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spk00: Good morning, ladies and gentlemen, and welcome to the Diametica Therapeutics second quarter 2024 conference call. An audio recording of the webcast will be available shortly after the call today on Diametica's website at www.diametica.com in the investor relations section. Before Diametica 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 Cautionary Statement Note Regarding Forward-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 and the Second Quarter Report on Form 10-Q, Diomedica's SEC filings are available at www.sec.gov and on its website. Please also note that any comments made on today's call speak only as of today, August 8, 2024, and may no longer be accurate at the time of any replay or transcript rereading. Diomedica 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, Mr. Rick Pauls, DietMedica's President and Chief Executive Officer. Mr. Pauls, you may begin.
spk05: Thank you, Operator. Hello, everyone, and welcome to our second quarter conference call. I am joined this morning by Dr. Lorianne Masuoka, our Chief Medical Officer, and Scott Kellan, our Chief Financial Officer. We continue to make progress on our Remedy 2 trial, and we believe we're on track for the interim analysis. The level of interest from sites and potential investigators remains high, and we will likely have to turn down some of the sites. I am grateful to our entire team. Everyone is working tirelessly to engage the highest quality research sites and facilitate their participation in the Remedy2 trial. Let me turn you over to Lorianne for a brief update on our stroke program.
spk01: Thanks, Rick. Let me start by echoing Rick's comments. We are making solid progress with our site activation activities, and we are gaining a much-welcomed momentum for the Remedy2 trial. Moving sites through the startup process continues to be very challenging. We believe this is due to the effects of continued staffing shortages at research hospitals. We believe that much of the momentum gain is related to increasingly using our people to lead direct communications with the study sites. Many sites have already noted their appreciation for the responsiveness and clarity in being able to deal directly with Diomedica personnel. As a result, we're seeing more rapid responses from both existing sites and sites working through the startup process. As part of building this momentum, we have identified 15 sites which we believe have the highest potential to rapidly enroll, meaning the ability to enroll multiple participants each month. We have prioritized recruiting and engaging these 15 sites. By the end of this quarter, we expect to have at least nine of those 15 sites active. For perspective, just 15 sites enrolling 1.6 participants each month would get us to our interim analysis enrollment within six months. As part of our ongoing engagement with study sites, we held a meeting of principal investigators and study coordinators on July 18th. The purpose of the meeting was to begin to establish a dialogue amongst the study teams and compare notes on their experiences and build some friendly competition between the study teams. At this meeting, we had a tremendous dialogue with our clinical research teams, getting their thoughts on a variety of sticking points in both the site activation and participant enrollment processes. We continue to work on mitigating or eliminating impediments to increase efficiencies and ensure that study sites feel well supported. I will now turn the call back over to Rick.
spk05: Thank you, Lorianne. Our focus with respect to the Remedy2 trial remains centered on building momentum with high-quality research institutions. Based upon the progress of the team, we believe that we'll be able to achieve full enrollment for the 144 patients for the interim analysis by the end of the first quarter of 2025. This quarter, we were also very excited to announce our next indication and begin discussing the significant benefits that DM-189 may bring to preeclampsia patients in severe hypertensive disorder pregnancy, which currently has no approved therapeutic options in the U.S. or Europe. We believe that DM-189 is uniquely suited in this patient population. Last month, we also had the opportunity to introduce our highly respected preeclampsia research team during a key opinion leader call where they were able to provide their insights and excitement for DM-109 firsthand to treat preeclampsia. We are incredibly fortunate to be working with this team and being able to support them in the conduct of this study without distracting our clinical operations team from a remedy to stroke trial. I'd like to ask Lorianne to speak a little bit more about the preeclampsia program. Lorianne?
spk01: Thanks, Rick. I won't reiterate the information in the press release. If you have specific questions, I'll be happy to answer them during the Q&A. I do, however, want to point out how excited we are to be working with Professor Stephen Tong, MD-PhD from the University of Melbourne, Professor Katherine Kluver, MD-PhD from Stellenbosch University, and Professor Susan Walker, MD-PhD from the University of Melbourne. Globally, this team has one of the highest levels of experience in studying preeclampsia and trialing various potential therapeutics. We are very fortunate to be able to work with them. They graciously participated in a KOL call for us last month. As was discussed at that call, treatment options for preeclampsia are very limited due to risks associated with therapeutics that cross the placental barrier and adversely affect the baby. ACE inhibitors and ARBs, first-line treatments for hypertension, are contraindicated for this very reason. The only recent new treatment to show some potential to lower blood pressure in these women was sildenafil, which augments the nitric oxide signaling pathway. Unfortunately, because it's a small molecule drug, it passes the placental barrier and causes serious issues for the babies. Our research team is highly interested in DM-199 as it has demonstrated the ability to increase production of nitric oxide and other beneficial molecules, including prostacyclin and endothelium-derived hyperpolarizing factors. Given that DM-199 is a large molecule, it is highly unlikely to cross the placental barrier, something confirmed in non-clinical testing. Preeclampsia is usually marked by a rapid spike in blood pressure, potentially causing seizures, stroke, multiple organ failure, and even death of the mother or baby. As of today, the only way to stop disease progression is to deliver the baby, which is oftentimes done prematurely. Preeclampsia and related hypertensive disorders of pregnancy affect 5 to 8% of all births in the U.S., impacting approximately 180 to 300,000 patients annually. and it is growing. Clearly, as we saw two years ago in the Remedy 2 trial, DM-199 has the ability to rapidly reduce blood pressure, and we're optimistic that DM-199 can reduce blood pressure in this population group as well. We also aim to demonstrate that DM-199 dilates the intrauterine arteries and improves blood flow to the placenta. If proven, this would suggest that DM-199 has the potential to be a disease-modifying therapy and enhance fetal growth. We believe DM-199 has first-in-class and best-in-class potential for preeclampsia with the ability to improve outcomes for both the fetus and the mother. And, of course, we don't have to wait long for our initial signals. We expect Professor Kluver to begin enrolling in the fourth quarter of this year with top-line results available sometime in the first half of 2025. After having experienced my own bout of severe preeclampsia, I'm very excited to be part of developing a potential treatment for this potentially life-threatening condition.
