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spk02: Thank you very much, operator. Good afternoon. Good morning to everybody. Thank you for joining us on the operational highlights and financial results for the second quarter fiscal year 2023. If we could go to slide four, please. On the call with me today is Andrew Schepanel, our interim CFO, and Dr. Eric Rose, our chief medical officer. Slide four is a snapshot of the investment highlights for the company. We have a novel allogeneic cell therapy platform that allows us to develop off-the-shelf allogeneic medicines based on our proprietary mesenchymal stromal cell platforms to treat patients with severe inflammatory conditions without the need for donor matching or immunosuppression. Our lead product candidate is Remy Stem Cell for steroid refractory acute graft-versus-host disease in children. The Remy Stem Cell BLA was resubmitted to the FDA in January 31 of this year. Rex Lamy Stroh Cell, our second lead product, is being developed for two indications, chronic low back pain and heart failure with reduced ejection fraction. For chronic low back pain, first phase three trial has been completed. An RMAT was granted by the FDA during this quarter, and the program is progressing towards initiation of a second pivotal phase three trial commencing mid-year. Rexamustra cell 4 heart failure with reduced ejection fraction has also completed a first phase three. And we've had an RMAT previously granted by the FDA for patients with end-stage heart failure with an LVAD implanted. And today I can announce that the phase three trial dream heart failure for rexamesterocell in patients with class two, three disease has been published in the premier cardiovascular journal, Journal of the American College of Cardiology. In terms of finances, we've got an annualized revenue, approximately 7.6 million from royalties on sales of our mesenchymal stromal cell products. We have 67.6 million in cash and up to an additional 40 million from existing financing facilities subject to certain milestones. Let's go to the next slide, slide five, please. This slide shows a snapshot of our late-stage clinical pipeline. I've just talked to the lead indications for remy stem cell in GVHD, rexlemy stroke cell in chronic discogenic back pain, and heart failure with reduced ejection fraction. And there are several other indications for remy stem cell that we are pursuing, including acute respiratory distress syndrome and inflammatory bowel disease. Those are with clinical collaborations and investigated initiated studies. Next slide, please. Our proprietary stromal cell technology platform allows us to have very well defined stromal cells with well characterized mechanisms of action, potency assays, batch-to-batch consistency, and reproducibility. Our capability to manufacture these cells allows for scalable production and off-the-shelf therapeutics. And we have a very strong IP estate that underpins compositions of matter, methods of manufacturing, and indications. Next slide, please. Now I'd like to move to our financial results, and Andrew Schapino will take you through these. If we could go to slide eight, please.
spk01: Thanks, Sylvia. The financial highlights for the second quarter are on slide eight. So revenues from royalties on sales of Temcel in Japan by our licensee were $1.9 million for the second quarter ended December 31, 2022. On a constant currency basis, sales for the quarter ended December 31, 2022 were $2.1 million. compared with 2.3 million for the quarter ended December 31, 2021. Net cash usage for operating activity in the second quarter FY2023 was 16.5 million. This represented a 9% reduction of 1.7 million on the second quarter FY2022 and a 46% reduction of 14.1 million on the second quarter FY 2021. At December 31, 2022, cash on hand was $67.6 million, with up to an additional $40 million may be drawn from existing financing facilities subject to achieving certain milestones. Turning to the next slide, I'll take you through the components of our improved loss before tax for the quarter. Our revenues are predominantly from royalties from sales in Japan by our licensee. Our R&D expenditure was reduced by $2.5 million, or 25%, down to $7.7 million for the quarter ended December 31, 2022. Our R&D expenses primarily supported preparations for Remy Stem Cell BLA resubmission and preparations for pivotal studies for Rex Remistrocell as clinical trial activities have reduced. Continued investment in manufacturing activities to support the potential commercial launch of GVHD. On FDA approval, $30.4 million of Remistem cell pre-launch inventory will be recognized on the balance sheet. In relation to finance costs, they include $5 million of non-cash expenditure for the quarter ended December 31, 2022, comprising accrued interest and borrowing costs. Now I'd like to turn the call back to Phil.
