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spk06: Greetings, and welcome to the Cereva Biologics Inc. 2023 Third 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 then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Shelcross. Thank you. You may begin.
spk01: Thank you, Irene, and good morning, everyone, and thank you for joining our call today. Welcome to Threva Biologics' third quarter 2023 investor conference call. Joining me on today's call will be Dr. Manal Kaskal, Director General of Threva Biologics, European subsidiary, and Dr. Vince Wager, Head of Corporate and Product Development of Threva Biologics. Theriva Biologics issued a press release this morning, which provided operational highlights and included the financial results for the third quarter ended September 30, 2023. The press release can be found in the investor section of the company website at www.therivabio.com, together with the quarterly report on Form 10-Q for the quarter ended September 30, 2023, which we plan to file today with the Securities and Exchange Commission. In addition to the phone line, this call is being streamed live via webcast, which will be archived on the company's website, www.thrivabio.com, for 90 days. During this call, certain forward-looking statements regarding Thriva 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 three of a biologic's 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 three of a biologic 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 start by discussing our progress during the quarter. In the third quarter of 2023, we continue to make steady progress to drive forward our oncology-focused portfolio designed to address unmet needs for difficult-to-treat cancers. With our extended cash runway into the first quarter of 2025, we believe we're well positioned to execute on our corporate objectives and remain on track to achieving multiple value-enhancing milestones. Our primary efforts and resources are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate, VCN01. As a reminder, 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 multiple modes of action position VCN01 for optimized tumor killing across several indications and in combination with different types of therapies. The potential use of VCN01 to enable and enhance the use of chemotherapy and immune oncology products and otherwise refractory solid tumors is a strategic focus for Threva that may provide multiple opportunities in areas of high therapeutic need. Today, I'm pleased to report recent highlights from our ongoing programs evaluating BCN01 in different indications in combination with chemotherapy, immune checkpoint inhibitors, and CAR-T cells. Building on our exploration of the potentially broad synergistic clinical benefit of BCN01, we are pursuing new oncolytic virus candidates to leverage our novel albumin shield technology, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate repeated administration of oncolytic virus therapies. This may enable our pipeline programs to be used in standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy. Additionally, as part of our oncology-focused portfolio, We continue to screen and enroll patients in the second cohort of the Phase 1b-2a clinical trial of SYN4, designed to prevent potentially fatal adverse outcomes in patients who undergo L-genic hematopoietic cell transplant, or HCT, to treat hematologic cancers. With this brief introduction, I will now provide further details on how these programs continue to position Theriva at the forefront of oncolytic virus development starting with our lead program, VCN01. Our confidence in VCN01 is built on a strong clinical foundation as VCN01 has been administered to more than 100 patients across diverse indications, including pancreatic ductal adenocarcinoma, or PDAC, head and neck squamous cell carcinoma, colorectal cancer, ovarian cancer, and retinoblastoma. BCN01 has been granted orphan drug designation in the U.S. and Europe for the treatment of pancreatic cancer and in the U.S. for retinoblastoma, providing additional opportunities for regulatory engagement and, if approved, market exclusivity. Our most advanced program for BCN01 is in PDAC, which has one of the lowest survival rates among all cancers and is an indication that it's ripe for innovation. It is well established that the PDAC tumor matrix is one of the key reasons for the overall poor therapeutic outcomes for these patients. We believe BCN01 has the potential to address the urgent need for new treatment options for patients with PDAC by degrading the tumor matrix and increasing tumor access by co-administered cancer therapies. VARAGE, our Phase 2B trial of VCN01 in combination with standard-of-care chemotherapy, gencitabine, and napaxitaxel, as a first-line therapy for patients with PDAC, continues to advance with dosing well underway across sites in the U.S. and Spain. VCN01 has been well-tolerated with a safety profile consistent with prior clinical trials. We remain on track to