spk05: Thank you, Lorraine. It's also important to highlight the efficiency of this trial. From a data standpoint, we'll gain valuable insight into DM-189's potential to lower blood pressure, and dilate the intrauterine arteries in preeclampsia patients, with results in the first half of 2025. Moreover, with our research collaborators conducting the trial, it keeps our clinical operations group focused on the Remedy 2 trial. Now, I'd like to hand the call over to Scott Kellan to review this quarter's financial results.
spk04: Thanks, Rick, and good morning, everyone, and thank you for being part of today's call. We topped up our balance sheet considerably in June with the completion of an $11.8 million private placement with accredited investors, effectively extending our cash runway into Q3 of 2026. Net proceeds from this transaction were approximately $11.7 million. With this financing, our June 30, 2024 combined cash, cash equivalents, and investments increased to $54.1 million, up from $52.9 million as of the end of 2023. Net cash used in operating activities for the six months ended June 30, 2024, was $11.2 million, compared to $10.1 million in the same period of the prior year. The increase in cash used in operating activities was driven primarily by the advance of deposit funds to vendors supporting a Remedy 2 clinical trial during the current year period. Our research and development expenses increased to $3.9 million for the three months ended June 30, 2024, up from $2.5 million in the prior year period. R&D expenses increased to $7.6 million for the six months ended June 30, 2024, compared to $6.2 million for the six months ended June 30, 2023. These increases related to the continuation of our Remedy 2 clinical trial and increased staffing costs driven by the expansion of our clinical team. These increases were partially offset by cost reductions related to clinical trial work completed in 2023, specifically our Phase 1c and Redux trials, and the completion in 2023 of the in-use study work performed to address the clinical hold on our Remedy 2 trial. We expect our R&D expenses to increase moderately relative to recent prior periods, as we globally expand the Remedy 2 trial and site activations and participant enrollment continue. Our general and administrative expenses were $1.7 million for the three months ended June 30, 2024, down from $2.2 million for the three months ended June 30, 2023. G&A expenses were $3.8 million for the six months ended June 30, 2024, down from $4.1 million for the six months ended June 30, 2023. These decreases resulted from the combination of a reduction in the cost of directors' and officers' liability insurance premiums and decreased legal fees incurred in connection with our lawsuit against PRA Netherlands, partially offset by increased personnel costs related to the expanding of our team and an increased non-cash share-based compensation costs. we expect our G&A expenses to remain steady as compared to recent prior periods. Other income net was $526,000 and $1.1 million for the three and six months ended June 30, 2024, respectively, compared to $271,000 and $527,000 for the three and six months ended June 30, 2023, respectively. These increases were driven by increased interest income recognized during the current year periods related to higher marketable securities balances during the current year periods as compared to the same periods in the prior year. With that, let me ask the operator to open the lines for questions.
spk00: Thank you very much. Ladies and gentlemen, you will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. First question comes from Thomas Flayton with Lake Street. Please go ahead.
spk03: Good morning. I appreciate you taking the questions. Rick, just to clarify, or perhaps Loriane, at the end, during your first quarter results call, you indicated that there were eight sites that were active, and I know you're focused on the 15. How many are active and enrolling as we speak?
spk05: Loriane, do you want to take that one?
spk01: Certainly. So, as you may have seen on clinicaltrials.gov, it lists eight sites. There is always a lag between actuals and what is on the clinicaltrials.gov website. We currently have 13 sites activated.
spk03: Great. And is their enrollment pacing the way, at least as good as your conservative estimate for the enrollment, or are they more high-enroller type sites?
spk01: It's a combination of high-enroller sites and sites that we feel are not quite as high-enrolling. We believe we'll have nine out of the 15 high-enrolling, top 15 high-enrolling sites up and running by the end of Q3. So does that answer your question?
spk03: Yeah, that's super helpful. Thank you. And with respect to the preeclampsia study, you guys are in the regulatory process in South Africa right now. Is that being led by you guys or Dr. Kluver and her team, and is it a dynamic process? Do you have any sense of how that's going?
spk01: Yeah, that's being led by Dr. Kluver and her team, and it appears to be going extremely well.
spk03: Excellent. I appreciate you taking the questions. Thank you.
spk00: Our next question comes from Chase Knickerbocker with Craig Hallam. Please go ahead.
spk02: Hi, guys. It's Jacob on for Chase. So just one question for me. Do you feel good about the screening criteria you have in place? Anything causing screening failures that has surprised you?
spk01: We do feel good about our screening process. We are always looking for ways to improve our enrollment rate, and so there may be some future developments coming down the pipe. But at the moment, we feel that we're enrolling a population for whom there is very little or nothing actually that can be done to help them. So this is a very large patient population with no other treatment option.
spk00: And we do not have any further questions at this time. Mr. Pauls, I will turn the call over to you for closing comments.
spk05: All right, thank you. So we'd like to thank everyone for joining us this morning and for your continued support. We look forward to the next update. And with that, this concludes our call today. Thank you.
spk00: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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