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spk06: And welcome to the ACASTI-Pharma fourth quarter and fiscal year 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. Withdraw your question. please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Robert Bloom of Lifem Partners. Please go ahead.
spk03: All right. Thank you very much, MJ, and welcome to Acacia Pharma's fiscal year and 2022 conference call. On the call with us this afternoon is Jan DelVees, President and Chief Executive Officer, Brian Ford, Chief Financial Officer, and Monique Champagne, Vice President of Clinical Affairs. Following management's prepared remarks, there will be a Q&A session. Should any questions remain after the call, please don't hesitate to contact me at 602-889-9700. I'd also like to remind everyone that statements on this conference call that are not statements of historical or current facts constitute forward-looking information within the meaning of the Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and the Securities and Exchange Act of 1934. Such forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results to be materially different from those expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, listeners are urged to consider statements labeled with terms, belief, expects, intends, anticipates, potential, should, may, will, plans, continue, targeted, or other similar expressions to be uncertain and forward-looking. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the dates of this conference call. Forward-looking statements during this conference call may include but are not limited to the success and timing of regulatory submissions of the planned Phase III study for GTX104 and ACASI's other preclinical and clinical trials, regulatory requirements or developments in the outcome of meetings with the FDA, changes to clinical trial designs and regulatory pathways, legislative, regulatory, political, and economic developments, and costs associated with ACASI's clinical trials. The forward-looking statements made during this conference call are expressly qualified in their entirety by this cautionary statement, the cautionary note regarding forward-looking information section, and the risk factors contained in ACASI's annual report on Form 10-K, which is available on EDGAR at www.sec.gov. on CDAR at www.cdar.com and on the investor section of the ACASI website at www.acasifarma.com. In addition, any forward-looking statements represent ACASI's views as of today and should not be relied upon as representing our views of any subsequent date. ACASI undertakes no obligation to update such statements to reflect events that occur or or circumstances that exist after the date on which they were made, except as required by applicable securities laws. I'd now like to turn the call over to Jan Del Vies, President, Chief Executive Officer, Mikasi Pharma. Jan, please proceed.
spk01: Thank you, Robert. Given that we conducted our last conference call only about a month ago when we announced the positive results of our PK bridging study for GTX-104, We plan to keep today's prepared remarks covering our fiscal year 2022 rather brief, allowing for more time at the end for questions. Fiscal 22 was a truly transformative year for Acosti. We pivoted as a company and acquired Grace Therapeutics in late August of 2021. This acquisition gave us a new mission of reformulating and repurposing marketed medicines for indications in rare and orphan diseases. where significant unmet medical needs exist. This strategy allows us to pursue the 505 regulatory pathway, which is potentially a faster, lower cost, and lower risk approach to getting drugs approved by the FDA. We now have three drug candidates advancing in clinical development, and all three have already received orphan drug designation by the FDA, which could grant us seven years of market exclusivity in the United States. We also expanded an already extensive portfolio of approved and pending patents that cover composition of matter and method of use, which can extend our market exclusivity to 2036 and beyond. So let me give you a quick update on the status of our lead drug candidate, GTX-104, which is a novel formulation of nemotipine for IV infusion designed specifically for patients with subarachnoid hemorrhage, or SAH. which is a condition caused by bleeding on the brain due to a ruptured aneurysm. SAH presents a life-threatening emergency for the patient, and our new proprietary IV drug formulation addresses a vital need in the critical care market that has seen little innovation over the years. SAH patients are so critical that 10% to 15% die before they ever reach the hospital, and about one-third ultimately do not survive. Another third of these patients require dependent care for the rest of their lives. SAH is estimated to affect about 50,000 patients per year in the United States alone, and based on our market research, we believe that GTX-104 represents a total available market in the United States of more than $300 million. The