complete enrollment with 92 available patients in the first half of 2024. As a reminder, the primary endpoints for the trial include overall survival and VCN01 safety and tolerability. Additional endpoints include progression pre-survival, objective response rate, and measures of VCN01 biodistribution, 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. More broadly, the VARACH trial will enable us to determine the feasibility of repeated dosing of ECN01, which could shift the paradigm to standardized treatment cycles that are well-established in cancer chemotherapy and immunotherapy and may lead to improved clinical outcomes for patients with PDAC and other solid tumors. In addition to advancing the VARAGE PDAC trial, we continue to work closely with key opinion leaders in the US, Europe, Central and South America to refine our clinical strategy in retinoblastoma. Since current clinical practice varies and there's no regulatory guidance specific to retinoblastoma drug development, we have submitted our meeting request with regulatory agencies and look forward to discussing the development pathway for VCN01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. We believe intravitreal VCNL1 has the potential to treat vitreous seeds in children with retinoblastoma, and we look forward to leveraging our orphan drug designation in this indication to facilitate protocol discussions with the FDA and other regulatory agencies to enable the development of new potential treatment options for those difficult to treat cancer. In parallel with company-sponsored studies, the potential utility of ECN01 is being explored in a number of investigator-sponsored studies that are underway at leading oncology research institutions around the world. Today, I'll focus on recent updates from our collaboration with the Caniline Institute of Oncology, or ICO, for patients with head and neck cancer, and the University of Pennsylvania for patients with pancreatic and ovarian cancer. Data from the ongoing study of BCN01 in combination with Duralumab in patients with recurrent metastatic head and neck cancer were recently presented at the European Society for Medical Oncology Annual Congress, or ESMO. Results showed enhanced patient survival up to almost four years in one patient, which correlated with BCN01-mediated increases in CPS score a key determinant of outcomes with anti-PD-L1 checkpoint inhibitor therapies. These data are remarkable, given these patients had all failed prior lines of anti-PD-L1 treatment. In addition to the presentation at ESMO, we hosted a virtual KOL event featuring Dr. Ricard Moussaieb de Aiko. In addition to reviewing key takeaways from the ESMO poster presentation, Dr. Moussaieb discussed the unmet medical needs in head and neck cancer, current treatment limitations, and the therapeutic potential of VCN01. Dr. Maceo also highlighted data from the ICO Phase I study showing that VCN01-treated patients had improved responses to later lines of therapy. This is consistent with VCN01's matrix-degrading effect, which enables better access by the codes administered cancer therapies and the potential to elicit an extended anti-tumor immune response. Consistent with these clinical data, a significant increase in the infiltration of tumors with anti-PD-LN1-positive immune cells was observed, which statistically correlated with patient survival. Additionally, the University of Pennsylvania continues to enroll and treat patients in their Phase I investigator-sponsored study administering VCN01 with Heukarty mesocells to patients with ovarian and pancreatic cancers. VCN01 is designed to increase tumor immunogenicity and improve access by additional therapies such as Heukarty mesocells. While cell-based immunotherapies have had limited efficacy against solid tumors to date, we are encouraged by the initial results highlighting the feasibility of administering VCNL1 with UCAR-T mesocells. These preliminary results were recently presented at the Society for Immunotherapy of Cancer Annual Meeting, or CITC. With no dose-limiting toxicities observed today, the study will continue to explore higher doses of VCNL1 co-administered with UCAR-T mesocells. We look forward to further data from the study to determine if eCN01 can improve patient outcomes with these powerful immunotherapies to treat solid tumors. Turning to our ongoing phase 1B2A clinical trial at Washington University, evaluating SYN4 or riboxamase to reduce potentially fatal adverse events related to IV beta-lactam antibiotic use in L-genetic HCT recipients, including acute graft-versus-host disease, or AGVHD, and overgrowth and infection by pathological organisms such as C. difficile and vancomycin-resistant enterococcin. The Phase 1 B2A study is designed to assess the feasibility of using SYN4 and consists of three sequential cohorts comparing different IV beta-lactam antibiotics following conditioning therapy. In each cohort, eight patients will receive SYN4 and four will receive placebo. 