Biora Therapeutics, Inc.

Greetings and welcome to the Viora Therapeutics second quarter 2022 earnings 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 raise star and then zero on your telephone keypad. As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Alexandra Schumann. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to Bioreth Therapeutics' second quarter 2022 Corporate Update and Financial Results Conference Call. Joining me on the call are Adi Mohanty, Chief Executive Officer, and Eric Desparves, Chief Financial Officer. Before I turn the call over to Mr. Mohanty, I would like to remind you that today's call will include forward-looking statements, within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our quarterly report on Form 10-Q that we will file later today and our subsequent reports filed with the SEC, which will all be available on our website in the Investors section. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control. Please note that the actual results could differ materially from those projected in any forward-looking statement. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, as well as risks related to our business, please see the company's periodic reports filed with the SEC. With that, I will now turn the call over to Adi Mohanty, the CEO of Biora Therapeutics.

Thanks, Alex, and thank you, everyone, for joining us. During the second quarter, we completed our transition from a diagnostics company into BiOra Therapeutics, a biotherapeutics company that's working on changing the way large molecules can be delivered to patients with potentially game-changing outcomes. BiOra is much more resource efficient and making rapid progress in its development. We've continued to generate human safety and performance data with our targeted therapeutics program, where we recently shared top line data from a human study demonstrating that the performance of our ingestible device is not impacted by food. Additionally, we recently concluded another study in active UC patients with outstanding results, demonstrating the device functions as intended in these patients despite disease in the colon. We received constructive feedback from the FDA on our UC clinical development plan, where they generally agreed with our proposed trial design and provided comments that we expect will allow us to have a more robust IND filing. We very much appreciate the FDA feedback and intend to implement their recommendations, including their suggestions on the talk studies, which were already planned for Q4 of this year. We expect these activities to allow us to file an IND in Q1 of 2023 so we can begin our phase one study. Our systemic therapeutics program continues on plan and is currently generating additional bioavailability data in animal models. We expect these data to be generated in the third quarter of this year and believe that is what will allow us to progress our plans with current collaborators and potential partners. We gave very well received presentations at the DDW and CRS conferences and recently announced that several abstracts covering our targeted and systemic programs were accepted at the upcoming ACG conference in October. Finally, we were awarded very important patents which continue to expand the protection of our two platforms and beyond. I'll cover these in more detail in a moment. First, our targeted therapeutics platform. As a reminder, our first program with this platform is an ulcerative colitis, or UC. Annual global sales for UC drugs are estimated to be approximately $7 billion, and the inflammatory bowel disease, or IBD space, overall is about $19 billion globally. Our lead program, PGN600, is a proprietary liquid formulation of tufacidinib delivered in the colon using our targeted delivery technology which is a device approximately the size of a fish oil pill. A commercially available version of tofacidinib is approved for the treatment of UC. Tofacidinib is administered orally, and like other drugs that are orally delivered, is mostly absorbed in the stomach or the upper GI tract, whereas UC is a disease of the lower GI tract. By delivering drug topically at the site of disease where it is needed, PGN600 has the potential to improve efficacy and also limit systemic exposure to improve safety. We're extremely pleased with the development of our drug delivery device. We have now completed three human studies with our device. The first study was completed last year and showed our device's performance in a fasted state. Fasting is the norm for ingestible devices, but fasting is not ideal for patients especially for patients requiring frequent administration or dosing, which is what is required in chronic diseases like ulcerative colitis. We recently announced top-line results for a study we completed in Q2 that included multiple dosing events per subject with different feeding schedules. Healthy participants were required to ingest a total of four devices each, with administration occurring following excretion of the previous device as per study protocol. This study specifically included administration of the device with food. The study demonstrated that all devices were safely ingested and exited the body naturally. Forty-three capsules were recovered for analysis and performance was measured by retrieving data from the recovered devices. Data was successfully retrieved from 39 capsules with four capsules damaged during data retrieval. All 39 devices indicated entry to the colon, activation, and deployment regardless of fasted or fed schedule with no failure modes observed in the