Bio-Path Holdings, Inc.

Good morning, ladies and gentlemen. Welcome to the Biopath Holdings full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. At this time, I'd like to turn the floor over to Will O'Connor of Stern Investor Relations. Sir, please proceed.

Thank you, Operator. Welcome to the Biopath Holdings conference call and webcast to review the company's full year 2022 financial results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release which outlines the topics that we plan to discuss on today's call. The release is available at biopathholdings.com. With me today from Biopath are President and CEO Peter Nielsen and Senior Vice President of Finance, Accounting, and Administration Anthony Price. Before we begin, I'd like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call. With that, I'll now turn the call over to BioPath CEO, Peter Nielsen.

Thank you, Will. Good morning, everyone, and thank you for joining us. 2022 was a year in which we made great progress executing on our mission to bringing new medicines to the battle against cancer. With a disease as evasive and resistant to treatments as cancer, we need to bring bold new approaches to fight this deadly disease. At Biopath, we are bringing true innovation to the fight against cancer with our de-enablized platform across a number of hard-to-treat cancers. We are proud of the progress we've made and inspired by the hope we can bring to patients with limited or no treatment options. In December, we were delighted to report the initiation of an important Phase 1B clinical trial in BP1001-A in patients with solid tumors, including ovarian, endometrial, pancreatic, and triple negative breast cancer, some of the most challenging cancers to treat with today's therapeutic toolkit. BP1001-A is a modified product from Prexagiviracin sharing the same drug substance with enhanced nanoparticle properties. This trial is being conducted at several leading cancer centers and will initially evaluate the safety of solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that we may provide clinical benefit for such patients. We look forward to cohort completion and data readout from this study around mid-year. Next, let's turn to the progress we have made with our lead product candidate, Prexigyboricin. We continue to make significant progress advancing stage two of our phase two clinical trials of Prexigyboricin for the treatment of acute myeloid leukemia, or AML, in combination with frontline therapy, Decidivine and Venetoclax. The amended stage two of this phase two trial in AML is an open-label, two-stage, multi-center study of Prexagiviricin in combination with Decidivine and Venetoclax in two cohorts of patients with previously untreated AML and relapsed resistant AML. A third cohort includes treating relapsed resistant AML patients who are venetoclax-resistant or intolerant with the two-drug combination of Prexagiviricin and Decidivin. The primary endpoint for this study will be the number of patients who achieve complete remission, which includes complete remission with incomplete hematologic recovery and complete remission with partial hematology recovery. An interim analysis will be performed on each cohort to assess the safety and efficacy of the treatments. In the coming weeks, we will assess the initial safety and efficacy of this combination therapy with the potential to qualify for expanded program status. Turning now to our BP1002 program, which targets BCL2. As you know, BCL2 is responsible for driving cell survival in up to 60% of all cancers. High expression of BCL2 has been correlated with poor prognosis for patients diagnosed with AML. Medical acts have shown activity against anti-apoptotic protein BCL2 and works by neutralizing the protein's BH3 domain. It is an approved treatment for chronic lymphocytic leukemia, or CLL, patients and untreated AML patients. However, with the exception of some patients, treated with allogenetic hematopoietic cell transplantation, disease relapse invariably occurs, oftentimes due to BH3 domain mutation over time. BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatments. A total of six available patients will be treated with BP1002 monotherapy and a standard 3 plus 3 design with a starting dose of 20 milligrams per square meter. The approved treatment cycle There's two doses per week over four weeks, resulting in eight doses administered over 28 days. The phase 1B portion of the study will commence after completion of BP1002 monotherapy cohorts and will assess the safety and efficacy of BP1002 in combination with the cytobin and refractory relapse AML patients. We expect cohort completion completion and initial data readout from this study around mid-year. Finally, let's review the progress we've made with BP1003, which targets the STAT3 protein. STAT3 is a transcription factor that regulates various tumorigenic processes, such as tumor proliferation, metastases, and drug resistance. It's overexpression. and aberrant activation characterize many cancers, including breast, lung, ovarian, liver, and colon cancer. Activation of the STAT3 pathway in breast and ovarian cancer cells promotes tumor initiation, migration, and taxol resistance. STAT3 also promotes 5-FU resistance in colorectal cancer cells. Its role in numerous malignancies made STAT3 a potential cancer therapeutic agent. BP1003 is a novel liposome-incorporated STAT3 antisense oligodeoxynucleotide that efficiently reduces STAT3 expression and enhances the sensitivity of breast and ovarian cancer cells to taxel and 5-FU. These results are in line with previous work in which BP1003 plus gemcitabine displayed enhanced antitumor activity to pancreatic ductal adenocarcinoma. Together, these results strongly suggest that BP1003 combination therapy is a novel strategy for patients with advanced solid tumors. We are particularly excited to launch our first in-human validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options. We look forward to filing an IND application for this very promising product candidate later this year. With that, I'll now turn the program over to Anthony Price for a brief review of our financials along with balance sheet highlights. Anthony?

