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spk02: Good morning and welcome to the Insights Biosciences, Biosciences, Inc. Corporate Update Call. As a reminder, this conference is being recorded. Your hosts today are Dr. Lynn Kirkpatrick, Chief Executive Officer, and Dave Humphrey, Chief Financial Officer. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent forms, 10-Q and 10-K, for a more complete discussion of these factors and other risks, particularly under the heading risk factors. At this time, I'd like to turn the call over to NCIS chief executive officer, Dr. Lynn Kirkpatrick. Lynn?
spk01: Thank you, operator, and good morning, everyone, and thank you for joining us. I'm pleased to welcome you to our corporate update conference call. Before I begin, I want to direct your attention to the slide deck posted and accessible via our investor relations website at IR.NSYS.com. This slide deck is our latest investor presentation, inclusive of the recently released clinical data from the PF614-102 and the PF614-MPAR-101 studies, which I'm very excited to review with you in detail this morning. For those of you who are new to NSYS, are a clinical stage biotech company using sophisticated chemistry to improve drug safety and performance. Our technologies, TAP and MPAR, I'll go into more detail shortly on both, are designed to improve delivery and reduce abuse and overdose of prescription drugs with the goal of creating new classes of prescription medicines that are intended to be powerful and safe. Our focus is to utilize our transformative technologies to address the ongoing opioid crisis. We have applied our chemical approach to a number of opioid and ADHD therapies, and our lead program is an oxycodone product to replace OxyContin in the marketplace. Our lead agent, PF614, has received fast-track status from the FDA And we believe we have a shortened path to registration through the 505 regulatory process. We have over 100 patents issued in 25 countries supported by over 100 million in investments since our inception. We have been progressing our lead products through clinical development and exploring other means to apply our technology. Additionally, I am supported by a strong team to aid me in achieving our goals. One example of the depth of our management bench is the recent addition of Dr. Riley Osmond as our chief medical officer. Dr. Osmond is a highly versatile board-certified neurologist, migraine and pain specialist with over 10 years of experience in both R&D and medical affairs within the pharmaceutical, CRO, and medical device industries. Before I continue with our update, I want to describe our two technology platforms in detail. This will be helpful background before I review the clinical trial results. For those following along in the slide deck, I would like to turn your attention to slides five and six. The first technology, TAP, stands for Trypsin Activated Abuse Protection. Trypsin is a digestive enzyme that is only active in the small intestine. TAP is a chemical modification that inactivates the drugs in the N-size opioid products, including our lead agent, PF614. The chemical modification protects from non-oral abuse, provides resistance to manipulation of our products, and is meant to reduce other forms of recreational drug abuse. The second technology platform, MPAR, stands for Multi-Pill Abuse Resistance. MPAR is a smart overdose protection platform designed to be combined with our top pro drugs to prevent patients or abusers from overdosing. This protection from oral overdose exists only when more than the prescribed dose is taken. Importantly, applying our technologies to opioids does not limit the ability of our product to provide a high degree of pain relief for those in severe pain. Opioids have been used for thousands of years. Ensize believes it will introduce a new class of opioids that are differentiated from the abuse deterrent formulations, or ADFs, that had been marketed for over 20 years. These ADFs did not solve the crisis of opioid abuse, as the numbers dying from opioid-related deaths have been increasing despite this approach that was designed to limit abuse. The market is huge for painkillers, both in the U.S. and globally, evident on slide eight. Looking at slide nine, you will see Ensise has an extensive patent portfolio that may allow us to explore opportunities of our tap and impart products outside the U.S. Now for the primary purpose of our call today. While we'll touch on our financials from our last week's earnings release during this call, I will take this opportunity to review how our technology works and to show the recently reported data from our PF-614-102 and PF-614-MPAR-101 clinical studies. presented this data at the 22nd Annual SMI Pain Therapeutics Conference in London, UK on May 5th of this year. Slides 11 through 18 summarize how TAP and MPAR work and give some examples of our animal data that supported the development of these abuse and overdose protection technologies. On slide 12, we see that our TAP prodrugs, or trypsin-activated abuse protection prodrugs, need to be swallowed and exposed to trypsin in a small intestine to activate and release the opioid. This feature, directly correlated with the mission of