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. Our second cohort is underway and is designed to evaluate SYN4 in combination with peperacillin and tezobactam. 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. Overall, we're encouraged by the progress across our pipeline and the growing clinical data that underscore the promise of our systemically administered oncolytic adenovirus in key indications and combinations. We remain focused on driving our clinical programs forward and exploring opportunities to leverage our novel Amblyumin Shield technology and exciting additional technology from our OV discovery platform. I'm confident that the company's strong cash position and upcoming catalysts provide a solid foundation for execution and value creation. We remain on track to complete enrollment for Verage in the first half of 2024, meet with the FDA to discuss the clinical program and potential registration pathway for BCN01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma before the end of the year, and complete enrollment in the second cohort of our Phase 1B28 clinical study of SYN4 for the prevention of ADHD and bone marrow transplant patients in the first half of 2024. Now, I'd like to briefly turn to our financial results for the third quarter ended September 30, 2023. General administrative expenses decreased to $212,000 for the three months ended September 30, 2023 from $2.4 million for the three months ended September 30, 2022. This decrease of 91% is primarily comprised of the decrease in the fair value of contingent consideration of $1.6 million, along with lower salary and bonus costs, investor relation fees, audit fees, travel, and VC and administrative expenses not included in the prior year, offset by an increase in consulting fees. The charge-related stock-based compensation expense was $95,000 for the three months ended September 30, 2023, compared to $93,000 for the three months ended September 30, 2022. Research and development expenses increased to $4 million for the three months ended September 30, 2023, from approximately $2.6 million for the three months ended September 30, 2022. This increase of 56% is primarily the result of higher clinical trial expenses related to our VERAGE Phase 2 clinical trial of VCN01 and PDAC, offset by decreased expenses related to our Phase 1B2A clinical trial of SIN4 and LGA ACT recipients, Phase 1A clinical trial of SIN20, and decreased manufacturing expenses related to our Phase 1A clinical trial of SIN20. We anticipate research and development expense to increase as we continue enrollment in our VARAGE Phase II clinical trial of VCN01 and PDAC and our ongoing Phase I clinical trial in retinoblastoma, 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 $40,000 for the three months ended September 30, 2023, compared to $28,000 related stock-based compensation expense for the three months ended September 30, 2022. Other income was $388,000 for the three months ended September 30, 2023, compared to other income of $161,000 for three months ended September 30, 2022. Other income for the three months ended September 30, 2023 is primarily comprised of interest income of $382,000 and an exchange gain of $6,000. Other income for the three months ended up September 30, 2022 is primarily comprised of interest income of $170,000 offset by an exchange loss of $9,000. In a further strengthening of our balance sheet during the quarter ended September 30, 2023, we recognized a $1.4 million tax credit receivable and offsetting deferred R&D tax credit It's a result of our participation in a research and development program sponsored by the Spanish government. The program provides for reimbursement of certain expenses incurred in research and development efforts that we incurred in Spain. As a condition for participation in the program, we will be required to maintain certain workforce levels in research and develop expenditures over the next 24-month period. Beginning in Q1 2024, The deferred R&D credit will be amortized monthly as a contract expense during 2024 and 2025. We expect to receive the full cash payment under this program by the end of 2024. Cash and cash equivalents total $31.2 million as of September 30, 2023, compared to $41.8 million as of December 30, 2022. We remain deeply committed to improving patient outcomes through 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 developing and delivering on our mission. I'd 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 a few questions.
spk05: Thank you. We will now be conducting a question and answer session.
spk06: If you would like to ask a question, please press star and then one on your telephone keypad. The confirmation turn will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. For participants using speaker equipment, May be necessary to pick up your handset before pushing the star keys.
spk05: One moment, please, while we call for questions. The first question we have is from James Malloy of Alliance Global Partners. Please go ahead.