spk02: Thanks, Andrew. If we could now go to slide 11, the remainder of the slides will focus on operational activities for our lead indications. Slide 11 demonstrates the unmet need for children with steroid refractory acute graft versus host disease. This is a devastating complication of an allogeneic bone marrow transplant and is associated with mortality rates as high as 90%. Approximately 1,500 children in the U.S. alone undergo an allogeneic bone marrow transplant, and as many as 50% will get a steroid refractory, will get acute graftless host disease, of whom 50% will respond and the rest will not respond. It goes to slide 12. The new data that comprised the BLA resubmission are outlined on this slide. We've generated new data that shows remy stem cells treatment benefit in high-risk disease activity and survival in propensity match studies of children in the previously completed phase three trial and in controls stratified by validated biomarkers for high-risk disease. presented data on new long-term survival outcomes of the children who were enrolled in the phase three trial showing durability of treatment effect through at least four years. We've generated new analyses of data from the phase three trial and from the expanded access program showing that the validated potency assay in place during the phase three trial actually reflects the primary mechanism of action of remy stem cell in children with serodefractory GVHD and correlates with the products in vivo bioactivity and predicts overall survival outcomes. Finally, we've also presented in the BLA new data showing that the validated potency assay now has low variability and can adequately demonstrate manufacturing consistency and reproducibility. Next slide, please. In an investigator-initiated study at Mount Sinai in New York, the use of validated biomarkers for assessment of treatment effect in severe stereotrophic GVHD in children demonstrated that remy stem cell treatment resulted in significantly greater day 28 overall responses on the left-hand slide and day 180 survival on the right-hand slide in those children who were matched by biomarkers for the highest risk of disease. The biomarker that was used here is called MAP. MAP score above 0.29 is a validated biomarker for very severe disease and in fact appears to be more sensitive in identifying severe disease patients than its clinical severity score that has otherwise been used previously. We can go to the next slide. This is a Kaplan-Meier analysis of children in the phase three trial GVHD001. And in children treated with best available therapy in the MAGIC database, the children were matched on the basis of clinical grades, as well as on the objective biomarker score of MAP greater than 0.29. In this highest risk category of patients, you can see a very significant improvement in overall survival through six months in those who received Remy stem cell in blue, compared to those who have received maximal available standard of care in red. Next slide, slide 15. This slide is a summation of the three trials performed to date and the short-term survival benefit of remy stem cell and in matched controls where available. In a randomized control trial in protocol 280, from some years ago, children who received remy stem cell had a 79% day 100 survival compared with children who received the best available care. In our open label phase three trial study 001, 89% of whom had severe grade CD disease, day 100 survival was 74%. compared to 57% in propensity matched children from the MAGIC cohort, matched for the same inclusion criteria as the children in 001. In the larger expanded access protocol, where children received remy stem cell salvage therapy, their 100 survival was 66%. And of course, we had no controls overall for this whole study. However, in an earlier analysis with CIBMTR database, just in grade D patients, there was a 51% TAE100 survival compared to 31% survival in children with grade D disease treated with best available therapy. If we can go to the next slide, data that was recently published and presented at the tandem meeting demonstrated survival after four years now in children from the GVHD001 study. And in this table, we show the one-year, two-year, three-year, and four-year survival in blue of children from this study. And highlighted as well are long-term survival outcomes in various studies in the literature. Macmillan et al. is a study exclusively in children, only 22% of whom had grade 3-4 disease. And it's a single center experience through two years. The other four studies are all in adults. As you can see, the one-year survival of our children from the 001 study was 63%, which was substantially higher than the one-year survival in each of the published literature studies, and similarly with the two-year survival being 51% relative to the studies that have been published in children and adults. After two years, we see stable, long-term survival through at least four years of those who were alive at two years continue to maintain long-term survival. Next slide, please. This slide, 17, shows side-by-side the published data from McMillan et al. on the left-hand side in children with steroid refractory acute GVHD treated with best available therapy, demonstrating an overall survival of just 35% through two years. In comparison, you can see that the two-year survival of children treated with remy stem cell, steroid refractory disease, had 51% survival through two years. Next slide. Now let's move on to REX lemistrocell. This is being developed for both chronic low back pain due to inflammatory degenerative disc disease and for low ejection fraction heart failure. In terms of the CLVP program, go to slide 19, this continues to be, of course, a very large unmet need with as many as 7 million patients across the US and an additional number in the EU5 being refractory to maximal available therapy and potentially benefiting from this type of an approach. Slide 20 now shows the patient journey from conservative therapy to potentially opioid analgesics to interventional therapy. And really it's the target population for us are those that fail conservative treatments. And the objective of course is to avoid opioids and to avoid interventional therapeutics. Next slide. Page 21. We were very pleased last month to be notified that we've received Regenerative Medicine Advanced Therapy designation for rex lamestrosa in the treatment of chronic discogenic low back pain. The benefit of an RMAT designation is that it provides all the benefits of breakthrough and fast track