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spk03: Good morning and welcome to the Intensity Therapeutics second quarter 2023 conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference call over to our host, Michael Miller of RX Communications. Please go ahead.
spk02: Thank you, operator. Good morning, and thank you for joining the Intensity Therapeutics conference call to review the financial and operating results for the second quarter ended June 30th, 2023. I'm joined today by Lewis H. Bender, Founder and Chief Executive Officer, and John Wesolowski, Chief Financial Officer. As a reminder, this conference call contains forward-looking statements within the meaning of the federal securities laws. The company's actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that might cause actual results to differ materially from those in the forward-looking statements is contained in the company's periodic reports filed with the Securities and Exchange Commission. The information presented today is time sensitive and is accurate only as the date of this call, August 14th, 2023. If any portion of this call is being rebroadcast, retransmitted, or redistributed at a later date, Intensity Therapeutics will not be reviewing or updating this material. I would now like to turn the call over to Mr. Bender. Please go ahead, Lou.
spk04: Thank you, Mike. Good morning, everyone, and thank you for joining us today. We appreciate your interest in this inaugural Intensity Therapeutics earnings call. As Mike mentioned, I'm Lew Bender, and I'm the founder and CEO of Intensity Therapeutics. On today's call, we plan to review our financials for the quarter, discuss the origins of our novel technology, explain the science behind our locally delivered drug, and why our product candidate has the potential to succeed in metastatic disease, such as sarcoma, as well as local disease in areas such as breast cancer. I shall also discuss our programs to treat sarcoma and early stage breast cancer, review our quarterly business results, provide details into our current development activities, and our objective today really is to explain how our lead drug, INT230-6, could be a very new weapon in the war on cancer. Now, as everyone knows, the financing environment for healthcare has been and continues to be challenging. I believe that there have been only seven biotech IPOs with a raise of over 20 million so far in 2023. And that being said, I believe investors will respond to data. And the data that we presented in Q2 at ASCO was strong. And as a result, we were able to complete an upsized oversubscribed IPO at the top of the range. I'm very excited by that. I'm even more relieved that we were able to do it. But to go into more detail and about our financial for Q2, I shall turn the call over to John Wieselowski, our CFO and principal accounting officer.
spk00: The highlight of our second quarter was our initial public offering. which was priced on June 29th and began trading on NASDAQ on June 30th. 3.9 million base shares at an IPO price of $5 per share resulted in gross proceeds of $19.5 million. The $5 price was at the high end of our price range. After the underwriter fees and expenses were deducted, we netted $17.8 million in cash, which we received on July 5th. On July 7th, we received the net proceeds of the full over allotment shares, which net us $2.7 million in cash. The over allotment is recorded in July. The combined IPO and over allotment totals approximately $20.5 million in cash. This provides us with sufficient cash to fund our current plans through July 2025. At the IPO, all of our notes were extinguished into common stock and all of our preferred stock converted into common stock. Also, as part of the anti-dilution provisions in shareholder agreements, Series B and Series C preferred stockholders received shares of common stock since the IPO price was below the issue prices of Series B and Series C preferred shares. On the statement of operations in the non-operating section, there is a loss on debt extinguishment of $2.26 million. The notes, as part of their agreements, converted at either a 30 or 35 percent discount to the IPO price. This discount is the loss, since the resulting share is needed to be recorded at the full IPO price. This non-operating loss does not involve cash and is therefore added back to the loss on the statement of cash flows. On the statement of operations below net loss is a preferred stock deemed dividend of $1.3 million. This is the fair value of the shares issued under the anti-dilution provisions of the Series B and Series C shareholder agreements. In the statement of operations, you will see significant reductions in both research and development costs and general and administrative costs. The research and development expense decreased from $1.4 million in Q2 2022 to $0.9 million in Q2 2023. The 38 percent decrease reflects the studies IT01 and IT02 no longer having patient care costs. These two studies continue to incur costs related to the drafting of results. Studies IT03, the sarcoma phase three, and IT04, the next breast cancer study, will continue to incur planning costs, multiple regulatory filing costs, manufacturing of a new batch of our drug, and study initiation costs in 2023. The general administrative expenses decreased from $544,000 in Q2 2022 to $363,000 in Q2 2023. The decrease is primarily due to the prior year having higher costs related to SEC filings and expenses related to S-1s. The accounting services and legal costs related to the IPO in 2023 were charged directly to the equity section of the balance sheet as a reduction of additional paid-in capital. Interest expense on the convertible notes for the three months ending June 30, 2023 was $222,000 as compared to $15,000 for the three months ending June 30, 2022. The increase is due to the execution of additional notes in 2023 and the write-off of stock warrant costs related to convertible notes which were extinguished. We signed a new lease in July 2023 for office space in Shelton, Connecticut, in order to be closer to Connecticut's rapidly growing biotech hub in New Haven. This move lowers our rent costs considerably and should increase our potential to recruit new staff. We will complete the move into the new office space this month. I turn the call back to Luke. Thank you, John.