NSAIDs, reduces the ability to abuse by chewing, manipulating and snorting, or injecting our opioids. Slide 13 and 14 demonstrate how we are very different from the abuse deterrent formulated products that can be manipulated to release the opioid faster than designed. I believe it's important to point out the ADFs have been unsuccessful, thus proving the growing need for our chemical approach. Moving on, our NPAR technology is designed to prevent overdose. MPAR, or multi-pill abuse resistant, is a combination product of a cap opioid with a trypsin inhibitor called nifamistat. When a prescribed dose is taken, the opioid is released as designed. If too much is taken, as when one forgets they've taken the medication and doubles the dose by accident, or if it's intentionally taken in overdose to try to get high, the increasing amount of nifamistat present is able to block the first step of the activation process until the material passes out of the body unchanged. This is illustrated with animal data on slide 17. Slide 18 shows the data from our previously completed Phase I study that demonstrated orally administered PF6 and 4 converted efficiently to oxycodone, It released oxycodone in a dose-dependent manner, and it was found to be safe. Importantly, as demonstrated on slide 19, we found that PF614 has a longer half-life as compared to OxyContin, which was an unexpected result at the time. This longer half-life will provide what we believe will be a true twice-a-day product. OxyContin is prescribed twice a day, and reimbursed for twice-a-day dosing, but it does not last twice a day. So patients start taking the product more often, beginning a path that may lead to further abuse. While we have progressed nicely against our intended goals, I would like to turn your attention to slide 20, which illustrates the clinical trials currently in process or planned for 2022. I will provide updates on PF614-102 and PF614-MPAR-101. Additionally, clinical trials to evaluate PF614 are in the process of being initiated in the second and third quarters of 2022, including two human abuse liability or house studies that will be key for gaining abuse deterrent labeling. The studies will help us further understand the tendencies for drug abusers to like the effect achieved after taking PF614 either orally or nasally by snorting as compared to that of similar products, for example, crushed OxyContin. PF614-102 was a two-part study to evaluate the pharmacokinetics and safety of twice-daily oral doses of PF614 compared to similar doses of OxyContin in healthy subjects. The second part of the study evaluated single oral doses of PF614 compared to OxyContin for bioequivalents, again, in healthy adult subjects. We reported the data from the first part of the study where groups of six subjects received PF614, while two subjects received OxyContin ER twice daily for five days at three different dose levels. The doses selected had been determined from a Phase I work to be bioequivalent, PF614 administered at 50, 100, and 200 milligrams, corresponding to OxyContin at 20, 40, and 80 milligrams. The endpoints of this study were safety and pharmacokinetics of released Oxycodone or PF614. Firstly, and importantly, there were limited treatment emergence adverse events, meaning potential side effects for the administration of either PF614 or OxyContin. These events were similar for both treatment groups at each dose level. Mainly, we observed opioid-related events such as nausea, emesis, headache, dizziness, and constipation. On slide 23, you will see the pharmacokinetic data that confirmed our Phase I data and showed that oxycodone released from PF614 or oxycontin produced very similar concentration versus time curves at each corresponding dose level. Cmax or maximal blood concentrations on day one and day five were also similar as shown on slide 24. Similarly, the area under the concentration versus time curve or AUC On day one, we're similar for PF614 and OxyContin on slide 25. Yet on day five, we did see separation as expected due to the longer half-life of Oxycodone delivered from PF614 versus that from OxyContin. Although OxyContin did show some accumulation over time, that scene with PF614 was more pronounced demonstrated on slide 26. This was a study with limited number of subjects, so we are now awaiting the data from the more extensive bioequivalent study, which was part two of the 102 trial. The second study that started enrolling subjects in December of 2001 on slide 27 was the phase one PF614 MPAR 101 to evaluate our approach to reduce drug oral overdose. Again, PS614 mPAR is a combination product of PS614 and nifamistat to provide protection from both abuse and overdose that we believe should speak in the industry. PK data reported here was from the first group of healthy subjects that were in PS614 alone. Six of both subjects returned to receive for inflammation with two milligrams of nifamistat, a simulated overdose situation. The initial pharmacokinetic data for this study is shown in slide 28. On the left of the slide, the blood levels of oxycodone released from PF614 when administered alone are shown in blue. When PF614 and nifamistat are combined to simulate an overdose situation, the oxycodone blood levels