We believe VCN01 has the potential to address the urgent need for new treatment options. The VIRAGE is a randomized, controlled, multi-center, open-label, phase 2B trial that is expected to enroll up to 92 adults at approximately 25 sites across the U.S. and Europe. In both the control arm and the treatment arm, patients will receive gencitabine and napaxitaxel standard of care chemotherapy in 28-day cycles. In the treatment arm only, patients will also receive systemically administered VCN01 seven days prior to the first and fourth cycles of gencitabine-napaxitaxel treatment. Primary endpoints for the trial include overall survival and VCN01 safety and tolerability. Additional endpoints include progression-free survival, objective response rate, and measures of biodistribution, VCN01 replication, and immune response. This is an open-label trial. Progress will be monitored very closely, and steps to accelerate the clinical program may be implemented if supported by emerging data. In addition to initiating the VIRAGE pancreatic cancer trial, we continue to refine our clinical strategy in retinoblastoma. Since there's no regulatory guidance for the development of retinoblastoma medicines, We have worked closely with key opinion leaders from well-known treatment centers across the U.S., Europe, Central, and South America to confirm the optimal patient population and treatment line for intravitreal VCN01 to treat vitreous seeds in children with retinoblastoma. We look forward to leveraging the orphan drug designation for VCN01 in this indication to facilitate protocol discussions with the FDA and other regulatory agencies. Complementing our company-sponsored studies, there are several investigator-sponsored studies underway at world-leading oncology research institutions. In collaboration with the University of Leeds, we are evaluating BCNL1 in patients with high-grade brain tumors who are scheduled for surgical resection. In January 2023, we dosed the first patient in the Phase I trial, which will evaluate the ability of BCNL1 to enter brain tumors following systemic administration. Patients with recurrent high-grade primary brain tumors typically have poor prognosis and often undergo one or more surgical interventions to remove their tumors. The leaky vasculature of many brain tumors may provide an excellent opportunity for systemically administered BCNL1 to enter the tumor, where it can replicate and initiate tumor cell killing destroy tumor stroma, and stimulate an antitumor immune response. Successful delivery of VCN01 to brain tumors after systemic administration could provide a more effective and less invasive intervention and potentially transform the way these cancers are treated. Additionally, our investigator-sponsored study, our Phase I clinical study, in collaboration with Hospital of San Diego Sean Dedeo in Barcelona, Spain, is also ongoing. The study is designed to evaluate the safety and tolerability of BCN01 in patients with interocular retinoblastoma refractory to systemic intra-arterial or intravitreal chemotherapy or radiotherapy. Six patients have been treated with BCN01 to date, and the enrollment period has been extended to include additional patients. We plan to hold a meeting with the FDA in 2023 to discuss the clinical development and potential registration pathway for VCN01 as an adjunct to chemotherapy in pediatric patients with advanced retinal glaucoma. In a separate investigator study, we are also exploring the therapeutic potential of VCN01 in combination with Dervalumab for patients with recurrent metastatic squamous cell carcinoma of the head and neck. We are encouraged by the data generated today, highlighted by the acceptable safety profile seen with sequential dosing of VC01 and durabilumab, as well as the biological activity observed in head and neck cancer patients previously treated with NIPDL1 agents. The results obtained today speak to the promise of VCN01 as a potential means of enhancing the efficacy of immunotherapeutic agents in patients whose cancers have been unresponsive to these powerful cancer therapies. We will continue to explore collaboration and partnership opportunities to further advance VCN01 in this setting. and we are also planning to present additional efficacy and survival data from the study in the second half of 2023. In parallel with our clinical studies for VCN1, we are keenly advancing our OV discovery platform in albumin shield technology. Our proprietary albumin shield oncolytic viruses incorporate an albumin binding domain in the virus's outer shell. This is designed to improve systemic delivery by enabling the virus to coat itself with host serum albumin to prevent inactivation by antiviral neutralizing antibodies. We look forward to building upon our foundation of compelling proof of mechanism data generated with VCN01 and VCN11 to develop new albumin shield OVs incorporating additional therapeutic payloads. Finally, Turning to our ongoing phase 1b2a clinical trial of SYN4, or ribaximase, to prevent acute graft-versus-host disease in patients undergoing L-genetic HCT treatment for hematologic cancers. SYN4 is intended to address key limitations of large-spectrum antibiotics, or IV beta-lactam antibiotics, and potentially improve treatment outcomes with this important and widely used class of therapeutics. The Phase 1b-2a study is designed to assess the feasibility of using SYN4 in the specific patient population and to provide key information requested by the FDA regarding the safety and tolerability of SYN4 in patients with impaired intestinal