designations, including a rolling review and eligibility for priority review on filing of a biologics license application. And it's specific for cell and gene therapies as opposed to small molecules. RMAT was based on the data in the Phase III trial that was provided to the FDA. And the key elements of that Phase III trial were that a single injection of rexlamustrosol together with hyaluronic acid carrier into the lumbar disc causing pain resulted in significant reduction in pain relative to saline controls at both 12 and 24 months across the entire study population of 404 patients. The pain reduction was maintained through at least 36 months, and was also seen in the subset of patients using opioids at baseline, 168 patients, with the Rexlimistrocel group having substantially greater reduction at all time points compared with saline controls. Importantly, among patients on opioids at baseline, despite instructions to maintain existing therapies throughout the trial, by 36 months, 28% were able to come off opioids compared with only 8% of salient treatment controls. We hope to be able to demonstrate this as an objective in the next study. Next slide, please. Slide 22, on further analysis of the pain data, we saw that the maximal reduction in pain in this phase three trial was in those patients who had had duration of pain for less than the median for the whole study. which was 68 months. And you can see here that the very significant reduction in pain from baseline by the cells together with the HA carrier at each of 12, 18, 24, and 36 months in red compared to the saline treatment controls in green. Next slide. So on that basis, we've had discussions with the FDA and have alignment on what the pivotal phase three study would look like. It would seek to replicate the data I've just shown you, aiming to reduce pain at 12 months as a primary endpoint in patients with duration of pain for less than five years. The RMAT designation for this program means that we'll be able to have frequent interactions and further input from the FDA. And we expect to commence this pivotal trial by middle of this calendar year. Next slide. Now, rexaluminous stress cells also being developed for the large unmet need of patients with chronic heart failure and reduced ejection fraction. Slide 25. The unmet need continues to be very large. Despite a number of new medications that have been approved for patients with heart failure, mortality continues to be very high and approaches 50% at five years. and at least 75% after initial hospitalization. Patients with heart failure are also at high risk of recurrent major adverse events, including heart attacks and strokes, and those both contribute to mortality as well as contribute to progressive worsening of heart failure. This is where the largest unmet need continues to be. Next slide. And in terms of the patient journey, we believe that a single intervention with our therapy can provide a substantial difference in the natural history of this disease all the way from class two to class three to end stage heart failure patients. And we have data that has addressed these diverse patient populations. Move on to slide 27. Today we're very pleased that the outcomes of the DREAM heart failure trial, double-blind, randomized, controlled in 537 patients who received Rexlimistrocell or sham and were followed for over 30 months, was published in the premier cardiovascular journal, Journal of the American College of Cardiology. This is the largest cell therapy trial that's ever been performed and certainly the longest follow-up in any study using cell therapy. The key findings that were published showed that the Rexlimistrocell treated patients demonstrated improvement in left ventricular ejection fraction at 12 months to a far greater extent than the placebo patients. And the maximum benefit in strengthening of the left ventricle as measured by ejection fraction was seen in patients with active inflammation. Secondly, Raxlemy's stroke cell reduced the risk of a heart attack or stroke by 57% in all treated patients and by 75% in patients with inflammation. Thirdly, Rexalimestrosal reduced the risk for time to a first major adverse cardiac event defined as cardiovascular death or heart attack or stroke by 28% in all patients over the 30-month mean period of follow-up and by 37% in patients with inflammation. And it's important to note that these large reductions in major risks come on top of maximal standard therapy that all patients were offered both in the treatment and control arms. We're very excited by these data, and they certainly support the potential efficacy of this therapeutic that's changing the natural history of this disease. Next slide. So the significant need is clearly there in terms of mortality and major adverse events. The data that have just been published demonstrate the potential of this approach, particularly mechanistically linking improvement in left ventricular strength at 12 months by ejection fraction with the long-term major outcomes. Inflammation appears to be the major determinant of response to our therapy as would be expected with an immunomodulatory therapy and we expect to be meeting with the FDA over the next quarter in order to discuss pathway forward to towards marketing approval under the existing RMAT designation. And on that note, I think I'll thank you for listening to us and open it up to questions.
spk00: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Edward Tentoff with Piper Sandler.
spk04: Great. Thank you very much. Thanks for the thorough update, and congrats on all the progress recently. I want to get a better understanding with respect to the recommission of VIA. When can we expect a response by the FDA, and would you anticipate and Advisory Committee. Thank you so very much.
spk02: Thank you. Look, the FDA is working toward, to their own timelines, obviously. The COVID pandemic has, you know, made things difficult. They've clearly stretched. But we've had dialogue, interactions, and questions and responses. And it's an active process. You know, we're pleased with where we are in terms of the process itself. Under the existing fast track designation, there is a requirement for a six month maximum review period from the date of filing. And we do not expect that there will be another panel review. since we've already had a panel the first time around. And you may recall that there was a nine-to-one vote in favor of approval by the experts who were selected as part of that panel. But we'll certainly update the market in due course.
