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spk10: Good morning, and welcome to BeyondSpring's fourth quarter and year-end 2021 financial results conference call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, April 14, 2022. I will now turn the call over to Ashley Sergio of LifeSciAdvisors.
spk06: Thank you, everyone, for joining today's call. I would like to advise listeners that comments made on today's call may reflect forward-looking statements that are related to such matters as BeyondSpring's clinical and preclinical research and development activities and results, regulatory and commercial plans, industry trends, market potential, collaborative initiatives, and other financial projections, among others. While management believes that its assumptions, expectations, and projections are reasonable in the view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed during this call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of the company's 20-F and other filings with the SEC, which are available on the investor section of BeyondSpring's website. Joining us on today's call is Dr. Lan Huang, BeyondSpring's co-founder, chairman, and chief executive officer, Dr. Ramon Mohanlal, executive vice president, research and development, and chief medical officer, and Elizabeth Serpak, chief financial officer. It is now my pleasure to turn the call over to Dr. Lan Huang.
spk08: Good morning, everyone, and thank you for joining today's call. It's a pleasure to be here today reporting our fourth quarter and year-end results and providing an update on our progress in the past few months. After the complete response letter from the US FDA last November, we took steps to streamline our operations in order to extend the cash runway. Now we are focused on executing near-term opportunities for value creation. First, we are pleased with our ongoing discussions with China NMPA on the review of benevolence NDA in combination with GCSF for the prevention of chemotherapy-induced neutropenia, or CIS. The GCSF market in China is significant with $1.2 billion in sales in 2020 and around 30% annual growth since 2017. In addition, we continue our discussions with the FDA regarding the clinical and regulatory pathway for penicillin in CIN in the US. Second, moving to our penicillin program in non-small cell lung cancer, where we announced in August and September 2021 at ESMO conference positive top-line data from our Phase III Dublin III study. In the second and third line, non-sponsored lung cancer with EGFRY type, which represents severe unmet medical needs with limited treatment options, cannabinoid and docetaxel combinations showed significant improvement in overall survivor, especially in doubling the two-year and three-year survivor rate compared to docetaxel alone. We believe the data supports the role of penicillin as a potential anti-cancer treatment option in this indication. We are moving forward to target an NDA filing in China by year end. Dr. Ramon Mojano, our chief medical officer, will provide additional details during his remarks shortly. Finally, we continue to develop penicillin as a potential pipeline in the drug. Using cost-effective investigator-initiated studies, we continue our development plans for penicillin in immuno-oncology combinations in various cancers. to target unmet medical needs in patients who have failed PD-1 or PD-L1 inhibitors. We continue to see strong interest by investigators and will share additional data and updates as they become available. Overall, we are proud of the support we have received as we continue our efforts to bring Penabalin to market. One of our validating steps was announcing last fall a strategic partnership between Venture Bullying, our 58% owned China subsidiary, and Chi Ray Pharmaceuticals, a leading oncology, R&D, and commercialization company in China, for the development and commercialization of penicillin in greater China. Tenray is a well-respected company with over 10,000 salespeople in China. In 2020, the company had $4.2 billion in sales, of which $2.4 billion was for oncology drug sales. In addition, Tenray has a leading market position with its long-acting GCSF in China. In September 2021, will receive a 200 million renminbi, estimated to be around $31 million upfront payment from Henry, and will be eligible to receive up to 1.1 billion renminbi, estimated to be $171 million in regulatory and sales milestones. We will receive all proceeds from sales of benevolent products and pay Henry a predetermined percentage of such sales. We will provide updates on commercialization plans as we get closer to potential approval in China. In conclusion, we remain committed in bringing Penabalan to market. As Penabalan has a long patent life with patent protection to 2037 in 40 jurisdictions, which includes 19 granted patents in the US, we would have a long, long way to realize penicillin's potential to help many patients in need. One more note, we are making good progress in our subsidiary, Seed Therapeutics. Seed focuses on differentiated molecular blue technology in the targeted protein degradation field. We signed the R&D collaboration agreement on a number of targets with Eli Lilly in November 2020. Now I will turn the call over to Dr. Ramon Mojano, our Chief Medical Officer, for some additional details on our development programs. Ramon.