barrier function. The study consists of three sequential cohorts designed to compare different IV beta-lactam antibiotics to treat fever following conditioning therapy. In each cohort, eight patients will receive SYN4 and four will receive placebo. Dosing is now underway for the second cohort, which will evaluate SYN4 in combination with pepracillin and tazobactam. As we reported in September 2022, Progress to the second cohort was permitted by an independent safety monitoring committee after a detailed review of safety and pharmacokinetic data from the first antibiotic cohort administering Maripenem. These data were recently presented at this year's 2023 tandem meetings, transplantation, and cellular therapy meetings of ASTCT and CIBMT. While the data remain blinded, interim analysis suggests that SYN4 is well-tolerated and was not observed in the blood samples of a majority of the available patients. With our collaborators at the Washington University, we plan to continue to explore the therapeutic potential of SYN4 and its ability to reduce serious adverse events in patients with hematologic cancers undergoing allogeneic HCT. Looking ahead, with a focused clinical development portfolio and an expected financial runway into the third quarter of 2024, we are well-positioned to reach potentially transformational inflection points, which include planning to complete enrollment for VERAGE, the Phase II clinical trial of ECN01 and PDEC by early 2024, Holding a pre-IND meeting with the FDA in the second half of 2023 to discuss the clinical development and potential registration pathway for VCN01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. Presenting additional data from the study of VCN01 in combination with Duralumab in patients with recurrent metastatic squamous cell carcinoma of the head and neck in the second half of 2023. In completing the second cohort of our phase 1B2A clinical study of SYN4 for the prevention of acute graft-versus-host disease in bone marrow transplant patients in the first quarter of 2024. Now I'd like to briefly turn to our financial results for the full year ended December 31, 2022. General administrative expenses increased to $9.9 million for the year end December 31, 2022 from $6.5 million for the year ended December 31, 2021. This increase of approximately 50.8% is primarily comprised of increased expense related to the fair value of contingent consideration, higher insurance costs, additional salary and benefits related to new headcount, public relations expense, and VCNO administrative expenses not included in the prior year, offset by a decrease in consulting and legal costs related to the VCN acquisition. If the charge related to stock-based compensation expense was $400,000 for the year ended December 31, 2022, compared to $300,000 for the year ended December 31, 2021. Research and development expenses increased to $11.7 million for the year ended December 31, 2022, from $7.8 million for the year ended December 31, 2021. This increase of approximately 50% is primarily the result of increased clinical trial expenses related to VCN01 not incurred in the prior year, offset by lower clinical and manufacturing expenses related to our Phase 1A clinical trial of SIN20, and expenses related to our Phase 1B-2A clinical trial of SYN4 and L-genetic HCT recipients. We anticipate research and development expense to increase as we continue to enroll in our VARAGE Phase 2 clinical trial of VCN01 and PDAC and our ongoing Phase 1 clinical trial of retinoblastoma, expand GMP manufacturing activities for VCN01, and continue supporting our VCN11 and other preclinical and discovery initiatives. Research and development expenses also include a charge related to non-cash stock-based compensation expense of $112,000 for the year ended December 31, 2022, compared to $76,000 for the year ended December 31, 2021. Other income was $471,000 for the year ended December 31, 2022, compared to other income of $6,000 for the year ended December 31, 2021. Other income for the year ended December 31, 2022 is primarily comprised of interest income of $512,000 offset by an exchange loss of $41,000. Other income for the year ended December 31, 2021 was primarily comprised of interest income. Cash and cash equivalents totaled $41.8 million as of December 31, 2022 compared to $67.3 million as of December 31, 2021. This is expected to provide a runway, as we discussed earlier, into the third quarter of 2024. Following a very strong year where execution allowed us to make tremendous progress in 2022, we have now set the stage for a meaningful 2023. We remain focused on driving our key programs forward and will continue to evaluate strategic opportunities that drive shareholder value and long-term success. With that, we're happy to take some questions.
spk02: 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 your handset before pressing the start keys. Our first question is from James Beloy with Alliance Global. Please proceed.
spk05: Hey, guys. Thank you very much for taking the questions. I had a question on the head and neck squamous cell. We've been participating in data second half 2023 and look at that phase one. investigative sponsored trial. Could you walk through sort of expectations of what we should be looking for and any thoughts on what the number of patients might be treated at that point?
spk03: Sure. I'll let Manel take that question. There are 20 patients in that study. Manel, you want to give an overview of the design and what we could expect to see when that efficacy and survival data come out?
