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spk03: Good morning, ladies and gentlemen, and welcome to the Diomedica Therapeutics First Quarter 2022 Conference Call. A note of recording of the webcast will be available shortly after the call today on Diomedica's website at www.diomedica.com in the Investor Relations section. Before the company proceeds with its remarks, please note that the company will be making forward-looking statements on today's call. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results, appears in the section entitled Questionary Statement Notes Regarding Form-Looking Statements in the company's press release, issued yesterday and under the heading Risk Factors in Diomedica's most recent annual report on Form 10-K. Diomedica's SEC filings are available at www.sec.gov and on its website. Please note that any comments made on today's call speak only as of today, May 5, 2022, and may no longer be accurate at the time of any replay or transcript rereading. The America disclaims any duty to update its forward-looking statements. Following the prepared remarks, we will open the phone lines for questions. I would now like to introduce your host for today's call, Rick Pauls, the America's President and Chief Executive Officer. Mr. Pauls, you may begin.
spk02: Thank you, Julie. Good morning, everyone, and welcome to our first quarter 2022 conference call. I'm happy to be able to speak with you this morning. I'm joined by Dr. Kirsten Gruss, our Chief Medical Officer, Our CFO, Scott Kelton, is sick today and won't be joining us. I want to start off today addressing the progress in a Remedy 2 stroke trial in which we are studying DM-19's potential to improve the physical recoveries and the rate of stroke reoccurrence in acute ischemic stroke patients who have no current treatment options other than supportive care. Remember, this group represents about half a million patients in the U.S. alone. In the less than two months since our last call on March 15th, We are pleased to share that we have made considerable progress, and I'd like to ask Kirsten to provide a clinical update.
spk04: Thank you, Rick, and good morning, everyone. We've continued to make solid progress on site engagement and activation, which will be key to finishing this trial timely and efficiently. As of our last call, we had four hospital sites activated, meaning able to recruit and enroll patients. Today, we have nine sites activated and are on target to have approximately 17 sites activated by June, which is aligned with our corporate target. Equally as important is recognizing that many hospitals have not been able to restore their research teams to pre-pandemic levels. In a situation where the study team is running below staffing capacity, they understand we have concerns over the adequacy of their staff and their ability to manage the study patient after the patient leaves the hospital. This may result in further uncertainty over the patient being able to receive the full three-week study treatment and can be a barrier to the site enrolling a patient that they would otherwise normally recruit. To address this, we've recently brought on a nationally recognized clinical support service firm to assist us in engaging with those study sites that could benefit from us providing supplemental staff resources to support both the recruitment of patients and the management of the patient's participation in the study as they transition from the hospital to an intermediate care facility and ultimately to their home. From the many discussions we've had with study sites, our advisors and others, we understand that staffing at the study site is the number one issue reported as inhibiting research. In providing assistance to additional staff, we intend to minimize the administrative burden on the physician, the study site coordinator, and the rest of the study team.
spk02: Thank you, Kirsten. So we're very pleased to be getting into a rhythm of bringing hospitals on board and with the clinical team proactively developing creative solutions to drive enrollment in our stroke trial, even as clinical sites continue to deal with staffing issues. As we discussed in our last call, we are prioritizing clinical study sites that have the highest enrollment potential, ideally those that can enroll one plus patient per month. I'm very interested to see if our staffing solution can help sites achieve this type of enrollment rates. So we're deeply committed to advancing DM-19, the first pharmaceutically active synthetic form of KLK1 protein in patients. DM-19 represents a new therapeutic mechanism of action with the potential to offer stroke patients the prospect of improving recoveries and reducing the risk of recurrence. And I want to stress that the urine drive form of the KLK1 protein approved in Asia has been on the market where it has treated several hundred thousand patients since 2005. The results from our first study, Remedy 1, were consistent with the reported results of the urinary KLK1. This is why we're so bullish on DM-199. So let me reiterate that the patient treatment period in our Remedy 2 trial is quite short relative to other trials. Patients are treated for three weeks, and the final follow-up is at 90 days for each stroke patient. We continue to expect that we'll complete the interim analysis for Remedy 2 during 2023. We'll provide more guidance on exactly when we get closer. Turning briefly to our CKD, or our Chronic Kidney Disease Program, we strongly believe in the unique ability of DM-189 to both improve kidney function in patients with CKD and in controlling blood pressure in hypertensive patients by restoring the levels of KLK1. As we mentioned in our last call, we are focused on collecting final data and preparing next steps, including selection of lead cause of CKD that could bring