spk02: Thank you, Lan. I would like to make the following comments regarding the CIM program. First, we firmly believe that a drop works in CIM prevention. We have clinical evidence that planabin increases neutrophil count through a rapid mechanism of action, acting within 24 hours after chemotherapy. This clinical evidence was presented at ASH last year. We have positive data in every single clinical study for CIM that we have conducted, totaling over 1,200 patients in these studies. The data has led to multiple presentations at leading scientific conferences, as well as publications in highly regarded peer-reviewed journals. Although we have positive clinical trial data, we do fall short in satisfying the US FDA's requirement to receive approval at this time. In that, more data will be needed. A second phase 3 CIN study will be required, and we are currently in discussions with the US FDA to align on the design of this study. We are highly committed to bringing Clonabulin for CIN prevention to the market to provide doctors the tools to better protect their patients against CIN, which continues to be a condition with unmet medical needs. Today, CIN continues to cause preventable mortality and suboptimal cancer treatment due to chemotherapy dose reductions necessitated by the occurrence of severe utopia.
spk03: Moving on to non-small cell lung cancer, I would like to make the following point.
spk02: Firstly, we firmly believe that the drug works in non-small cell lung cancer, as well as other cancer indicators. We have strong mechanistic evidence that plenabulin has a dual mechanism of action in cancer. Firstly, plenabulin has immune-enhancing effects that enable the immune system to better fight off the cancer. Secondly, plenabulin has direct anti-cancer effects as a single agent in a number of cancer types. The second point I would like to make We have positive clinical trial data in the Phase III, II, and III study in non-small cell lung cancer and in the Phase I trial in small cell lung cancer conducted with the Big Ten consortium. Data from these trials were presented at ESCO and ESCO last year, respectively. Notably, in the non-small cell lung cancer trial, we had more surviving patients over a time span of four years with the plenabulin plus dosaxel combination compared to standard-of-care dosaxel. In the small-cell long-cancer trial, the addition of plenabulin to nivolumab and ipilimumab more than doubled objective response rate, ORR, at more than 40%, compared to historic controls of nivolumab and ipilimumab alone. Of note, we still have one patient in the trial who failed a prior checkpoint inhibitor and yet continues to benefit from planabin after more than 58 cycles, which for second-line small cell lung cancer is highly exceptional.
spk03: The third point I would like to make regarding the path to approval, what is relevant is the patient population of the trial.
spk02: In Dublin 3, around 87% of the data was derived from China. This has brought into question whether this data sets applicable to the US population without U.S. FDA discussions. This is a topic that not only affects us, but affects many companies that have derived their data primarily from China. In the February ODAC meeting, the review of a BLA for Synthilimab, the FDA committee publicly noted that While it was convinced about the efficacy and safety of the data presented, they would require additional data that is applicable to the US population. Having around 87% of the patients derived from China, however, is a distinct advantage for obtaining approval in China, as the data is highly applicable for Chinese patients. The NDA filing for non-small cell lung cancer in China will therefore be our near-term priority. We, however, will remain committed to continuing our clinical and regulatory discussions in the U.S. and other regions. In addition to the development of flenablin in CIM and non-small cell lung cancer, We are developing penicillin and immunotherapy combinations through a number of phase one slash two IIIT trials that are currently ongoing, and we will share the data as we receive it. With that, I will now turn the call over to Elizabeth, our CFO, for a review of our financials. Elizabeth?
spk07: Thank you, Ramon. I will now briefly discuss our fourth quarter and year-end 2021 financial results. For greater detail to these results, I refer you to our press release issued this morning and to our 20F filing, both of which can be accessed under the Investors section of our website. With that, I will now highlight some of the key financial results. R&D expenses in the fourth quarter of 2021 were $5.8 million compared to $8.4 million in the same period last year. The decrease of $2.6 million was primarily due to lower clinical development expenses and personnel costs, including non-cash share-based compensation expenses. which were partially offset by higher preclinical and professional expenses. G&A expenses were 5.0 million in the fourth quarter of 2021 and included a non-cash credit of 2.0 million related to the reversal of share-based compensation expense. This compares to 10.4 million for the prior year, which included $2.1 million in non-recurring personnel costs. The decrease was primarily driven by lower share-based compensation expense. The net loss attributable to the company in the fourth quarter of 2021 was $9.5 million compared to $17.6 million for the same period last year. For the full year 2021, R&D expenses were $36.9 million compared to $41.8 million for the prior year. The $4.9 million decrease was primarily due to lower clinical development expense and non-cash share-based compensation expense, partially offset by higher personnel costs, preclinical and professional services expenses, as well as a $2.9 million NDA application fee paid to FDA, which is expected to be refunded during the second quarter of 2022. g and a expenses for the full year 2021 were 30.7 million dollars compared to 22.6 million for the prior year the majority of the 8.1 million dollar increase was due to higher pre-commercialization expenses for plenabulin which we do not expect to continue this year there were also increases in personnel costs administrative expenses and other costs which were partially offset by lower non-cash share based compensation expense the net loss attributable to the company for the full year was sixty four point two million dollars compared to sixty one point zero million for the prior year our cash balance at December 31st 2021 was $41.6 million, and we had short-term investments of $30.7 million for a total of $72.4 million, which we believe will be sufficient to support our ongoing operations and clinical programs over the next year. With that, I'll now turn the call back over to Juan for closing remarks. Juan?