spk01: Exactly. Yes, this trial was started in 2018, and the design included two different cohorts, where we combined our product with Durvolumab, which is an anti-PD-L1 antibody, after failure of the patients of head and neck carcinoma to previous lines of anti-PD-L1 therapy. Basically, the main goal of the trial, obviously, to evaluate the safety and durability of the combination, but also to evaluate if the treatment with BCNL1 was able to overcome previous resistance to PD-1 antibody. We published it last year in ESMO meeting in Paris. All the data related to the safety of the trial, which has demonstrated to be very mild, and we can also at the highest dose when combining sequentially our product with anti-PD-L1. And at ESMO, we also disclosed all the biological data obtained from this trial, where we have demonstrated the replication capability of the virus, but also the capability of the virus to shift the immunological environment of these tumors to express more immunologically sustained markers that warrant eventual better prognosis. We are collecting right now the survival data. That's going to be interesting data because we have seen interesting things. And we expect to present this data probably at ESMO in 2023, that it's going to be in the last part of September of 2023. It's an international meeting. It's going to be held in Madrid, in Spain. So we expect to do a release at that point of all the survivability data that we have at that point. I promise it's going to be interesting.
spk06: Excellent. I think you mentioned... Ketruda as well? Any updates on Gombion and Finzi?
spk05: Yes, I'm sorry. I believe in the past you'd spoken about trying a combination with Ketruda as well in this patient population. Is that something that's
spk01: Well, that definitely is something that we could evaluate. We have already data combining with an anti-PD-L1, K2, and anti-PD-1 antibody. And obviously, we are evaluating based on the results that we obtained from this trial, and when we have a better understanding of the final conclusions, we are evaluating different possibilities to move this problem ahead. And obviously, the combination with anti-PD-1 antibodies could be an option, yes.
spk05: Great, thank you. And then maybe a last question on the PDAC trial. Can you walk through how the, I believe, Stephen, you said you anticipate an enrollment completing first half of 24, and what should we anticipate there in that interim look in late 23?
spk03: So maybe I'll start this one off. So based on our projections, we expect to have the trial enrolled by early 2024. But as you recall, the study design is quite creative. Although it's a controlled study, it's also open label. And as we all know from the eyes of the regulators, overall survivability is absolutely the most important endpoint. However, we're gonna have the ability to look at response rates real time for the patients enrolled in this trial. And the expectation is that sometime by the end of this year, we hope to have enough patients enrolled and have collected enough data for us to get a good indication of whether or not we're observing the same types of response rates that we saw in our phase one study. If the data look very compelling, then we'll have options to go back and talk to the regulatory authorities to figure out how we could advance this trial much more rapidly. And there are a lot of options on the table which could possibly include converting this to a pivotal or possibly even making it a registration trial with additional data monitoring, you know, on the back end. I mean, all those are on the table. It's ultimately going to come down to the data.
spk06: Okay.
spk05: I'll do the last question. On VCN11, the next gen optimized for IV administration, can you walk through the time and expectations for VCN11, please?
spk03: Yeah, maybe, Manel, you could take that as well and discuss, you know, we're kind of not only evaluating VC11, but sort of our other product candidates, VCN12 and 13, as we not only advance that program, but look for opportunities to further enhance the payloads of the viruses for additional therapeutic benefits.
spk01: Yes. So basically, as probably you remember, we discussed the APD technology. It's in fact a platform technology that we can apply to different products. And that's what we are doing right now. So our scientists are very actively right now working in different payloads, evaluating what's the best combination of genetic modifications that the product can, let's say, incorporate to have additional properties. We know very well that the BCN11 can be perfectly redosed after systemic administration, after our data in different systemic administration models in animals. And that's really, really encouraging data because that's something that has not been described never before for other adenoviruses. But we are seeing if that probably we can even incorporate additional properties to the virus to really be much more active in the antitumoral milieu. So that's why we have not only BCN11, as indicated by Steve, but different candidates that we are evaluating in parallel. And that's why our recommendation right now is that we probably are going to have a final decision of what's the candidate we are going to move into the clinic during this year. Yeah.
spk06: Great. Thank you for taking the questions.
spk02: We have reached the end of our question and answer session. I would like to turn the conference back over to Steve for closing comments.
spk03: Thank you, Sherry. And thank you to everyone for taking the time to join us today. We remain very deeply committed to improving patient outcomes for these very hard to treat cancers, and we look forward to providing updates on our progress as we continue forward. Once again, I'd like to thank our shareholders, the entire team, and the many people who have supported us along the way, including our patients, their families. Once again, thank you for joining us today and we look forward to future updates.
spk02: Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.
Disclaimer