spk04: You know, for many patients today, cancer treatments in general are ineffective. Local therapies such as radiation or ablation are really unsuitable for treating metastatic disease or even large tumors alone. Because these modalities lack the ability to cause a systemic or a whole body response, cancer is both a visible and invisible disease. Drugs that are used systemically such as oral delivery or intravenously, are often unable to reach most parts of the tumor due to the irregular vascular of the lesions. And should a drug reach a tumor, the concentrations at the tumor site may be too low to be effective. Immunotherapy often has trouble distinguishing between healthy tissue and cancer and often is combined with chemo systemically. The situation is clear for many metastatic cancers. Most drugs have short duration of response, if any, are toxic and patients die. Accordingly, there remains a strong continued unmet medical need for new treatment ideas. The concept of intratumoral treatment using drugs has been an objective of clinicians since the discovery of chemotherapeutic agents nearly 80 years ago. The technical challenge of intratumoral injection is that a tumor has a high fat content and is pressurized. This is an environment that is highly incompatible with water-based products. Drugs must be water soluble to carry out their activity in the body. Water and fat are immiscible, and it is a challenge to deliver these currently. However, I'm a chemical engineer, And I've worked over 25 years in biotech developing drugs using novel delivery technologies. During my time at Emysphere, a company that was purchased for $1.8 billion in 2020, I led the engineering teams that created the technology for the blockbuster drug ribelsis, the world's only orally delivered protein, a product that uses molecular delivery technology that can pass a protein through the gut to the bloodstream without harm to the drug or healthy tissue. The human body normally digests proteins. The ability to create an orally delivered protein drug is truly a feat of chemistry and engineering. At Intensity, we have adopted that molecular technology and created a patented product that after direct intratumoral injection disperses the two potent cytotoxic agents, cisplatin and vinblastine, comprising our formulation into and throughout the tumor. And that technology also allows for the diffusion of those compounds into the cancer cells themselves. And rather than an instant death or destructive local treatment, such as radiation or ablation, our data suggests that the drug kills the cancer over a period of time, from days to weeks. From the dying cancer cells, our results indicate that immune cells can now penetrate into the tumor and recognize those cancer cells for attack. I urge you to review the images of our peer review publication showing the remarkable dispersion and diffusion properties of our drug that were published in the International General Molecular Sciences. The paper is available on our website. Please also view some of the images from our S1 that show the ability to kill large tumors on a single dose. Another innovation of our approach is that we dose based on the patient's visible tumor burden. We calculate the dose for each tumor and treat as many tumors for each patient as safely possible. This way of dosing is a personalized approach for each patient. The level of total tumor burden How much disease the patient enters into the studies or has at the time of diagnosis is a prognostic factor of patient outcomes. For systemic drugs today, dose is based on a person's weight or specific surface area or is even given as a fixed dose. The goal is to load as much poison into the body as possible to kill as much cancer without killing the patient. which unfortunately sometimes happens. There is no correlation of a patient's specific surface area or weight with their outcome for treatment. We try to cause as much necrosis in as many of the visible tumors as safely possible to activate the immune response. Since our drug is retained by the tumor, this approach spares the patient from extreme toxicity. Most of our side effects are low-grade pain, At the injection site, fatigue or some nausea. The data presented this past quarter at ASCO and summarized in today's press release, metastatic disease and early-stage breast cancer suggest that our drug has high tumor killing with a favorable safety profile coupled with the anti-cancer immune effect that I just spoke about. Dr. Angel Arnault, professor of medicine from the University of Ottawa, and the lead investigator in our phase two early stage invincible study in breast cancer, who is an expert in the window of opportunity studies, is quoted in our invincible study release as follows. For the first time, there is the possibility that patients will have a treatment that can ignite the immune system prior to lumpectomy or mastectomy that may protect the patient from disease recurrence." The data at ASCO was well received by oncologists working