spk02: Hey, good morning. Thank you for taking my questions. I had a question on expectations for the Phase 2B virage, the PDAC. I know that you expect to complete first half 24. Is that the enrollment completed for SF-24? When should we anticipate sort of final data? And what are expectations for next steps for that trial? Is that something that should the data look good enough to potentially go to the FDA and be talking about registration? Or do you think you need an additional trial regardless and they'll talk to the FDA about that?
spk01: Right. So thanks for the question, Jim. A couple points here. So first and foremost, The plan is to have the trial completely enrolled in the first half of 24, and that's consistent with our guidance. I can tell you that we're on track with our enrollment expectations as we speak, and we should be able to achieve that objective. The primary endpoint of the trial is overall survival. And if you recall from our phase one study, we had a cohort where the mean survival was over 21 months. Obviously, completing the trial in early 24 is not going to bridge you to that primary endpoint, and that data won't be available until mid to late 2025. However, there are other endpoints that we're evaluating in this trial. The next probably more important endpoint is response rate. And because the trial is open label, we will have the ability to evaluate the data as it comes in real time from both of these arms. And if we are in a position to observe response rates that were along the lines of the observations in the phase one study, that will give us an opportunity to perhaps have discussions with regulators both in Europe and the FDA. And if you recall that phase one data at the high dose, we had a response rate of over 80% where the response rate for the standard of care treatment, napaxitaxel and gencitabine, was around 23%. So obviously, you know, one of the reasons for running this phase two trial with 92 patients is to see if we can replicate the observations that we had and the results we observed in the phase one study. With that type of data in hand, we'll have that option, if you will, to have discussions with regulatory authorities and anything is possible. Obviously, the agencies both in the US and abroad you know, want to get these types of treatments to the patients as quickly as possible, especially if we're seeing significant improvements in survival. So I guess an option is, if the data are as robust as we observed in the phase one, to convert this ongoing phase two into a pivotal trial. And I guess there's always the possibility of some form of accelerated approval with the continuance of enrollment to collect additional data. Does that help answer your question?
spk02: It does indeed. Thank you very much. Much will depend on how the data looks, of course.
spk01: Exactly. It's all about the data.
spk02: Exactly right. There are a couple INDs I think that previously were guided to potentially filing by the end of 23 the adjunctive to chemo. with enritinoblastoma, potential IND guidance for the end of this year, and then also the next-gen oncolytic adenovirus, VCN11, a potential IND filing with trials starting sort of fourth quarter 23. Could you please update where those stand? I know that maybe timelines have adjusted.
spk01: Right. Let me talk to retinoblastoma very quickly, and then I'll have Manel discuss where we're at in our research and development initiatives. The retinoblastoma program continues. Interestingly, we continue to enroll patients in the Phase I study, and as that data further matures, we'll have something to talk about at a later date. We do have a meeting with the FDA in December to discuss a path forward for the retinoblastoma program. You know, together with our key opinion leaders around the world, we've come up with some ideas about potential designs for a retinoblastoma program. As we mentioned in our discussions earlier, there's no approved treatment for retinoblastoma. And, you know, those patients today that get treated are done so in multiple different ways, depending on what part of the world those patients are being treated. So having an approved treatment with a set protocol is something that not only we're very much interested in, but I think treating physicians around the globe would be interested in. So after our meeting in December, I think we'll have a bit better idea about how that program and that trial design, you know, may look. And then after those discussions, you know, have been finalized, then we could talk, you know, to all of you about, you know, what the timing of a program like that may look like. Manel, you want to talk about the R&D efforts?