are shown in green. These data demonstrated a 47% reduction in the oxycodone maximal blood concentration due to nifamistat inhibition of the trypsin activation of PF614. The right-hand figure shows the corresponding blood concentration of the PF614 itself. When administered alone, the majority of PF614 is converted to oxycodone with little parent prodrug absorbed unchanged, which is the blue line. When in an overdose situation, the nifamistat present prevents the activation of PF614 and and more unchanged drug is absorbed, as shown by the green line. It is important to note that the PS614, when absorbed directly into the blood, is not converted to oxycodone, showing that attempts to abuse PS614 by direct injection will be unsuccessful. We are very excited with this data as the MPAR combination technology is the first approach that we expect may prevent all four forms of abuse, injecting, chewing, inhaling, and oral overdose. Additional data is expected by fourth quarter of this year and will aid design of additional studies of PF614 MPAR in 2023. Along with our current clinical study of PF614, our top opioid with abuse protection, this study of PF614 MPAR with added oral overdose protection will enhance our dual-prong approach to provide safer solutions to patients and prescribers. The National Institute on Drug Abuse grant of $2.8 million that we received in 2021 supports this clinical study. I'm very pleased with our progress towards bringing our lead next-generation opioids to market. To date, we have successfully hit major milestones for the company and a major step toward providing safer options for doctors and patients. I will now turn the call over to Dave Humphrey, our Chief Financial Officer, to discuss the financials. Dave?
spk06: Thank you, Lynn. going to touch on our financials at a very high level a full breakdown is available in our regulatory filings and in the press release that crossed the wire last week on may 12th starting with revenues funding under federal grants was 0.6 million dollars for the first quarter of 2022 up from 0.3 million for the first quarter of 2021. this quarterly increase is attributable to an additional 0.4 million of funding under the impar grant offset by a decrease of $0.1 million under the OUD, Opioid Use Disorder Grant, due to the timing of research activities eligible for funding. Now looking at operating expenses, our research and development expenses for the first quarter of 2022 increased to $3.1 million from $0.3 million in the 2021 first quarter, primarily the result of increased external research and development costs related to preclinical and clinical programs for PF614 and PF614 MPAR, as Lynn discussed. General and administrative expenses for the first quarter of 2022 of $2.3 million represents an increase from $0.5 million in the same period of 2021, a result of increased expenses related to operating as a public company, including legal and accounting fees, as well as director and officer insurance expenses. Shifting to non-operating expenses, total other income expense for the first quarter of 2022 was $3.9 million of income compared to $0.4 million of expense in the first quarter of last year. The increase in other income was primarily related to non-cash valuation adjustments of current obligations of the company, including convertible notes and related warrants, while the 2021 expense primarily reflects non-cash interest expense on notes that were converted in common stock on June 30th, 2021. Overall, our net loss for the first quarter of 2022 totaled $1 million compared to a net loss of $0.9 million for the comparable year-ago period. As we are a clinical stage biotech company, development of our product candidates is expected to continue, resulting in expected losses for the foreseeable future. Turning to cash, we ended the first quarter of 2022 with $8.4 million in cash and cash equivalents. Cash used in operating activities for the first quarter of 2022 totaled $3.4 million, resulting from the clinical advancement of our product candidates and increased costs related to operating as a public company. In addition to our cash balance, remaining funding from approved federal grants totaled $4.1 million at the end of the first quarter. On July 1st, we also expect to be formally awarded the fourth year of grant funding for the MPAR program for $2.8 million. These funds would help support the continued clinical development of PS614 MPAR. As a clinical stage biotech company, we remain committed to investing in our clinical trials and development activities to support our continued path towards regulatory approval and commercialization. As I have previously stated, our management team, along with our board of directors, regularly conducts extensive reviews of our operations and development pipeline. We are carefully watching our cash, and we estimate that our cash burn will be approximately $4 million on a quarterly basis. Our plans reflect that our estimated runway of current cash resources takes us into the fourth quarter of this year. As we execute upon our mission, it is also our intent to align with our shareholders, and we remain committed to maximizing the value our shareholders hold as we consider our ongoing capital need.