current standard of care is an orally administered drug called nimetipine, which was approved by the FDA back in 1988. Nimodipine is a powerful calcium channel blocker, and it works primarily on the brain to lower the patient's blood pressure by relaxing cerebral blood vessels, thereby increasing blood flow and oxygenation. Nimodipine is mandated by the Joint Commission that certifies U.S. stroke centers to be administered to all patients with SAH, as it's been shown to reduce the incidence of delayed cerebral ischemia in and to improve neurological outcomes. Nomodipine is available in the U.S. only as an orally administered capsule, which is problematic as many of these SAH patients are not conscious, or if they are awake, they have a hard time swallowing oral drugs. The nursing staff must pull apart the capsule, siphon off the drug to be delivered orally to the patient via a nasogastric tube that goes directly into the stomach. As nemotipine can stick to the side of the tube, it's very difficult to control how much drug is actually being delivered and ultimately absorbed. This leads to a lot of variability in dosing and the resulting blood pressure of the patient. We believe that GTX104 delivered intravenously could be a major improvement in the standard of care as a more convenient, efficient, and precise way to deliver nemotipine directly into the patient's bloodstream. On May 18th, we held a conference call where we announced that our GTX-104 PK bridging study successfully met all its endpoints. The primary objective of the PK study was to evaluate the relative bioavailability of GTX-104 delivered intravenously compared to oral nematopene in healthy adult male and female subjects, while the secondary objective was to assess its safety and tolerability. The results showed statistically no difference in maximum and total exposure between IV GTX104 and the oral formulation of nemotipine, and no serious adverse events were observed. This means that GTX104 can be considered essentially bioequivalent to oral nemotipine. Additionally, the bioavailability of oral nemotipine capsules was observed to be only 8% compared to GTX104 which when given intravenously is naturally 100% bioavailable. Consequently, less than one-tenth the amount of nemotipine is administered with GTX104 to achieve the same blood levels as the oral capsules. One of the most important findings from this PK study is that plasma concentrations obtained following IV administration of nemotipine showed significantly less variability between subjects as compared to oral administration. both the inter- and intrasubject variability was significantly lower for GTX104 as compared with oral nematopine. This is important as we believe that because of its better absorption profile and more consistent blood levels, GTX104 may provide physicians with a more reliable and effective treatment for patients with SAH. This is a key advantage as we believe GTX104 could help to reduce the incidence of hypotensive events and vasospasm, which require immediate and costly intervention and can lead to worse outcomes for the patient. Moreover, it could provide dosing flexibility and a more consistent and convenient route of administration for the significant percentage of patients who present and remain unconscious during their ICU stay following SAH. Finally, despite the positive impact that nemotipine has on recovery and in improving neurological outcomes, Physicians must often discontinue nemotipine treatment, primarily as a result of hypotensive episodes that are difficult to control with the oral administration of the drug. Such discontinuation of nemotipine could potentially be avoided by giving the patient GTX-104, which because of its IV administration, the rate of infusion can be controlled by It may also alleviate the need for careful attention to the timing of oral nematopene administration at least one hour before or two hours after a meal. For all these reasons, we believe IV administration of GTX104 could be a much better option for SAH patients than oral nematopene. It represents a significant commercial opportunity, and we believe GTX104 could be well-positioned to rapidly capture market share if the FDA grants approval. We plan to submit our recent PK Bridging Study results to the FDA very soon, along with our proposed design for the Phase III Safety Study, which we believe can start as planned in the second half of this year. The Safety Study is expected to be the final step required to seek regulatory approval under the 505 regulatory pathway before submitting our new drug application to the FDA. We believe the Safety Study should be relatively low risk based on the favorable safety profile observed, now in more than 130 patients combined from our Phase I PK studies. In addition to GTX-104, we remain enthusiastic about the depth of our clinical pipeline, which includes GTX-101 and GTX-102, and we continue to make steady progress advancing these two drug candidates toward their next major milestones. As a reminder, GTX-102 is a