spk03: Okay, thank you. Yeah, so very briefly, so our R&D team is working very intensively. in the development of new candidates right now. So we have a bunch of different technologies that some of them have already been published. For instance, the APD technology, as you are perfectly aware, it's a technology that basically allows our products to escape the interaction with neutralizing antibodies. But our scientists have also developed new technologies right now, and they are right now evaluating the combination of these new technologies with the ABV technology to generate a more powerful product. And in fact, that's something that they are very actively working in just fine-tuning the best candidate to move to the clinic. That's something that we expect to occur probably at some point during the first half of next year or so. And in parallel to that, the team has also been working in all this aspect related with manufacturing, which is an intrinsic part of the development of products. And it's very relevant because, as you know, for our products, the replication capability, it's a critical feature that allows for a much better clinical behavior. So we have been increasing our capabilities here also in the manufacturing terms for testing the process development for the new candidates that we are developing. And we have acquired new equipment in our lab here in our facilities in Europe. And we are very convinced that with these new capabilities, we are going to just generate very relevant data for just moving ahead the new candidates faster than we have done previously.
spk02: Well, maybe the last question on the pipeline then, if I could please. I think you guys touched on most of your early stage ISTs. Did you touch on the glioblastoma one with University of Leeds where that IST stands? And then as you look, you've been, you know, You've been in these trials for a little bit. When you stand back and look, do you see one or two that look most more promising than others at this juncture?
spk00: Sure. Vince, you want to take the LEADS question first? Yeah. So, thanks, Jim.
spk04: The University of Leeds study We had to, well, it's an investigator-sponsored study. The investigators wanted to make an amendment to the protocol, which they did to help with the scheduling of the surgery that's part of that protocol. As you're probably well aware, in the UK, everything runs through the NHS. And so scheduling was becoming a bit of a challenge, and they submitted that protocol. That protocol has recently been approved by the MHRA, and we are now working on the appropriate drug supply for them to move forward with that study. It's a study that's really a PK study, as I just want to remind everybody. It's fundamentally to see whether or not intravenous virus can get into the brain. So we have the one patient that's been treated. We don't have the final results from them. But that study is moving comparatively slowly just because of this amendment took quite a while to get approved.
spk01: But then maybe I'll just touch briefly on what I think we're learning from what we're doing in the clinic and what offers the most promise for unlocking the most value for the shareholders. Obviously, PDAC is the most important program to the company. It's the one where we're committing to you know, I would say 90-plus percent of our financial resources to. The other program that is very exciting that we just recently talked about from ESMO is the data using VCN01 in combination with the virulamipid head and neck cancer patients. We had an investigator following the release of the data at ESMO and when we put that press release out. That interview and conference is still available on our website and I encourage investors to go listen to it because it was quite revealing. Essentially, this was a group of 20 patients that had failed checkpoint inhibitor therapy These patients typically die within seven months after they've failed multiple rounds of checkpoint inhibitor therapy. These patients were then given VCN01 and then started up on checkpoint inhibitor therapy once again. And we had some pretty remarkable results. On average, at the low dose, we had a survival rate of 15 and a half months, and at the high dose, 17.3 months. So this is an interesting program, and potentially a program for partnering, and we have engaged with folks that should be interested in a program like this, and we'll keep you updated on the progress of those types of discussions.
spk02: Okay, the last question, I know that you touched on it in prepared remarks, But, Gene, a pretty remarkable drop in the quarter. Is this the level we should expect going forward, or is it going to go back to more than $2 million roughly per quarter that it had been over the last number of quarters?
spk01: It'll go back to more than $2 million. That was an anomaly resulted to the accounting for the contingent consideration. We had a payment to the Griffles, and obviously every quarter you readjust and revalue the the future payments that are all milestone driven. So that was more of an anomaly for the quarter.
spk00: Great. Thank you for taking the questions.
spk05: Thank you. There are no further questions at this time.
spk06: I would like to turn the floor back over to Steve Shellcross for closing comments.
spk01: Thanks, Irene. And thank you to everyone for taking the time to join us today. Again, we remain focused on driving our key programs forward and will continue to evaluate strategic opportunities that we believe have an opportunity to drive significant shareholder value and long-term success. Once again, thanks for joining us today, and we look forward to keeping you updated in the future. Have a great week.
spk05: This concludes today's conference. Thank you for joining us. You may now disconnect your lines.
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