Theriva Biologics, Inc.

Greetings and welcome to the Theriva Biologics 2023 First Quarter Operational Highlights and Financial Results. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Calabrese of LifeSciAdvisors. Thank you, Chris. You may begin.

Thank you, Operator, and good morning, everyone. Welcome to Theriva Biologics' first quarter 2023 investor conference call. Leading the call today will be Stephen Shawcross, Chief Executive and Chief Financial Officer of Theriva Biologics. Dr. Manel Cascaio, General Director of Theriva Biologics, European subsidiary, and Dr. Vince Wachir, Head of Corporate and Product Development of Theriva Biologics, are also on the call and will be available to answer questions during the Q&A session. The REVA Biologics issued a press release this morning, which provided operational highlights and included financial results for the first quarter ending March 31st, 2023. The press release can be found in the investor section of the company website at www.therevabio.com, together with the quarterly report on Form 10-Q for the quarter-ended March 31st, 2023, which we plan to file today with the Securities and Exchange Commission, or 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 the 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, believes, 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 Cereva 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 Theriva 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? Thanks, Chris, and good morning. I appreciate everyone taking the time to join us today. I'd like to begin by reiterating our deep commitment to advancing our organization in addressing unmet needs for difficult to treat cancers. In the first few months of 2023, we continue to make steady progress across our Oncology folks portfolio and remain on track to reach multiple value enhancing milestones. With cash runway into the third quarter of 2024, we believe we're well positioned to execute on our corporate objectives. As a reminder, our lead clinical candidate, VCN01, is a systemically administered oncolytic adenovirus designed to selectively replicate within the tumor, degrade the tumor matrix, and increase tumor immunogenicity. We believe these features position VCN01 for use in multiple indications in combination with multiple different types of therapies, providing multiple mechanisms of tumor killings. Building on strong Phase I clinical data, we are advancing VARAGE, our Phase IIb trial for patients with newly diagnosed metastatic pancreatic ductal adenocarcinoma, or PDAC, and we are pleased with the progress to date. Enrollment and dosing are also underway for the Phase I trial of BCN01 in patients with brain tumors And we're preparing to engage with regulatory agencies to discuss the development and potential registration pathway for VCN01 as an adjunct to chemotherapy in pediatric patients with advanced retinal blastoma. As part of our oncology-focused portfolio, in addition to exploring the potential clinical benefits of VCN01 and different solid tumor indications, we continue to screen patients and enroll them in the second cohort of the Phase 1b2a clinical trial of SYN4, which we expect to complete in the first quarter of 2024. As a reminder, SYN4 is designed to prevent potentially fatal outcomes in patients who undergo L-genetic hematopoietic cell transplant, HCT, to treat hematologic cancers. In parallel, we've taken important steps to identify new candidates through our OV discovery platform, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate repeated administration of oncolytic virus therapies, thus increasing their efficacy and potentially allowing our pipeline programs to be used in standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy. With this brief introduction, I will now provide an update on recent activities and share details on how these programs continue to position Theriva at the forefront of oncolytic virus development, starting with our lead program, BCN01. It is well known that PDAC has one of the lowest survival rates among all cancers, and despite the growing incidence, efforts to improve upon the standard of care chemotherapy treatments have largely stalled. We believe BCN01 has the potential to address the urgent need for new treatment options for patients with PDAC. Enrollment and dosing are underway and barrage the multinational Phase IIb clinical study evaluating intravenous VCN01 in newly diagnosed PDAC patients treated with first-line standard-of-care chemotherapy, gencitabine, and napaxitaxel. The trial is expected to enroll up to 92 adults at up to 25 sites across the U.S. and Europe. We are encouraged by the enrollment to date, which is a testament to both the engagement of our clinical trial sites and the intense commitment of our experienced clinical team. In both the control arm and 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 and 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. Since 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 VARAGE-PDAC trial, We continue to work closely with key opinionators to refine our clinical strategy in retinoblastoma. We believe intravitreal BCN01 has the potential to treat vitreous seeds in children with retinoblastoma, and we also look forward to leveraging our orphan drug designation in this indication to facilitate protocol discussions with the FDA and other regulatory agencies. Since current clinical practice varies and there is no regulatory guidance specific to retinal blood stoma drug development, we are working with our key opinion leaders in the US, Europe, and Central and South America to develop new potential treatment options for this difficult to treat cancer. In parallel with company sponsored studies, The potential utility of VCN01 is being explored in a number of investigator-sponsored studies that are underway in leading oncology research institutions around the world. In collaboration with the University of Leeds, we are evaluating intravenous VCN01 in patients with high-grade brain tumors who are scheduled for surgical resection. This Phase I trial is designed to evaluate the ability of VCN01 to enter brain tumors following systemic administrations. The leaky vasculature of many brain tumors may provide an excellent opportunity for systemically administered VCNL1 to enter the tumor where it may replicate and initiate tumor cell killing, destroy tumor stroma, and stimulate an anti-tumor immune response. Successful systemic delivery of VCNL1 to brain tumors could provide a less invasive intervention and potentially transform the way these cancers