novel concentrated oral mucosal spray of beta-methazone intended to improve the neurological symptoms of ataxia telangiectasia, or AT for short. AT is a progressive neurodegenerative genetic disease that primarily affects children causing severe disability and for which no treatment currently exists. GTX-102 is comprised of the active glucocorticosteroid beta-methazone and can be sprayed conveniently over the tongue of the AT patient. We believe there's a significant market opportunity for GTX-102 as it could be the first FDA-approved therapy for the more than 4,000 AT patients diagnosed in the U.S. Based on third-party market research, we estimate the AT market for GTX-102 is to be about 150 million in the United States alone. We plan to initiate the PK bridging study of GTX102 in calendar Q3 of 2022, and we continue to expect to report out the results before the end of this year. The objective of this important PK study is to compare the bioavailability of three different doses of GTX102 to an oral solution of beta-methazone, which is only available in Europe, and to the injectable form of beta-methazone, which is available in the U.S. Based on the FDA's guidance following the PK Bridging Study and assuming the PK Bridging Study meets its primary endpoint, we plan to conduct a Phase III safety and efficacy trial in AT patients, which is expected to be initiated in the first half of 2023. If both the PK and Phase III studies meet their primary endpoints, an NDA filing under Section 505B2 would follow. The final program that we have currently in the clinic is GTX 101, which again is a non-narcotic topical bioadhesive bupivacaine spray that forms a thin film on contact with the skin in the targeted area of pain. We designed it to help relieve the painful symptoms of postherpetic neuralgia, or PHN. PHN is the excruciating nerve pain that many older people experience after the visible manifestations of a shingles infection have subsided. We commissioned primary market research with more than 250 physicians that routinely treat PHN patients, and they indicated that a significant unmet need exists. Approximately 40% of patients that are prescribed the standard of care, which includes oral gabapentin and lidocaine patches, experience insufficient pain relief. Gabapentin does not work well. It can cause unpleasant side effects and was recently added to the controlled substance list due to a tendency for abuse. The patches are difficult to use. They fall off and can cause skin sensitivity and irritation, especially in older individuals, and depending on their placement, they're very inconvenient, uncomfortable, and unattractive. Additionally, it can take up to two weeks for the patch to work, and it can only be worn for a continuous 12 hours, and then it must be removed for another 12 hours, so breakthrough pain is common. Given these issues with the oral and patch alternatives, too many of these patients end up being prescribed opioids. which given the abuse potential, physicians want to avoid at all costs. The potential benefits of GTX 101 could include faster onset of action, which is inherent in our active ingredient bupivacaine versus lidocaine, as well as a longer duration of pain relief. GTX 101 can be conveniently sprayed on the skin wherever the pain is located, and based on the PK profile of bupivacaine, we believe that GTX 101 may be applied twice a day to the affected area for 24-7 pain relief, although this dosing schedule will need to be confirmed in our clinical trials. We believe GTX 101 has the potential to be a game changer as a non-opioid analgesic for PHN patients who suffer from this debilitating pain. We expect to report results of a mini pig skin sensitivity study in early calendar Q3. We're also planning to initiate a single dose study and a multiple ascending dose study in Healthy Human Volunteers, both in calendar Q3 2022. These two important clinical studies are expected to report out before the end of this calendar year. Results from the multiple ascending dose study is required before we can initiate our phase two program in PHN patients, which is expected to start early in 2023. So you can see that we currently have significant ongoing clinical and CMC activities underway for all three of our pipeline programs. You'll also note that we had a total of almost 44 million in cash, cash equivalents, and short-term investments on our year-end March 31st balance sheet. We continue to believe this cash position will allow us to complete phase three for GTX 104 and submit our NDA for the FDA to review, while also advancing GTX 102 into phase three and GTX 101 into phase two, all important milestones and key value inflection points. We're very excited about the prospects ahead for the company and look forward to keeping you apprised of our progress towards our many milestones in this new fiscal year. I'd like to now turn the call over to Brian Ford, our CFO, to review our fiscal 22 financial results. At the conclusion of Brian's remarks, we'll open the call for questions. Brian?