spk04: Awesome. And then I was pleased to see the dream study get published. What are expectations and plans for rectal and menstrual cell in heart failure? either in terms of partnering and or initiating a pivotal trial after discussions with the regulatory agencies. Thank you.
spk02: Now that the randomized controlled study has been published in a major peer-reviewed journal, it provides a sort of validation in both our discussions with the agency as well as with strategic partners We do have an RMAT for the sickest, most severe patients with heart failure, those on an LVAD. And I would expect that we will continue to have those discussions with the FDA around the most direct path for the product towards approval, either in a high risk, a very high risk segment, or in the broader class 2, 3 population. Great, excellent, thanks.
spk00: Your next question comes from Chen Louise with Cantor.
spk05: Hi, this is Wayne for Louise. Thanks for taking my questions and congratulations on all success this quarter. So the first question I had for you was that I know there has been a lot of focus on the BLA resubmission and it's probably too early to draw any conclusions, but how should we think about the pricing and peak sales potential for REM stem cell in HVHD. And then my second question is, for the modeling purpose, how should we think about the OPEX in third and fourth quarter and then in 2024? Thank you.
spk02: Yeah, I think, look, it's probably a little bit early to talk about pricing and reimbursement. I think you can imagine there's a lot of activity by the company in interfacing with key opinion leaders, with payers, with other stakeholders as we move forward. But I think it's reasonable to think about CAR T-cell therapies for similar patient populations, such as children with ALL, as an appropriate comparator, just given the complexity of the disease that we're treating, the complexity of the technology. Sorry, would you mind repeating the second question?
spk05: Our second question is on the OPEX. So how should we think about the OPEX for the third quarter and fourth quarter, given I think you mentioned, yeah.
spk02: Yeah, look, I think we're very careful in how we're managing our expenses. I think, you know, we're stage gating our spend and ramp up in terms of commercialization step by step, as you would expect us to do. But I think in general, we think that our quarterly spend has been relatively stable for the past six to 12 months. And I would expect that we continue to be in the same sort of OPEX.
spk00: Your next question comes from from HCW.
spk03: Thank you. This is from . A couple of quick questions. On the GVHD study, when you showed us some data, you were using MAP as a biomarker, and in your conversations with the FDA, do they also see this as a validated biomarker? And I'm just trying to get a feel for that. And also on slide 16, when you're comparing patients as group C and D from your study, is that same as group three and four? I'm just trying to understand why is it kind of named differently?
spk02: Yeah, the clinical scaling, there are two major clinical grading scores. There's the CIBMTR grading score. This is related to slide 16 question. CRBMTR grading score is grades B, C, and D, whereas the Glucksberg clinical score is grades 2, 3, and 4. But they effectively represent the same degrees of severity. So I think that that's important to note. The MAP score is a very well-validated and extensively published biomarker that appears to be more sensitive to identifying those patients at highest risk for non-response and death than is either the CIBMTR or the Glucksberg clinical scale. And that's the reason that it's being used by investigators and in various trials to provide an objective measure of disease severity. The problem with the clinical grading scores is, of course, it has the potential for bias. by individual investigators and hospitals that have different kind of, you know, standard of care, for example. But if you use a biomarker like the MAPS score, which has been validated in both, predominantly in adults with severe disease, but to a lesser extent also in children, it takes out the potential bias from clinical observation.
spk03: Thank you. And then on the rectal menstrual cells for the chronic back pain, I know you gave us some idea of how the second phase three is going to look like. But in terms of the patient population, so when we are thinking about patients who have less than five years of back pain, what sort of a population are we thinking about? And I'm just trying to make sure that anybody who has less than five years is... is eligible for getting into your trial?
spk02: Yes. So the patient enrollment criteria are patients who have moderate to severe discogenic pain with radiographic evidence of a principal lesion, let's say MRI showing degeneration of a lead disc L4-5 or L5-S1, et cetera, and at least six months of unremitting pain that has not responded to conservative therapy, including opioids. Now, the patients who fall in that category within, say, the first five years have active inflammation, immune-mediated inflammation and pain that is very much out of proportion to the radiographic degeneration or functional disability. So that's why we think that our cells are best suited to be used in that first five-year window when there's active inflammation where we can actually interrupt the inflammatory cycle and prevent the natural history of destruction and ultimately fibrous replacement of the discs.
spk03: Perfect.
spk00: Thank you very much, Phyllis. That brings us to the end of today's call. I'll now hand back to Dr. Atescu for closing remarks.
spk02: Thank you, everybody, for joining us today. We're very excited about the progress across each of our major lead indications, graphers, host disease, back pain, and heart failure, and we look forward to updating you all very shortly on continued progress. Thank you.
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