with sarcoma and presurgical breast cancer patients. We now have data from over 200 patients, and the clinical and non-clinical evidence in the mechanism of action is available for your review. In the six plus years that we've been conducting our clinical research, we have learned a great deal about our unique drug. We have learned that the drug is greater than 95% absorbed and retained in the injected tumor, independent of the type of cancer. Dose into the tumor can be set by the tumor's longest diameter or total volume, which is readily measurable, thus dosing is now personalized. The higher percentage of the total tumor burden treated, by our drug, the better the outcome. One dose, depending on the amount given and size of the tumor, can cause complete necrosis. We've also learned that the commonly used method for determining efficacy, the response evaluation criteria in solid tumors, or RESIST, R-E-C-I-S-T, is inaccurate as a metric for our locally delivered drug. This is also a change. Resist is commonly used and evaluates only the change in longest diameter. With our highly absorbed product, the injected tumor's longest diameter may grow at the same time the tumor's volume is decreasing. We understand that overall survival, OS, which is FDA's gold standard, gold standard for approval, is the best endpoint for our approach in metastatic disease. And OS will be our endpoint for our Phase III study for use of our drug INT230-6 as a treatment in second and third line soft tissue sarcoma, STS, compared to the standard of care. Metastatic soft tissue sarcoma is a deadly disease. Now for local disease, we believe that our drug given prior to surgery for a number of cancers has the potential to delay disease recurrence for those at greatest risk. And we intend to begin a phase two slash three program to treat triple negative breast cancer in the pre-surgical setting. This is also referred to as neoadjuvant. And we will compare our drug added to the standard of care to the standard care alone. Our goal will be to seek accelerated approval from FDA using the accepted surrogate endpoint of complete pathological response, which is the complete elimination of live cancer prior to the breast cancer surgery. Our efforts and our focus now are to produce the Phase III supplies and initiate the two late-stage clinical programs. Shortly after the IPO closed, we reached out to our inventors and partners. There was no immediate celebration of the IPO. We needed to conduct these next studies. We began work already for manufacturing a new batch of drug products suitable for Phase III, and we activated a contract that had been on hold for the clinical management of the sarcoma phase three study. We are scheduled to make clinical supplies this year and file the sarcoma IND with the finished protocol this year as well. We met with FDA in 2021 to discuss the sarcoma study and we have an advanced protocol that is nearly complete. We are working with a group to draft the protocol for the pre-surgical study. It is quite a busy time. So, this concludes our prepared remarks. We would like to open the call to your questions if you're an analyst. Operator, I turn the call back to you for questions from analysts. If anyone else has a question, please reach out to our IR firm who will provide answers. Thank you.
spk03: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from RK over at Wainwright. Please go ahead, sir.
spk01: Good morning, Lewis. Congratulations on getting a successful IPO done. A couple of quick questions from me. So with the study for breast cancer, the triple negative breast cancer that you're talking about, Have you had conversations with the FDA in terms of the accelerated regulatory pathway?
spk04: Good morning, R.K., and thank you for the question. We appreciate your interest. So the answer to that question is yes. In 2020, actually, before we were starting this study, it's called the Invincible Study, we met with FDA and discussed a number of different scenarios. And they certainly understand our technology. We've been working with that division for a long time. And they wanted to see exactly some data in the pre-surgical setting, which we've now generated 91 patients of. We will go back to them with the protocol for the study I outlined, discussing with them the data from that invincible study, sharing with them our understanding, and seeking to get their buy-in that if we hit a clinically meaningful change in the increase in pathological complete response in these triple negative breast cancer patients, what their thinking will be. But we've already discussed with them, and obviously we know the regs, and we're looking forward to going back to the FDA with the data. So, yes, the answer is we have spoken to them.
spk01: Thank you. I am not too familiar with the triple negative breast cancer patient group, but in general, triple negative being a pretty severe disease and an aggressive disease, how easy is it to get some of these women to sign up pre-surgical for a study?