a much needed therapy to patients. We expect the final analysis of the full data set will continue to demonstrate strong signals for the IgE nephropathy and in the hypertensive African-American population. While stroke is our main focus right now, we are developing a plan to move forward with the CKD program. I would like to now provide a review of our financials. We announced our first quarter financial results and filed our quarterly report on Form 10-Q yesterday after the market closed. These documents are available on either Diametica or SEC websites. Let me start with the balance sheet. As of March 31, 2022, Our combined cash and investments totaled $41 million, down $4.1 million from $45.1 million at December 31, 2021. With this strength in our balance sheet, we believe our cash balance will support the clinical development of DM-109 and our operations into early 2024. Research and development expenses for the first three months of 2022 were $2 million, compared with $2.4 million for the first three months of 2021, a decrease of $400,000. This decrease was driven mainly by a reduction in costs related to the Redux CKD trial, which completed patient enrollment in December 2021, and a lower level of DM-189 manufacturing process development work in the current year quarter as compared to the prior year quarter. These decreases were only partially offset by increased costs incurred in a remedy to stroke trial, and higher personnel costs related to the expansion of our clinical team in the current year period. General and administration expenses were $1.6 million for the first three months of 2022, up from $1.2 million for the first three months of 2021. This $400,000 increase resulted from a combination of increased professional service costs, directors and officers liability insurance, and personnel costs incurred. in support of expanding our operations and clinical programs. As you can see, we have made very productive first quarter. We continue to make significant progress in our lead AAS program. We brought on two key members to our management team and continue to expand the sites able to enroll patients in the Remedy 2 trial. Finally, our balance sheet remains strong, and we believe we are well-positioned to execute on the plans we reviewed for you today. With that, we'd like to open the calls to questions. Operator, if you could please introduce the first analyst.
spk03: Thank you. Your first question comes from Thomas Flatton from Lake Street Capital Markets. Please go ahead.
spk06: Thanks. Good morning, guys. From the sites that you already have activated and enrolling, do you have some sense of what enrollment rates look like there or anything you can comment on there just to give us a sense of how productive these sites can be?
spk02: Yeah, Thomas, it's still a little bit early. We're just getting these sites up. Our target has been for our projections for the interim analysis next year is to get to a 0.25 enrollment rate per site per month, so basically one patient per site every four months. So it's still a little bit early, but I think over the coming months we should be able to get more clarity on that enrollment rate And as part of our prepared remarks, you know, we mentioned that as well, we're really targeting here, you know, those sites that we think that have the ability to achieve, you know, one plus site per month.
spk06: And then just to clarify on the interim analysis, I know in the prepared remarks you said in 2023, and I think you just said in early 2023, is it still the goal to have first half of 2023?
spk02: Yeah, so our guidance is 2023, and we're still hoping that that'll be the first half of the year.
spk06: Got it. And then just one more quick question. With respect to the cash runway, what does that contemplate with respect to CKD development? Is there any CKD investment in that cash runway projection?
spk02: Very little. Our cash and our internal focus is really on this stroke trial.
spk06: Great. Appreciate it. Thanks, guys.
spk02: Thanks, Thomas.
spk03: Your next question comes from Alex Nolak from Craig Allen Capital Group. Please go ahead.
spk07: Greg, good morning everyone. Just curious, when did the support service go live for the stroke study? And then what's the incremental cost in the study for adding that firm in?
spk02: So it's really just been the last few weeks getting things up and started. So that expense will really start kicking in here over the next few months. And, you know, it'll be several hundred thousand dollars. But nothing that will, you know, this is part of, this was built into our current budget and in terms of our expected cash out still into early 2024.
spk07: Okay, that's good. And then the pickup in site and active sites that are enrolling now, was this really just a function of you've been talking to these sites for a couple months now and with COVID kind of waning here, they're just actively pursuing more studies? Maybe just a little more detail on the conversation you're having with the sites.
spk02: Yeah, I think it's a combination of both. You know, to get a study set up, I mean, it can easily take six to nine months, depending if it's an academic or just a smaller hospital. So I think it really is a combination of, you know, the work that we've been doing over the last six, nine months. And then, you know, clearly, I think with the reduction in COVID cases and the hospitals having, you know, beds available and a little more resources, we think that this is also contributing to the uptick in insights.
spk07: Understood. And then you've made some very good personnel investments. You're adding the support service in. How should we think about additional investments that need to be made to get ready for stroke, either from a trial enrollment standpoint or getting ready for eventual commercialization here?