analyzed devices. To our knowledge, this could be the first ingestible therapeutic delivery device that may not require fasting or other food restriction for use, greatly enhancing patient convenience and particularly helpful for chronic diseases. We also recently announced top line results from another study that assessed the safety and performance of the device in active ulcerative colitis patients. Given the different gastrointestinal physiology and disease activity in these patients, it is critical that the device performs as intended and can identify entry into the colon, activate, and release a payload in UC patients. In the study, the device was ingested orally by seven patients with active ulcerative colitis. After identification of colon entry, it released a saline solution payload that included radioisotopes. Synthographic imaging was used to independently indicate device location and payload delivery to the lower GI tract. The device was well tolerated, and the study demonstrated that in all patients, the device accurately identified entry into the colon, triggered release of a liquid payload, and achieved distribution across the entire lower colon as confirmed by an independent scintigraphic imaging method. The study is being completed with no further enrollment planned. We're not aware of any other oral drug delivery technology that can accurately detect colon entry, especially in the environment of inflammation, blood, and highly variable motility seen with these patients. This makes the targeted therapeutics platform a potential game changer in the management of diseases like ulcerative colitis. These successful studies in humans support the safety and performance of the device and are key steps in advancing towards our PGN600 clinical program. It also demonstrates the potential of the platform for localized delivery of other drugs. As you know, PGN600 is our lead program in our targeted therapeutics platform and is a combination of our device and our proprietary formulation of tefasidinib. In Q2, we had submitted a Type C filing to the FDA asking for feedback on our proposed clinical development plan. The FDA response was constructive and extremely helpful. They generally agreed with our trial design and provided helpful feedback on the protocols. The FDA also reviewed our proposed supporting data package and confirmed the need for animal toxicology data. As we had previously mentioned, we had already planned for an animal tox study later this year. We believe that with the final reports of the recently completed human functional studies and the planned animal talk study this year, we will be in a position to file an IND in Q1 2023 to support the initiation of our Phase I study. Following FDA feedback, we move ahead with more certainty and clarity and are able to share our proposed design for the study. The phase one single and multiple ascending dose studies will evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics of PGN600. We expect that the single ascending dose study will include 24 healthy volunteers and evaluate drug concentration in serum and feces. The multiple ascending dose study is planned to include 24 healthy volunteers with repeat daily dosing for seven days, And in addition to drug concentrations in serum and feces, we will also measure drug concentrations in colon tissue. Two different doses of PGN600 are planned for both studies, 5 and 10 milligrams of tofacitinib daily. These doses are well below the commercially approved induction dose of tofacitinib of 10 milligrams twice daily. We're including a diagram of our clinical study design in the updated corporate presentation on our website. Given the data already generated and presented on the correlation between tissue concentration of tofacitinib and improved patient outcomes, if the clinical data generated in our Phase I trial confirms that we can safely achieve high tissue concentrations, just as we have seen with PGN600 in preclinical studies, we believe there's a high likelihood of improving remission rates in UC patients compared to current therapies. Because of the well-known therapeutic profile of tofacitinib in standard oral formulations and the ability to utilize or reference these existing data, we believe our development risks for PGN600 are reduced. Soon after the phase one trial is completed, we plan to move into a disease interventional study where we plan to evaluate clinical remission after eight weeks treatment with PGN600 in active UC patients. We're now entering an important phase of development for this program and are very excited by the opportunity to help UC patients and address their substantial unmet needs. Data supporting the need for high tissue concentrations to achieve remission in ulcerative colitis was presented at Digestive Disease Week in May. Key opinion leader, Dr. Severine Vermeer, gave a presentation titled, Tofacidinib Tissue Exposure Correlates with Endoscopic Outcome. which Dr. Vermeer co-authored with lead author Dr. Bram Verstock and others. In the presentation, Dr. Vermeer presented patient data confirming a significant relationship between drug levels in tissue and endoscopic improvement in patients with moderate to severe ulcerative colitis who were treated with tufacitinib. Specifically, the study supports the hypothesis that a tissue concentration of tofacitinib at or exceeding IC90 is directly correlated to significant improvement in patient outcomes. Preclinical data indicates that these tissue concentrations can be achieved with PGN600 even with lower doses than commercially available oral