Bio-Path Holdings, Inc.

Good morning, ladies and gentlemen. Welcome to the Biopath Holdings first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we'll open the call up for your questions. Please also note today's event is being recorded. 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 first quarter 2023 financial results and to provide an update on recent pipeline and corporate developments. Earlier this morning, we issued a press release which outlines the topics that we plan to discuss on today's call, and that press 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.

Thanks, Will. Good morning, everyone. and thank you for joining us. Throughout the first quarter and in recent weeks, we continue to make important progress advancing our clinical programs as we await top-line results from several key cohorts. Despite advances in the field, cancer deaths continue to rise. We believe our de-enabilized platform can overcome the challenges with current treatment options to address the urgent need for safe and effective new treatments. I'll begin with a review of our Phase 1-1B clinical trial of 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 tool kit. BP1001-A is a modified product from Prexagibiricin 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 in solid tumor patients. Patients diagnosed with recurrent ovarian or 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, Prexager-Burrison. We continue to make significant progress advancing stage two of our phase two clinical trial of Prexager-Burrison for the treatment of acute myeloid leukemia, or AML, in combination with frontline therapy, Dacitabine and Venetoclax. The amended stage two of this phase two trial in AML is an open-label, two-stage, multi-center study of Prexager-Burison in combination with Dacitabine 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 intolerant with the two-drug combination of Prexidivirazine and Decidivine. 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 hematologic recovery. An interim analysis will be performed on each cohort to assist the safety and efficacy of the treatment. In the coming weeks around mid-year, we will assess the initial safety and efficacy of this combination therapy with the potential to qualify for expedited 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. Netoclax has shown activity against anti-apoptotic protein BCL-2 and works by neutralizing the protein's BH3 domain. It is an improved 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 VH3 domain mutation over time. BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the VH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who have previously received venetoclax treatments. A total of six evaluable patients will be treated with BP1002 monotherapy in a standard 3 plus 3 design with a starting dose of 20 milligrams per square meter. The approved treatment cycle is two doses per week or four weeks. 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 in refractory relapsed AML patients. We expect cohort 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 tumor genetic processes, such as tumor proliferation, metastasis, and drug resistance. Its overexpression and aberrant activation characterize many cancers, including breast, lung, ovarian, liver, and colon cancer. Activation of STAT3 pathway in breast and ovarian cancer cells promotes tumor initiation, migration, and taxol resistance. STAT3 also promotes 5-Fmu resistance in colorectal cancer cells. Its role in numerous malignancies made STAT3 a potential cancer therapeutic target. 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 Taxol and 5-FU. These results are in line with previous work in which BP1003 plus gemcitabine displayed enhanced antitumor activity in 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 or early 2024. 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 $5.3 million, or 66 cents per share, for the three months ended March 31, 2023, compared to a net loss of $3.4 million, or 47 cents per share, for the three months ended March 31, 2022. Research and development expense for the three months ended March 31st, 2023 increased to 4.0 million compared to 2.1 million for the three months ended March 31st, 2022, primarily due to manufacturing expenses related to drug product releases during the quarter. General and administrative expense for both the three months ended March 31st, 2023 and March 31st, 2022 was 1.3 million. As of March 31st, 2023, the company had cash of $6.7 million compared to $10.4 million as of December 31st, 2022. Net cash used in operating activities for the three months ended March 31st, 2023 was $3.7 million compared to $2.5 million for the comparable period in 2022. With that, I'll now turn the call back over to Peter.

Thanks, Anthony. Throughout the first quarter, we continue to advance our mission to deliver a better path for cancer patients. With ongoing progress across the multiple of our de-enabilized antisense RNAi nanoparticle drug candidates, we are bringing a gentler solution to fight against cancers. We have a data-rich year ahead, and I look forward to reporting on our progress. 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 one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing numbers to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Jonathan Ashkoff from Roth MKM. Please go ahead with your question.

Once again if you would like to join the question queue, please press star and 1.

Mr. Ashcroft, you may ask your question.

Thank you. So whatever was happening is done happening? Great. No problem. Thank you, guys. Can you please give me any timing for data coming from the 1002 trial in lymphoma slash CLL at those various centers where it's occurring?

That was hard to predict, but we've... Added two more sites, and at this point, I would like to complete that first cohort, which is just one more patient. We previously had a third patient, but that one ended up not passing the screening. Hard to predict, but we do have a couple of new sites that are coming on. So we get this next patient, we'll be able to go up a dose level.