spk08: Thank you, Elizabeth. And thank you to everyone who is on the call for your strong support. We're fully committed to bring penicillin to market to help many patients in need, and we continue to believe in its great potential. I would like to open the call for Q&A now. Operator?
spk10: Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
spk03: Thank you. Thank you, and our first question is from the line of Maury Raycroft with Jefferies.
spk10: Please proceed with your question.
spk05: Hi, good morning. Thanks for taking my questions. I wanted to check on the China approval for CIN. You've mentioned that you're in ongoing discussions with China's NMPA for CIN. What kind of feedback on a potential approval decision have you received so far, and is there an update on what the timeframe for approval could look like?
spk08: Thank you so much, Maury, and thank you for supporting us over the years. So the CINDA application is currently under independent review with the China NMPA. As you see, actually, I'm currently in China to work with our China team on the review process. So far, we have had multiple positive meetings with CDE, which is the Center of Drug Evaluation in the NMPA, And we remain hopeful of the potential approval in China. But as also you know, anything dealing with regulatory process has its inherent uncertainties. However, our optimism is based on the strong data generated in Asian patients in the 106 phase 3 study. And we will provide the progress of the discussions with China and MPA in due course.
spk05: Okay, understood. And for non-small cell lung, well, for CIN in the United States, you mentioned running an additional study. Can you elaborate on conversations with FDA on what the additional study in CIN could look like and when that could start?
spk08: Yeah, so I would just turn this question to Ramon. Ramon, would you like to answer this?
spk11: Yes, thank you, Lan. Yes, this is an important question, and we have active discussions ongoing with the U.S. FDA on the design of that study. When we have more clarity, then, of course, we will disclose that. But we are actively discussing this study.
spk05: Understood. And then maybe last question for me, just for non-small cell lung cancer, is there still a path forward in the United States? And when will you learn more about what that path could look like?
spk11: Yes. So also for non-small cell lung cancer, we are in active discussions with the US FDA. Those discussions are ongoing. Obviously, as I mentioned, the data is positive and will remain to be positive. I also pointed out that most of the data was derived from the Chinese population, which is an important topic in our discussions with the US FDA.
spk05: Got it. Okay. I guess would another study be needed there or could the IO studies potentially expand and would that be more of the path forward for non-small cell lung cancer?
spk11: So non-small cell lung cancer second and third line is still tremendous on that medical need because you will be aware that most of the IO agents have moved into first line. which in essence creates an opportunity in second and third line, and that's where we are positioned. So we have posted data with one study, and discussions are ongoing regarding also positioning in second and third line, but separately also, as you indicate, our interest also is in first line with a number of IO combinations, We are active on both fronts. Focus on second and first line, but also strong attention to first line with IO combinations.
spk05: Okay. Okay. Thanks for taking my questions.
spk08: Thank you so much, Mari.
spk10: Our next question comes from the line of Jason Gerbery with Bank of America. Please proceed with your questions.
spk04: Hi. Good morning, everyone. This is Chi. I'm for Jason. Thanks for taking my questions. I guess the first one on the U.S. non-small-cell filing, I just want to confirm, is the second half 2022 filing guidance is off the table right now as you continue your discussion with the FDA? And I'm curious if you have any sort of early feedback from the FDA about, you know, what's the gating factor for the U.S. filing. I understand there's sort of the dynamic of evolving FDA view about the preference for multi-regional clinical trials. I'm curious if that's sort of the driver for that discussion. And I guess thirdly, There is at the Lilly's Innovent Adcom, I think one thing the FDA took issue with sort of data generating in China was based on an older report several years ago, I think from 2016, that maybe there's some data compromise in China trials. And one of the questions they asked the sponsors there were if there's any overlap with their trial size compared to, you know, what is documented in that 2016 report. I understand there are like, you know, a few years have gone by, things have changed, but I'm just curious if there's any overlap between your trial sites and that list of China trials listed in that document. Thank you.
spk08: Well, thank you so much, Qi. I can answer this quickly because Ramon has answered a lot on the non-sponsored lung cancer previously. So first is, yeah, we confirmed that the second half of 2022 filing for non-sponsored lung cancer is for China. For the U.S., I think the current discussion is around the relevance of the 103 patient population to the U.S. patients. So thanks for asking the question regarding the PD-1 agent from Lilly and Innovant, that ODAC meeting. But as we know that China do provide good data with GCP qualities, so we do not see any issues with Our data, as we also use ICOM, which is a global CIO, to conduct the study globally. In China, there are 30 sites there. They're all very well-respected sites, which has passed NMPA inspections. So we are very confident with the quality of our data from China.