doses of tofacitinib. In addition, Current data suggests a need for combination therapy to target multiple inflammatory pathways in some patients with UC. However, combination therapies must overcome the systemic toxicity limits of current approaches. BiOra's targeted therapeutics platform is designed to achieve higher doses in tissue while significantly reducing toxicity due to systemic uptake. Our approach could facilitate combination therapy to simultaneously target multiple inflammatory pathways, leading to improved therapeutic outcomes for the many UC patients who today are unable to achieve remission of symptoms. With respect to our IP in this area, we recently announced the issuance of a US patent, the granting of two European patents, and the allowance of an additional US patent with claims directed at our device, including the localization technology that enables detection of colon entry. This technology is essential for accurate and consistent targeted delivery to the colon. In addition to use in our drug delivery device, the localization technology is a standalone unique technology that has the potential to be used broadly for ingestible devices. Next, I'll cover our systemic therapeutics platform. The goal of this platform is to facilitate oral administration of drugs that would otherwise require injection or infusion. Our systemic therapeutics delivery solution is an oral device which provides liquid jet delivery of large molecules to the small intestine in order to maximize systemic uptake. We believe this platform can help improve disease management and associated patient outcomes, reduce intravenous infusion costs, help expand the market for drugs across a range of chronic use indications, and help biotherapeutics such as monoclonals become more competitive with small molecule substitutes. Our platform has the potential to deliver a broad range of approved or other large molecules such as proteins, peptides, and nucleic acids without complex reformulation. During the second quarter, we've continued to make progress with device design and manufacturing. Although we have data with several molecules on this platform, such as anti-TNF-alpha and monoclonal antibodies, our initial focus is on a high concentration formulation of the peptide liraglutide, a GLP-1 receptor agonist. We believe that achieving 10% to 15% bioavailability through oral delivery would enable our platform to be commercially viable with a broad range of large molecules. At the Controlled Release Society annual meeting in July, we presented results of early preclinical research on the systemic therapeutics platform, including the development of preclinical models that enabled further evaluation of device performance and pharmacokinetics. We also presented the results of a preclinical study where we demonstrated monoclonal antibody bioavailability of up to 55% with an average of 25% in animals with drug detected in blood. These results are an order of magnitude greater than the current oral protein or peptide delivery methods and support the broad potential use of the platform. We expect to share existing and future results at other upcoming conferences, including the Parenteral Drug Association Universe of Pre-filled Syringes and Injection Devices Conference and the ACG Annual Meeting in October. We currently have multiple animal studies ongoing with liraglutide and other molecules. Data readouts are expected in Q3. We believe that data from these studies could be sufficient to progress our collaborations and potential new partnerships into next stages, as well as allow us to be ready for human clinical trials next year. We recently received notice that an important BiORA patent application has been allowed by the USPTO for our systemic therapeutics platform. The application covers oral delivery of a liquid formulation of any GLP-1 receptor agonist using any method of liquid jet delivery in the small intestine. It strengthens the intellectual property position of our PGN-OB2 candidate, which consists of a novel liquid formulation of liraglutide delivered via liquid jet to the small intestine for the treatment of type 2 diabetes. The only currently marketed oral GAP1 receptor is about 1% bioavailable. We believe we can do significantly better than that as we have already shown preclinical bioavailability averaging over 20% with proteins. This allowed patent application combined with the rest of our IP portfolio, provide a strong footprint for BioRaw in the GLP-1 market, which is forecasted to be well over $20 billion by 2025. To summarize some of our upcoming milestones for both platforms, we will be finalizing reports for the 611 and 602 studies that were recently completed to facilitate future publication of the results. We plan to initiate a talk study with PGN 600 later this year, and based on the results, we'll file an IND in Q1 2023 to support the initiation of our phase one study. We're currently running multiple animal studies with our systemic therapeutics program with liraglutide and expecting data generation through Q3. We expect to execute animal studies for molecules of our former collaborators by Q4 this year. We will be presenting several abstracts covering both our targeted and systemic programs at the upcoming ACG conference in October. We expect a pre-IND filing with the FDA for our systemic therapeutics program with one of our molecules next year, and we expect to initiate our phase two study for PGM-600 next year. With that, I'll now turn the call over to Eric for a discussion of our financial results and capital market activities.