spk02: Yeah, so we'll continue to expand our team, but we don't see a a very huge increase in terms of the staff. You know, we have this all kind of built into our current budget. So for us in particular, for our clinical team is really most important right now. It's a balance in terms of the staffing that we have internally with the CRO that we're using to help with the study. In terms of the commercial part, yeah, and then in terms of the commercial part, I mean, in January this year, we brought on Don Condari, our new chief commercial officer, and really just helping to lay out, you know, what are those key things that we need to be thinking about a couple years ahead of a product launch. So that's all going forward, and it's really, it's a balance in terms of, you know, the amount of cash we commit to that now versus as we get closer to a potential launch.
spk07: Excellent. Appreciate the update. Thank you. Thanks, Al.
spk03: Your next question comes from Hasab Rizwa from Oppenheimer. Please go ahead.
spk01: All right, thanks for taking the question. So I was just wondering, just to reiterate, I'm sorry if you mentioned this, but is the total target, you know, total number of sites still expected to be around 75, or has that changed?
spk02: Yeah, so our plan is up to 75. And what we're really focusing on near term was there's a lot of activity happening right now. And so it's really focusing on those sites near term that we think can be higher enrollers. And then, you know, throughout the remaining of the year, we'll, you know, continue to be adding on sites, you know, ideally at a nice pace so that, you know, we can get to that interim analysis next year and then be able to complete the study after.
spk01: And the interim, is that still supposed to be around 140 patients? Yes. Okay. And then last quarter you mentioned, you know, about 10 sites I believe that were under contract and greater than 70% that were engaged in startup phase. Is this, you know, everything's still on track here or just to really make sure that these, you know, the issues related to the pandemic and the staffing has not delayed things additionally here?
spk02: Yeah, the two key variables here are, you know, the first one is, you know, site activation. And so from the time of contracting to, you know, getting the site activated, that can still be another six weeks or so. And so, you know, importantly on our last con call, you know, seven weeks ago now, you know, we were, you know, at four sites that were active. We're at nine today. And our internal target is to be at 17 in June. And then continuing, you know, this pace here until the end of the year. And then the second component is the enrollment rates, the patient rate that's coming in per patient per month, that's 0.25. And there's always upside here. So if that rate can come in higher, that would be great. But importantly, our clinical team has been very active in understanding the challenges of running a clinical trial today in particular with these staffing challenges that we're having at the hospital and bringing in a consulting company to help us to provide those additional resources when these hospitals need it. I think it's really going to help in terms of getting sites on board and having these sites recruit new patients for us.
spk01: Okay, great. And then lastly, did you mention that maybe a few months from now we would have a better idea of how that 0.25 patients per site per month enrollment is going and maybe even color on the sites that you're focusing to do one patient per month?
spk02: Yeah, I think over the coming months we should get some better color here in terms of that enrollment rate. And then as part of that is the additional work specifically with having this home nursing company helping us with support. So we should hopefully over the coming months get more clarity. All right, thank you. Thanks Frank.
spk03: Your next question comes from Eleanor Paros from Roth Capital Partners. Please go ahead.
spk05: Yes, good morning Rick. I think I know the answer to this question but I would like to ask it anyway. Do you see any competing programs at the sites that you identified that may actually interfere with your enrollment?
spk02: No, we're really not. I think more of the studies that are ongoing today that we're seeing are companies that are doing mechanical thrombectomy. And then there's also some studies for tenecteplase which is really more targeting, you know, four and a half hour window. But really for this treatment window, that has not seemed to be an issue.
spk05: Okay. Okay. Thank you. And of the kidney programs, which one do you think, considering the current landscape, is most promising as a partnering candidate?
spk02: Yeah. So we still have an opportunity for both our IgG nephropathy and also in our hypertensive African-American patients. If we, you know, look at, you know, our phase, you know, our basket study and the data we have today, you know, we look at the drops in albinuria in hypertensive African Americans, you know, 50, 60% over three months. We look at the very large drops in blood pressure. We feel that that patient population, and maybe more specifically, one of the things we're looking at is hypertensive nephrosclerosis. So these are patients that are often salt-sensitive, which we think is a key part of our mechanism. So while we're very focused here on the stroke program, quietly behind the scenes here, we're getting some additional feedback on which cause of CKD to move forward. But clearly we see there's a real need for patients with kidney disease And, you know, we think that the key aspect here is that these kidney patients have levels of KLK1. So if we can restore the levels, you know, we think we could potentially have a real treatment option for these patients in great need today.
spk05: Thank you very much, Rick. Thank you, Elmer.
spk03: And there are no further questions at this time. I will turn the call back over to the presenters for closing remarks.
spk02: All right, again, we'd like to thank everyone for joining us this morning. We appreciate your interest in Diametica and your continued support. And with that, this concludes our call today.
spk03: This concludes today's conference call. You may now disconnect. Thanks.
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