spk03: I will now turn the call back to Lynn for closing thoughts.
spk01: Thanks, Dave. In summary, we're very pleased with the results of our recently concluded clinical studies positioning us closer to commercialization. 2022 is capitalizing on the momentum achieved in 2021 in which we made significant advances for our TAP and MPAR platforms. Our revolutionary abuse-resistant opioids are designed to combat prescription drug abuse, a problem that continues to be a major concern in the U.S. Although we feel we've made significant strides to date, there's much work to be done. As I laid out in my presentation, the near-term path ahead consists of the human abuse liability studies to determine labeling claims for PF614 scheduled to initiate in this quarter. We expect to report data from the nasal study by the end of the third quarter and the oral study the first quarter of 2023. We expect to report on safety and additional pharmacokinetic data from the phase one study of PF614 and PAR in the fourth quarter of this year. I look forward to providing our shareholders with further updates in the near term as we move towards commercialization. I thank you all for attending. I would now like to hand the call over to the operator to begin our question and answer session. Operator?
spk02: Thank you. And at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys.
spk03: One moment, please, while we poll for questions. Our first question comes from the line of Thomas Flatton with Lake Street Capital Markets.
spk02: Please proceed with your question.
spk04: Hey, good morning. I appreciate you guys taking the questions. Lynn, with respect to the five-day AUC, you noted there was a gap between PF614 and OxyContin. Is there an upper limit there that kind of keeps you under the radar? I'm just trying to think about how the regulators will look at that AUC differential based on the half-life. Can you just talk about your thoughts on that?
spk01: Yeah, we believe we were on steady stage. We're still evaluating that, Thomas. We're really, with the few number of subjects, obviously only two in the OxyContin arm, we will evaluate and certainly I don't believe We are going to see much more in the accumulation based on the fact that we should be at steady state by this day five data, but we will be evaluating this in obviously our larger trials.
spk04: And then switching gears a little bit, with respect to FDA, obviously we still need to clarify the 505 question. but from a FDA meeting engagement, will that be post the second human abuse liability study? So maybe second or third quarter of next year? Or how should we think about timing and content of that meeting and potential outcomes as well?
spk01: Yeah, we really do believe we will be in front of the FDA in 2023, really for what we refer to as the end of phase two study. We're hoping in the first half, it depends on delays with the agency. With that, we'll be discussing the path, but the comments that we have had from the agency have indicated if we do not reach bioequivalence, we're still only required to do one phase three study. We're in discussions with what that study will look like and anticipate we will be able to initiate that. starting in 2023.
spk04: Got it. And then, Dave, it looks like some of the converts converted given the share count increase. Is the expectation that the remainder of those notes will convert in the near term?
spk06: Yes, we did have a fair amount of the notes converted in the first quarter. And as you recall from the terms of the convertible notes, there are monthly redemptions. So each month additional parts of the note are converting into common stock, and we expect that to continue and to complete in the near term.
spk05: Got it. Got it. And then just a quick clarification. The oral –
spk04: Human Abuse Liability Study looks like it spans two quarters versus the intranasal one quarter. Is that just months or is there some reason that one would take longer than the other?
spk01: It's just really the starting of the timing and the nasal study is evaluating three different groups. One dose of PF614, one dose of a comparator and a placebo. The oral study is comparing five different groups, so it will take longer. We're anticipating also the number of subjects may be different, although that is just being looked at right now with our stats group. So I'm not entirely sure of the subject number, but it's mainly the difference in the number of subject groups. So all of the subjects will be evaluating three different conditions in the nasal study versus five conditions in the oral study.
spk05: Got it. Appreciate it. Thanks for taking the questions.
spk01: Thanks, Thomas.
spk02: And we have reached the end of the question and answer session. I'll now turn the call back over to Dr. Lynn Kirkpatrick for her closing remarks.
spk01: Thank you, Operator, and thank you for joining us today. I look forward to updating you as we progress on our clinical trials and have additional data to review. In the interim, if you are unable to answer any of your questions, please reach out to our IR firm, MZ Group, who would be more than happy to assist. Thank you very much.
spk02: And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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