Okay. Given this connection is pretty bad, I'll just try to get through this quick. How about progress on making any better assay to detect 1003 in blood?

We have that now. We've selected the supplier, and we will start that. having that assay, we'll be able to do our pharmacokinetics and then complete that remaining tox study so that we can, the rest of the IND work has been done so we can get going on it. So the answer is it's selected. We can start within the next month or two.

Okay, is cash runway still first quarter 24?

Well, we're going to raise more cash. You know, with the existing supply I have, you know, it'd be into the start of the fourth quarter. But, you know, we plan to raise more cash.

Okay, the last one is that... In a note I wrote last, I said that the 2023 R&D would be less than 2022, but is that true, or did some manufacturing costs from late 2022 fall into the first quarter of 2023? And I guess if that's true, and that's why that's such a big number, what does total R&D spend look like over 2023? That number, I think, for 2Q is 2.1 million.

There's a small interval around that, but that's the midpoint expected value. So that's down a bit from 1Q. Again, what drives that number has been the buildup, ramp up in drug supply once we got our manufacturers to where they could start delivering. You know, it's a long time, our interval for a batch, from start, let alone the queue of getting that, is about nine months because you have to have a batch of drug substance, the antisense, get done. It takes a couple of months to have that reviewed and then released, and then that releases as basically raw material input into the final drug product manufacturing process. and that goes, and that has at least a couple of months for it. So all of that is carried in the prepaid drug product for testing on the balance sheet, and then once it's finally released, it drops to expense. Again, our final product doesn't have monetary value, even though you know, hard for me to accept because it's not an approved drug. So once that product releases to us completely, uh, then it drops to expense. So just the timing of the manufacturing buildup, uh, recovering from the difficulties we had, uh, with our manufacturers and the COVID environment, that's what created the kind of the blurb. We should be able to start getting back to, uh, normal rhythms, so to speak, in the R&D expense. And like I said, the estimated value is 2.9, which would be down, I think, a million from the prior quarter.

I thought you said 2.1 million would be the R&D than this quarter. For second quarter of 23, I thought you said 2.1. What you mean is 2.9?

yes okay thank you very much peter that was that was good clarity you're welcome once again if you would like to ask a question please press star and one to withdraw your questions you may press star and two and ladies and gentlemen at this time in showing no additional questions i'd like to turn the floor back over to the management team for any closing remarks

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

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines. Thank you. Thank you. Thank you. you Good morning, ladies and gentlemen. Welcome to the Biopath Holdings first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we'll open the call up for your questions. Please also note today's event is being recorded. 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 first quarter 2023 financial results and to provide an update on recent pipeline and corporate developments. Earlier this morning, we issued a press release which outlines the topics that we plan to discuss on today's call, and that press 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.

Thanks, Will. Good morning, everyone. and thank you for joining us. Throughout the first quarter and in recent weeks, we continue to make important progress advancing our clinical programs as we await top-line results from several key cohorts. Despite advances in the field, cancer deaths continue to rise. We believe our de-enabilized platform can overcome the challenges with current treatment options to address the urgent need for safe and effective new treatments. I'll begin with a review of our Phase 1-1B clinical trial of 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 Prexagibiricin 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 in solid tumor patients. Patients diagnosed with recurrent ovarian or 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, Prexager-Burrison. We continue to make significant progress advancing stage two of our phase two clinical trial of Prexager-Burrison for the treatment of acute myeloid leukemia, or AML, in combination with frontline therapy, the Cytobin and Venetoclax. The amended stage two of this phase two trial in AML is an open-label, two-stage, multi-center study of Prexager-Burison in combination with the Cytobin 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 intolerant with the two-drug combination of prexycobirucin and dacitabine. 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 hematologic recovery. An interim analysis will be performed on each cohort to assist the safety and efficacy of the treatment. In the coming weeks around mid-year, we will assess the initial safety and efficacy of this combination therapy with the potential to qualify for expedited 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. Netoclax has shown activity against anti-apoptotic protein BCL-2 and works by neutralizing the protein's BH3 domain. It is an improved 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 VH3 domain mutation over time. BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the VH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who have previously received venetoclax treatments. A total of six evaluable patients will be treated with BP1002 monotherapy in a standard 3 plus 3 design with a starting dose of 20 milligrams per square meter. The approved treatment cycle is two doses per week or more. 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 in refractory relapsed AML patients. We expect cohort 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 tumor genetic processes, such as tumor proliferation, metastasis, and drug resistance. Its overexpression and aberrant activation characterize many cancers, including breast, lung, ovarian, liver, and colon cancer. Activation of 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 target. 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 Taxol and 5-FU. These results are in line with previous work in which BP1003 plus gemcitabine displayed enhanced antitumor activity in 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 or early 2024. 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 $5.3 million, or 66 cents per share, for the three months ended March 31, 2023, compared to a net loss of $3.4 million, or 47 cents per share, for the three months ended March 31, 2022. Research and development expense for the three months ended March 31st, 2023 increased to 4.0 million compared to 2.1 million for the three months ended March 31st, 2022, primarily due to manufacturing expenses related to drug product releases during the quarter. General and administrative expense for both the three months ended March 31st, 2023 and March 31st, 2022 was 1.3 million. As of March 31st, 2023, the company had cash of $6.7 million compared to $10.4 million as of December 31st, 2022. Net cash used in operating activities for the three months ended March 31st, 2023 was $3.7 million compared to $2.5 million for the comparable period in 2022. With that, I'll now turn the call back over to Peter.