spk04: Yes, that's a very good question. So first of all, triple negative breast cancer is a very aggressive disease in women who have tumors in that category. And there's about 17,000 in the United States and close to 50% more in Europe. Those women go through four months of brutal chemotherapy, which they sign up for, because the alternative is not good. And from that brutal chemotherapy, the women have about a 0.6% chance of dying from the chemotherapy. The disease is very likely to come back if you don't go through that regimen. This is where you see the pictures of the women with hair loss and all of the other parameters that go with it. What we will do is we will add one or two doses of our drug upfront to the standard of care chemotherapy. So for the women who are choosing the standard of care chemotherapy, The added burden is really the opportunity to kill the cancer up front and get an immune response started before they go. And when we did this 91 patients, we found out that there were no delays to surgery. There were no adverse events. 90% were grade one or two adverse events. Very mild. The ability to kill your tumor up front the ability to have very few adverse events, the ability to potentially ignite an immune response against the cancer was extraordinarily attractive, and we could have enrolled a significantly larger number of women. They really loved this drug. We also did, the doctor, Arnaud, did a patient-reported outcome, and what we found was that there was a statistically significant ability for the women to come back to work and function more effectively after getting our drug. a patient population that had no treatment options. And so what we are seeing is a very high interest in the ability to kill tumors safely before surgery. We know that the women who go through chemotherapy are going to do it, so they are suffering. And now with the ability of our drug to hopefully kill a significant amount up front and ignite an immune response, we hope to increase the pathological complete response dramatically. and that will be meaningful in terms of the event-free survival, which we will also have to demonstrate. So I think to answer your question briefly is there was very high interest and we expect that there will be.
spk01: Lewis, beyond triple negative breast cancer, what's the potential for this drug in other types of breast cancer?
spk04: So the other women who get chemotherapy prior to surgery are HER2 women. So that's another doubling of the population. About the same number go through HER2 as go through triple negative. HER positive, HER2 positive. So we're looking at that population. But beyond breast cancer, you can imagine that anybody who's having a likelihood of disease recurrence, such as in sarcoma, which is where we're going to be doing the sarcometastatic study, and other diseases like pancreatic and a whole bunch of these diseases, If they can get surgery, why not get one or two doses of our drug? Side effects are low. There hadn't been a delay to surgery. And the potential to ignite an immune response is there. When we were doing our study in metastatic disease, we treated over 25 different types of cancers. Sarcoma is normally a non-immunogenic. The immunotherapies do not work in that disease. And we were able to show uninjected tumors shrinking. So we believe that this is a new way to treat cancer that has got the potential to treat both metastatic and presurgical. And we think that their interest in other areas beyond breast cancer will be very high.
spk01: Thank you. And last question from me is on the drug material for the phase three study. You said that you were in conversations with the manufacturers and getting the drug ready. Based on your timeline, you know, do you think you'll have the drug in time to initiate dosing in Q4, or is it basically trying to get all the centers recruited in Q4?
spk04: Yeah, I don't think we, you know, in our last disclosures we said that the studies will start hopefully in, you know, Q4, Q1. But it's very unlikely that we'll be able to manufacture and get everything up and running in Q4. It's possible, but we're guiding that Q1 is more likely, if not even in the first month after Q1. But we have worked with the vendors this past month, and we have set up ourselves to do the best effort we can to try to get this drug made. I'm an engineer, and I understand you know, how manufacturing works really well. And this is the, you know, there can be a million things out of your control that can go wrong. The delay in bottles, a delay here, a delay there. The difference between phase three, by the way, and everything else is enormous. In phase three, you have to have validated analytical methods that are suitable for commercial use in some case, you know, during phase three. You have to have a whole other level of specifications and planning that goes into it. So it is not the same as a phase one or phase two type of product. Now, we've made this drug under pretty close to phase three operating conditions three times. We'll be using the last batch we made, which came out right in spec, to make the phase three materials. We've developed the analytical methods that need to be validated. But we are on the way, and I'm very confident we will succeed. We have a good engineering team. It's the same team I used when I was working at Emisphere. We all experienced. We all know how to do it. And the vendor that we're working with has made this batch under GMP conditions three times. So I believe that process is in play. A million things can go wrong. Don't get me wrong on that. But ultimately, I think we'll get it done, but I do believe we will not dose probably until the first quarter, if not a little later than that. Okay.
spk01: Thank you. Thank you, Luis, and good luck.
spk04: Thank you, RK. Appreciate it. Look forward to seeing you soon.
spk03: This concludes our question and answer session. I would like to turn the conference call back over to management for any closing remarks.
spk04: Thanks. I want to again thank investors for their support. especially those that participated in our IPO. About 1,700 patients die each day from cancer. That's an incredible number. They suffer terrible deaths and their families and caregivers also grieve. I've met some of the patients and families from our trials. The world desperately needs new, different treatment approaches. I think we have one. As a result, Intensity operates with a true sense of urgency every day, and we're dedicated to bringing this product to the market. I thank you for the time.
spk03: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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