spk04: Thank you, Dan, and welcome everybody to the call. Please note that unless otherwise indicated, all financial numbers that we discuss are denominated in U.S. dollars, and the financials are reported conforming to U.S. GAAP guidelines. We should also note that we are a clinical stage company, thus we do not yet generate revenues or have any cost of goods expenses. Research and development expenses net of government assistance for the year ended March 31st, 2022 totaled 5.6 million compared to 4.2 million for the year ended March 31st, 2021. Our research and development during the year ended March 31st, 2022 was focused primarily on advancing our three clinical development programs for our GTX 104, 102, and 101 drug candidates. All three were acquired in the Grace merger, which was completed in August of 2021. Research and development expenses during the year ended March 31st, 2021, related to the phase three clinical program for Capri, which was discontinued after September 2020. However, it did include some due diligence work and activities on various strategic options under review prior to the grace merger announcement. General administrative expenses before depreciation and stock-based compensation expenses for the year end of March 31, 2022, were $9.3 million compared to $5.5 million for the year end of March 31, 2021. The increase was a result of increased legal, tax, accounting, and other professional fees related to the grace merger. and expenses related to the renewal of our at-the-market program. Loss from operating activities for the year ended March 31st, 2022 was $15.6 million compared to a loss of $16.4 million for the year ended March 31st, 2021. The company incurred net financial gains for the year ended March 31st, 2022 of $5.1 million compared to a $3.3 million loss for the year ended March 31, 2021. The change is primarily due to a change in the fair value of warrant liabilities on the balance sheet. Next year, or sorry, that loss for the year ended March 31, 2022, was $9.8 million, or $0.27 per share, compared to a net loss of $19.7 or $1.33 per share for the year ended March 31st, 2021. As Jan already noted, our cash, cash equivalents and short-term investments totaled $43.7 million as at March 31st, 2022, compared to $60.7 million as at March 31st, 2021. Based on management's current projections, current cash is expected to fund our lead assets GTS 104 through to NDA submission and GTS 102 and 101 to additional key milestones. With that, I'll now turn the call back over to Jan.
spk01: Thanks, Brian. Appreciate that. I'll now turn the call over to the operator. MJ, can you open it up for questions?
spk06: Of course. Thank you, Jan. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Leland Gerschell of Oppenheimer. Please go ahead.
spk05: Thanks, Jan and Brian, and thanks for the update. Questions first with respect to 104. I'm sorry if I missed it in the prepared remarks, but if you could remind us on the design and number of patients or subjects you'll need in that safety study and when we might be able to see the results. And then also have a question with respect to the IP. I know you have the notice of allowances. Do you know when those patents are expected to issue?
spk01: Thank you. Yeah. Thanks, Leland, and thanks so much for being on the call today. I'll briefly describe what we're thinking of here for the design of the safety trial and also turn it over to Monique Champagne, our VP of Clinical Affairs, and she can add any additional comments. We're in the final stages of designing the study right now, and we'll be submitting the draft protocol along with the results of our PK study very soon, probably within the next month or two. So we'll submit that to the FDA, and then we look for any comments from them on the design. So we are currently on track to initiate the safety study before the end of this year. and we still expect that it'll be in roughly 100 to 125 patients. It'll be two arms, so we'll be comparing the safety profile of GTX104 with the safety profile of the oral capsule. And so this is important. Obviously, nemotipine can't be withheld from those patients. We don't think that we'll need more than a couple dozen sites. We're working with some of the biggest centers in the country, biggest stroke centers, and we would expect pretty decent recruitment. So we're anticipating the study will take probably in the ballpark of 12 to 18 months to complete. So we're thinking towards the end of 2023, early 2024, the study should wrap up. And then, you know, it'll take a quarter or so to compile all the results and submit our NDA. But we're still on track, we believe, to submit the NDA in early 2024. Monique, is there anything you'd like to add that I didn't cover there?
spk07: No, I think the information was complete. However, I believe you also asked some questions on the study design of the trial study. Am I right? Sorry, you broke up there, Monique.
spk02: Study design of what? Published results, or am I mistaken? You're still breaking up. Can you repeat that?
spk07: were there other questions you wanted to clarify on this design of the recently published fee?
spk01: Oh, okay, got it. Yeah, Leland, any questions you have on the PK?
spk05: No, no, the PK looked terrific, so no questions.