Thanks, Peter. The company reported a net loss of $13.9 million or $191 per share for the year ended December 31st, 2022, compared to a net loss of $10.4 million or $155 per share for the year ended December 31st, 2021. Research and development expense for the year ended December 31st, 2022 increased to $9.2 million compared to $5.9 million for the year ended December 31st, 2021. primarily due to manufacturing expenses related to drug product releases in 2022, increased enrollment in our phase two clinical trial for Prexigibircin and AML, and startup costs related to our phase one clinical trial for BP1002 in refractory relapsed AML patients. General and administrative expense for the year ended December 31st, 2022 increased to $4.7 million, compared to 4.5 billion for the year ended December 31st, 2021, primarily due to increased legal fees. As of December 31st, 2022, the company had cash of 10.4 million compared to 23.8 million at December 31st, 2021. Net cash used in operating activities for the year ended December 31st, 2022 was 15.1 million compared to 9.9 million for the comparable period in 2021. Net cash provided by financing activities for the year ended December 31st, 2022 was 1.7 million. With that, I'll now turn the call back over to Peter.

Thanks, Anthony. As I hope we have conveyed, we have an exciting year ahead with several potentially value creating clinical milestones across our portfolio, including Cohort completion and data readout from our Phase I-1B clinical trial of BP1001-A in solid tumors around midyear. Cohort completion and data readout from our Phase I-1B clinical trial of BP1002 in relapsed refractory AML around midyear. An initial interim safety and efficacy analysis from our Phase II clinical trial of Prexagibiris and AML beginning in the coming quarter. At BioPath, we never lose sight of our goal to bring new medicines to the fight against cancer. It is this singular mission that drives us to push the boundaries in our work every day with passion and purpose. With that operator, we're ready to open the call for questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then 1. To withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Once again, that is star and then 1 to join the question queue. Our first question today comes from Laura Engel from StoneGate. Please go ahead with your question.

Good morning, Peter. How are you?

I'm doing well, Laura. Thank you.

Good, good. Well, lots of good news. Busy, busy as always. Fighting the good fight. I love that, how you finished your comments. But could you just comment, given recently reported you're in cash balances, obviously the explanation for the change in the R&D year over year, which you've mentioned the manufacturing kind of details how that works a little bit differently. But just kind of what you see high level, of course, for the upcoming year, comparatively speaking, as we kind of model with everything, with all the different programs going on and try to kind of get some insight on that.

Yeah, a little background color. Recall in the previous two years with COVID, the manufacturing environment was so tough for us and probably for everybody. Both our plants had COVID shutdowns and it was difficult for them to reestablish manufacturing. We worked with them and one of the key things we did was we concluded that we needed to go out and double our supply chain in both the oligo and uh, manufacturer and the drug product manufacturer, um, the, the limitations on drug supply over those two years really slowed and limited our, uh, enrollment because, you know, obviously we're not taking people in if, uh, you know, we have a risk of cutting them off. So we were very successful in, uh, in doubling our supply chain. And so we've spent a lot of last year, uh, And, of course, you know, this year in the first quarter wrapping things up, but last year building our supply of drugs. Recall that our drug product, remember, it's not approved, so therefore the final drug product doesn't have an economic value and it has to have the expense. And we do that once we release the product. We had a tremendous... we had a fourfold increase in our supply of drug vials, which is important because that's what's allowed us to kind of release the gates and get the enrollment going. But of course, the other side of that coin is that that tremendously increases your R&D expense because that's where it goes. So part of that that you see on the year over year, uh, in the R and D expense is, you know, a fourfold increase in, uh, drug supplies. And that was several million of that, uh, increase. I think that, uh, you know, we would expect the, uh, I don't have a specific forecast, but I know that, uh, the total, uh, you know, development expense, uh, should be in a probably about, uh, maybe the $4 million range going forward, but that's not a studied number. I've prepared a cash budget, but it goes out and laps over into the first quarter of 24. But it should not be that as high as it was simply because we won't have that hard push on building drug inventory.