spk04: Got it. And if I may just ask one quick follow-up, has the FDA... sort of initiate a conversation that you may need a second trial with some flavor of multi-regional representation, or has that discussion not come up yet?
spk03: No, this discussion did not come up. Thank you. Thank you. Our next question is from the line of Joel Beattie with Baird.
spk10: Please proceed with your question.
spk09: Hi, thanks for taking the questions. The first one is on CIN in the U.S., and you mentioned that there will be a second study needed there. For clarity, could you point out which study the FDA considers as the first study for that setting?
spk08: Thank you so much, Joe, and thanks for your support. And this is a great question. So the first study will be considered is the 106A3 study. We're seeing a combination label.
spk09: Makes sense. Has FDA explicitly said that they consider that study to be a success?
spk08: I think they consider this efficacious data.
spk09: Okay, so it sounds like maybe they've you had a positive tone, yeah, it would still be a review issue at a future point in time?
spk08: Yes, but currently we use the 106 phase III interim data actually got us the breakthrough, and the final data is consistent with the interim data, which is the positive data from the primary endpoint, and also we showed the relevant clinical benefit in the combination compared to the Paxil-Graston alone. So that is efficacious, and also it's safe from what we see from the data in this CIN dose.
spk03: Ramon, you want to add a little bit more? If not, did I answer your question, Joe? Yeah, that's helpful.
spk11: Oh, sorry. Go ahead, Ramon. Sorry, I was on mute. No, I would like to add study model six is a combination study with Trenablin and Paxilgristim. We met the primary endpoint. The data is positive. The data is positive in many different directions. So that, as a study on its own, is a positive study. Obviously, with a new concept, a new paradigm, with a combination approach in CIM, the FDA would like to have a level of robustness, what we already have communicated with you. And to reach that level of robustness, a second study will be needed. The way the data will be looked at is, of course, in totality once that data of the second study has been obtained. Those discussions are ongoing with the US FDA, in particular, regarding the design of the second study.
spk09: Got it. Thanks for that. Switching to non-small cell lung cancer in the U.S., For a trial to support that indication, would it be a matter of conducting a trial similar to Dublin 3 but with US and global patients? Or would there be differences in trial design compared to Dublin 3?
spk08: So a second study is not mentioned within our discussion with US FDA. So the current discussion point is the relevance of the 103 study. for the U.S. population. But even as you see from the ODAC meeting with FDA of this PD-1 from in November, literally, FDA did say there is certain regulatory flexibility in three parts. Number one is our medical needs. Number two is rare disease, and potentially our drug is not in the rare disease point. But number three is novel mode of action, and benevolent does have novel mode of action, so potentially that's That's an area of interest as well.
spk03: I see. Got it. Thank you.
spk10: Our next question comes from the line of Joe Penkin. This is with H.E. Wayne, right? Pleased to see you with your questions.
spk01: Hi, everybody. Good morning. Thanks for taking the question. So I wanted to just focus on CIN as well. So let's start with China. So I just wanted to get a sense, what's the role that Hong Rui is playing in in the regulatory filing discussions in China and maybe a little more detail as you feel as part of your discussions as what you currently view as the rate limiting steps.
spk08: Thank you so much, Joe. Thanks for the great question. So, Hongwei is really an ideal partner for us in China because they have many drugs approved in China and also a lot of them are innovative drugs. So currently we are working together to prepare the answers for the NMPA review questions and they also do attend the meetings with us with the CDE.
spk01: And are there anything to point to as what the key factor is that still needs to be addressed?
spk08: We're still answering some of the review questions from the CFDA, the NMPA. So after those questions are answered, and then they will have final review. But it's a step-wise approach.
spk01: Sure, sure, thank you for that. And then regarding the FDA, I can certainly respect and understand obviously not being able to provide any guidance regarding the design or scope of the second study. So I guess I'll ask this question, and I'm not sure if you can answer it at this point. what are the chances that BeyondSpring will conduct this study on your own versus someone else or in partnership?
spk08: Well, after the design is done, I think we plan to do it ourselves. If there's a partner coming along, I think we'll also be happy to do it together.
spk01: Okay, great. Thank you.
spk03: Thank you. There are no further questions. I'll now turn the call to Dr. Wang for her closing remarks.
spk08: Thank you, everyone, for joining the call today, and thank you for your strong support. We will keep you posted in our upcoming progresses. Thank you, and have a nice day.
spk10: This will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time.
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