spk01: Yeah, I think the other question was on the IP, right, the status of the IP and when it would be issued.
spk05: Just post the NOAs, you know, if we'll see those patents on issue later this year.
spk02: Monique, can you comment on that?
spk07: I'm so sorry. Communication is really bad. Can you please repeat the question?
spk05: I'm sorry. Just asking about the patents, following the NOAs when those patents might issue, presumably in the coming months.
spk07: I was informed that everything was on tracks for patents, so I don't foresee any issue with that.
spk01: Yeah, I think that's right, Leland. I think we would expect issuance very, very soon.
spk05: Thanks so much for taking the question.
spk02: Thanks. Did you have any other questions, Leland?
spk05: No, that's all for me. Thank you.
spk01: Okay, thank you. And operator, I don't know, for some reason the line seems to be breaking up. I don't know if it's just my line.
spk06: You're coming in loud and clear.
spk01: Okay. I had difficulty hearing Leland as well.
spk06: I apologize for that.
spk02: Do we have any other questions?
spk03: MJ, do you want to, you know, MJ, maybe while we wait to see if there are additional questions, I'll jump in here with just a couple, Jan, if that's okay here with you. You know, Leland touched a little bit on GTX 104, maybe transitioning to GTX 102. Has the 102 PK bridging study protocol been developed or approved?
spk01: Yeah, that's a great question. So, yeah, the study has been designed. It's going to be a fully randomized, open-label, five-arm, crossover study. And, of course, it's going to evaluate the comparative bioavailability and pharmacokinetics of GTX-102, which, again, is a concentrated oral mucosal spray. And we'll be comparing it to beta-methazone administered as an oral solution and which is only available in Europe. So we'll be doing that, you know, comparison, that arm for future filing purposes in Europe, as well as an IM arm. So it'll be an injectable form of beta-methazone for filing purposes in the U.S. and in Canada. So that study, that protocol has been finished. We are, you know, this will be conducted in healthy male and female volunteers, and is set to start within the next month or so. So we're fully on track with that program.
spk03: Okay, perfect. And then just, I guess, on the cash burn, I don't know if Jan or Brian wants to talk through this, but from a monthly sort of burn perspective now versus when some of these trials begin, is there any updates that you can provide to us there?
spk02: Sure. Brian, do you want to take that one?
spk04: Sure. As we've been ramping up the research and development activities for these three products, our monthly burn has been roughly $800 to $1 million over the last nine months. Going forward, we expect that to increase to upwards of $2 million a month as we get heavier into the clinical trials, which are administered by contract research organizations and that sort of thing. So that was a fully planned scale-up, and that's where we expect things to land over the next several months.
spk03: Okay, perfect. Thank you for that. That's what I had. MJ, if you want to provide instructions on how to queue up if there are any questions, any further questions.
spk06: Of course. If you have a question, please press star, then 1. If there are no further questions, I would like to turn the conference back over to the management team for any closing remarks. Please go ahead.
spk01: Okay. Thank you, MJ. I want to thank everyone for taking the time to be with us today on this call. I also want to reiterate our enthusiasm for our three clinical development programs and our excitement about the prospects for the new fiscal year. We believe fiscal 23 can be a truly transformative year for the company as there are numerous important potential value inflection points in the coming 12 months with important trial results expected to be reported for GTX 102 and 101 before the end of this calendar year. By the end of this fiscal year, which again as a reminder is on March 31st, 2023, we intend to have two phase three programs underway for GTX 104 and 102 and a phase two program underway for GTX 101. As a reminder, each of these drug candidates are being developed to address important unmet medical needs and their respective rare and orphan disease indications. And we hope that our efforts will result in better treatment options for these patients, their families, and the physicians who treat them. In the drug development world, this is what makes it so exciting for us to come to work each and every day. As always, we thank you all for your continued support of ACOSTI, and I wish you a great rest of your day.
spk02: MJ, I'll turn it back over to you. Thank you, Jan.
spk06: This concludes our conference today. Thank you for attending. You may now disconnect.
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