Great. Well, that was my guess, but I wanted to just go over that with you, and I appreciate you giving us the insight. Happy Friday, and I will get back in the queue.

Okay, thanks. Have a great one.

Thank you. Once again, if you would like to ask a question, please press star and 1. Our next question comes from Jonathan Ashcroft from Roth MKM. Please go ahead with your question.

Thanks. Good morning, Peter. I was wondering, did you just say that your R&D will only be $1 million a quarter? Is that $4 million for the year?

I think that instead of nine, I would expect it to probably be in the five or six range. But I don't have a studied number. What I think I tried to say was it would be down a couple of million from what we saw in the last year. So... because I won't have that large inventory buildup.

Okay. All right. That definitely makes a lot more sense. I was wondering, the venetoclax resistant or intolerant arm for 1001, when might we see data there as well as 102 in CLL?

Okay. The third cohort of the... Phase two trial, is that what you're asking for? Yeah. Yeah, that one, you know, that one's, we've had a lot enrolled, but those are very difficult patients. That would not be middle year. That would be showing up probably in the third or fourth patient quarter. We've had quite a few come through, but, you know, those are, pretty rough patients, and it's harder to find them, quite frankly. But we've had a lot come in, so I think you're looking in the second half of the year for that one. That's the furthest or the slowest of the three cohorts.

Okay. How about the CLL trial with 1002?

The CLL trial, you know, we have, we only need one more patient. We had that patient to complete out that rollout for that first cohort. And we've added two more, including Albert Einstein. It's a pretty good institution, which I understand they have looked at the protocol and think that they can do some good with it. So I think that one, again, I think we've got to go several more months on that because those institutions won't be finally up and running until June so ideally in the third quarter we'll have that third patient and then can report out on that first cohort again the difference with that trial is there's a real it's a low dose starting it's a monotherapy so we don't have a chemo component to it and there's a CAR T trial going on attractive to people who want to try

Okay, and lastly, you said you would file that IND for 1003 this year, right?

That's our goal. We finally, let me just again give the background color on that. What has slowed us down, we've done everything for that. We just have that final second species tox study to do. And to do that, we have to have our PK study available. Again, specific for that, being able to demonstrate that in fact you have drug substance in the animal. We have a successful PK study that has method, I'm sorry, that has worked in our other two drugs. It has not worked in this third drug and we've gone through some analysis. The molecule has a significantly lower melting point than the the other two and we think that it may not be durable enough for the chemical additions and steps that go to when you get a plasma you know from an animal that it can't withstand it and so it interrupts the binding which gives off the signal that detects it so we've had to come up with another technique for the eola detection And we have one now. And in fact, this past two weeks, we've been interviewing some large CROs that have an acceptable method. And they don't have much of a backlog, which is great on their mass spec side of the business that you need to use with this technique. And so we think we can get that round up and going on at the actual level. Animal study will only take two months to test and report. So we think we can make that IND by the end of the year. But that's been the trouble. We've been all set. It's just, you know, we've had to come up with a different technology to be able to detect the presence of the substance in the blood serum.

Thank you very much, Peter. You're welcome.

And, ladies and gentlemen, with that, we've reached the end of today's question and answer session. I'd like to turn the floor back over to Peter for any closing remarks.

Thank you again, everyone, for joining us and for your continued support of BioPath. Have a great day. Thank you.

And, ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for joining. You may now disconnect your lines.