are treated. The Leeds investigators have initiated dosing and are exploring protocol refinements that may expand enrollment. Additionally, enrollment in the Phase I clinical study in collaboration with Hospital San Juan de Deo in Barcelona, Spain, has been extended to additional patients. The study is designed to evaluate the safety and tolerability of ECN01 in patients with interocular retinoblastoma refractory disease to systemic interarterial or intravitreal chemotherapy or radiotherapy. We plan to hold a 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. A separate investigator-sponsored study is 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 VCN01 and Dervalumab, as well as biological activity observed in head and neck cancer patients who failed multiple previous lines of therapy including treatment with NIPD1 and PD-L1 agents. We are planning to present additional efficacy and survival data from the study in the second half of 2023, and we will continue to explore collaboration and partnering opportunities to advance VCN01 in this indication. The potential to enable the use of immune checkpoint inhibitors in refractory or in insensitive cancer patients is a particularly compelling goal of VCN01 that may have valuable utility, and a range of cancer indications. Turning to our ongoing phase 1b2a clinical trial, SYN4, or abaxamase, to prevent acute graft-versus-host disease, or AGVHD, in patients undergoing L-genetic ACT treatment for hematologic cancers. SYN4 is intended to address key limitations of broad-spectrum antibiotics, or IV beta-lactam antibiotics, and potentially improve treatment outcomes with this important and widely used class of therapeutics. The PASE 1b2a study is designed to assess the feasibility of using SYN4 in this 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. As a reminder, 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 were received SYN4 and four were received placebo. Data from the first cohort were recently presented in April at the 33rd European Congress of Clinical Microbiology Infectious Disease. 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. Building on these results, our second cohort is underway and is designed to evaluate SYN4 in combination with purposilin and tazobactam. This cohort will provide important additional safety information, in particular, whether oral SYN4 has the potential to alter IV antibiotic levels in this patient population. With our collaborators at Washington University, we continue to explore the potential of SYN4 to reduce potentially fatal adverse events related to IV antibiotic use in L-genetic HCT recipients, including AGVHD, and overgrowth and infection by pathological organisms such as C. difficile and vancomycin-resistant Teroxacin. We are pleased with the progress of our clinical programs and, in parallel, continue to identify new candidates through our OV platforms. Our proprietary technologies have tremendous potential for our pipeline, and we look forward to building upon our foundation of compelling proof-of-mechanism data generated with VCN01 and VCN11 to develop new albumin shield candidates, incorporating additional therapeutic payloads. Overall, I'm confident that the company's strong cash position and upcoming catalysts will provide a solid foundation for execution and value creation. We remain focused on driving our clinical programs forward and exploring opportunities to expand our pipeline through our OB discovery platform. We remain on track to complete enrollment for VIRAGE by early 2024, hold 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, present additional data from the study of BCN01 in combination with duralumab in patients with recurrent metastatic squamous cell carcinoma of the head and neck in the second half of 2023, and complete 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 first quarter ended March 31, 2023. General and administrative expenses increased to $2.2 million for the three months ended March 31, 2023 from $1.7 million for the three months ended March 31, 2022. This increase of 29% is primarily comprised of increased expense related to the fair value of the contingent consideration, additional salary and benefits related to new headcount, Audit fees, consulting fees, travel, and VC and administrative expenses not included in the prior year offset by a decrease in consulting and legal costs related to the VCN acquisition. The charge related to SOC-based compensation expense was $87,000 for the three months ended March 31, 2023, compared to $85,000 for the three months ended March 31, 2022. Research and development expenses increased to $3 million for the three months ended March 31, 2023, from approximately $2.6 million for the three months ended March 31, 2022. This increase of 15% is primarily the result of increased clinical trial expenses related to VCN01 not incurred in the prior year, offset by lower expenses related to our Phase 1b2a clinical trial of CIN4 and L-genetic HCT recipients, and decreased manufacturing expenses related to our Phase IA clinical trial of CIN20. We anticipate research and development expense to increase as we continue enrollment in our VERAGE Phase II clinical trial of VCN01 in PDAC and our ongoing Phase I clinical trial in retinal osoma, expand GMP manufacturing activities for VCN01, and continue supporting our VCN11 and other preclinical and discovery initiatives. The charge related to stock-based compensation expense was $39,000 for the three months ended March 31, 2023 compared to $28,000 for the stock-based compensation expense for the three months ended March 31, 2022. Other income was $370,000 for the three months ended March 31, 2023 compared to other expense of $21,000 for the three months ended March 31, 2022. Other income for the three months And in March 31, 2023 is primarily comprised of interest income of $364,000 in exchange gain of $6,000. Other expense for the three months ended March 31, 2022 is primarily comprised of an exchange loss of $23,000 offset by interest income of $2,000. Cash and cash equivalents totaled $36.1 million as of March 31, 2023, compared to $41.8 million as of December 31, 2022. We remain deeply committed to improving patient outcomes for these very hard to treat cancers. And before we conclude today's call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to delivering on our mission. I'd also like to thank the entire three of the team, our investors, and the many people who have been supportive along the way, including our patients and their families. With that, we're happy to take some questions.