Thanks, Anthony. Throughout the first quarter, we continue to advance our mission to deliver a better path for cancer patients. With ongoing progress across the multiple of our de-enabilized antisense RNAi nanoparticle drug candidates, we are bringing a gentler solution to fight against cancers. We have a data-rich year ahead, and I look forward to reporting on our progress. 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 one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing numbers to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Jonathan Ashcroft from Roth MKM. Please go ahead with your question.

Mr. Ashcroft, you may ask your question.

Thank you. So whatever was happening is done happening?

Great. No problem.

Thank you, guys. Can you please give me any timing for data coming from the 1002 trial in lymphoma slash CLL at those various centers where it's occurring?

That was hard to predict, but we've added two more sites, and at this point, you know, I'm thinking... We'd like to complete that first cohort, which is just one more patient. And we previously had a third patient, but that one ended up not past screening. So hard to predict, but we do have a couple of new sites that are coming on. So we get this next patient, we'll be able to go up a dose level.

Okay. Given this connection's pretty bad, I'll just try to get through this quick. How about progress on making any better assay to detect 1003 in blood?

We have that now. We've selected the supplier, and we will start that. Having that assay, we'll be able to do our pharmacokinetics and then complete that remaining tox study so that we can, uh, the rest of the IND work has been done so, uh, we can get going on it. So the answer is it's selected. Uh, we can start within the next month or two.

Okay. Is cash runway still first quarter 24? Um,

Well, we're going to raise more cash. You know, with the existing supply I have, you know, it'd be into the start of the fourth quarter. But, you know, we plan to raise more cash.

Okay. The last one is that in a note I wrote last, I said that the 2023 R&D would be less than 2022. But is that true, or did some manufacturing costs from late 2022 fall? the first quarter of 23. And I guess if that's true, and that's why that's such a big number, what does total R&D spend look like over 2023?

I think for 2Q is 2.1 mil. There's a small interval around that, but that's midpoint expected value. So that's down a bit from 1Q. Again, what drives that number? has been the build-up, ramp-up in drug supply once we got our manufacturers to where they could start delivering. You know, it's a long time, our interval for a batch from start, let alone the queue of getting to that, is about nine months because you have to have a batch of drug substance, the antisense, get done. It takes a couple of months to to have that reviewed and then released. And then that releases as basically raw material input into the final drug product manufacturing. And that goes and that has at least a couple of months for it. So all of that is carried in the prepaid drug product for testing on the balance sheet. And then once it's finally released, it drops to expense. Again, our final product doesn't have monetary value, even though it's hard for me to accept because it's not an approved drug. So once that product releases to us completely, then it drops to expense. So just the timing of the manufacturing buildup recovering from the difficulties we had with our manufacturers and the COVID environment. That's what created kind of the blurb. We should be able to start getting back to normal rhythms, so to speak, in the R&D expense. And like I said, the estimated value is 2.9, which would be down 2%. I think a million from the prior quarter.

I thought you said 2.1 million would be the R&D then this quarter. For 2. Second quarter of 23, I thought you said 2.1. What you mean is 2.9? Yes. Okay. Thank you very much, Peter. That was good clarity.

You're welcome.

Once again, if you would like to ask a question, please press star and 1. To withdraw your questions, you may press star and two. And ladies and gentlemen, at this time, in showing no additional questions, I'd like to turn the floor back over to the management team for any closing remarks.

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

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