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spk03: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the PanBella Therapeutics second quarter 2022 earnings call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question and answer session. With me on the call are Jennifer Simpson, Chief Executive Officer, and Sue Horvath, Chief Financial Officer. Before I turn the call over to Dr. Simpson, please note that statements made on this call that are not historical facts may be forward-looking statements. Significant risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements are detailed in the company's annual report on Form 10-K and supplemented by subsequently filed quarterly reports on Form 10-Q, as well in other reports that the company has filed with the SEC. Any forward-looking statements made on this call are made only as of today's date, and the company does not undertake any obligation to update or supplement any such statements to reflect subsequent developments. Now I would like to turn the call over to Jennifer Simpson, CEO of Pambela. Jennifer, please proceed.
spk04: Thank you, and thank you everyone for joining. I will begin the call by touching on Q2 and our recent significant accomplishments. Sue will then follow with a review of the financial results, and then we will open it up for Q&A. So starting with Q2 and recent highlights, since our last earnings call, we have closed on our acquisition of Cancer Prevention Pharmaceuticals, or CPP for short. As we've shared, our combined company will have a much larger pipeline, targeting approximately a $5 billion aggregate market opportunity for the areas of initial focus. Acquiring CPP has substantially advanced our mission of treating diseases where there are unmet medical needs through a diversified pipeline, addressing numerous targets and thus expanding the potential of a combined company. CPP's primary asset, a fornicate, or CPP-1X, is being evaluated in clinical trials in combination and in two additional forms, a tablet and a sachet. In a phase three study, the efficacy and safety of the combination of aflornifine and Sulindac, or Flimpovi, as compared with either aflornifine or Sulindac alone in adults with familial adenomatous polyposis, also known as FAP, was completed in 2019. A total of 171 patients underwent randomization. The primary endpoint was an event-driven composite endpoint which the study failed to show a statistical difference. In a post hoc analysis, none of the patients in the combination arm progressed to a need for lower gastrointestinal, or lower GI, surgery for up to 48 months, compared with 7, or 13.2%, and 8, or 15.7%, of the patients in the sulumbac and afluorinacine arms, respectively. These data corresponded to risk reductions for the need for lower GI surgery approaching 100% between combination and either monotherapy. Given the statistical significance of the lower GI group, a new drug application or NDA was filed with the FDA. As the study failed to meet the primary endpoint and the NDA was based on the results of an exploratory analysis, a complete response letter was issued. To address this deficiency concern, we intend to submit the results of one or more adequate and well-controlled clinical trials that demonstrate an effect on a clinical endpoint. CPP has a license agreement with 1-2 Therapeutics Assets Limited, or 1-2. Under the license agreement, 1-2 has licensed the North American Development and Commercialization Rights for Flinpovy, as described in the company's IND application. CPP has transferred the IND for the product to the licensing partner through the agreement. The agreement provided upfront payments, which were recognized by CPP in the year ended December 31, 2021. The agreement also calls for CPP to receive a milestone payment upon regulatory approval of LMPOVI by the FDA and royalties on net sales of LMPOVI in the licensed territories. Payment of the milestone payment and net sales royalties will be reduced on a dollar-for-dollar basis by amounts funded by the licensing partner for its direct costs associated with any development activities necessary to secure FDA approval. We expect that the FAP registration trial will be initiated by mid-2023. We will be collaborating closely with 1Q Therapeutics as we look to finalize the development plan to seek approval for FAP in Europe. We also have an ongoing phase three, double-blind, placebo-controlled trial of the combination of a fluorethin and Sulimbac Prevent Recurrence of High-Risk Abnomas and Second Primary Colorectal Cancers in Patients with Stage 0-3 Colon or Rectal Cancer. The trial's title is Preventing Abnomas of the Colon with a Flournethine Insulin Dex and is also known as the PACES trial. The purpose of this study is to assess whether the combination of a flournethine insulin dex prepared to the corresponding placebo has efficacy against colorectal lesions or total colorectal events. The PACES trial is funded by the National Cancer Institute, or NCI, in collaboration with the Southwest Oncology Group, also known as QOG. Additionally, there are trials evaluating a fornicine sachet in relapsed refractory neuroblastoma, supported by the Children's Oncology Group, or COG, and the NCI, which is ongoing, and a non-small-cell lung cancer trial in the SICK11 mutation patients scheduled to begin this year. For fluorine tablets, a phase 2 trial in type 1 onset diabetes is scheduled to begin this year. Turning to SCP-101, in May of 2022, we were notified that the United States Adopted Names Council, or USAN, had adopted ibuprofen as a USAN for SCP-101. After August 1st of 2022, the USAN information on ibuprofen will be scheduled for posting on the USAN website. Regarding clinical development, as a reminder, earlier in the year we announced the initiation of a double-blind, placebo-controlled, global randomized clinical trial for SCP-101 in combination with gemcitabine and nabpaclitaxel versus gemcitabine, nabpaclitaxel, and placebo in patients with untreated metastatic pancreatic ductal adenocarcinoma and is referred to as the ASPIRE trial. This month, we announced expansion of the ASPIRE trial into Australia, as well as the first patient enrolled. Moving ahead, we are planning to have approximately 90 additional sites activated by early 2023. The trial was originally designed as a phase 2-3 with a smaller sample size of 150 patients to support the events required for an interim analysis based on progression-free survival and a primary endpoint of overall survival. In response to European and FDA regulatory feedback, we amended the study to include the total trial sample size of 600 patients and modify the design to utilize the primary endpoint of overall survival for the interim analysis as well. CFS will also be analyzed to provide additional efficacy evidence. This amendment was supported by the final data from the Phase IaB first-line metastatic pancreatic trial which completed enrollment in December of 2020. The study will enroll 600 subjects and is anticipated to take approximately 36 months for complete enrollment, with the interim analysis still available in early 2024. The interim analysis allows us to assess the efficacy and safety, enabling us to ensure optimal resource utilization. Also note, we have completed preclinical work necessary to begin a pancreatic cancer neoadjuvant trial. we are working with the key opinion leaders to finalize the protocol and obtain the necessary institutional approvals to open this investigator-initiated trial by year end. Turning to our work on SBP101 for ovarian cancer, during the quarter we held an R&D day and we were joined by leading experts from the Sidney Kimmel Comprehensive Cancer Center at the Johns Hopkins University School of Medicine for a deep dive on SBP101 as a polyamine metabolism modulator in ovarian cancer. We were also pleased to have completed a poster presentation highlighting the results for SVP101 in ovarian cancer at the American Association for Cancer Research, or AACR, conference, which took place April 8th through April 13th of this year. The poster presentation points out that the treatment of immune-competent mice injected with the VDID-8 positive ovarian cancer with SVP101 had significantly prolonged survival and decreased overall tumor burden. This data supports our efforts to initiate an ovarian cancer clinical program late this year into early next year. The mature data was later published in the International Journal of Molecular Sciences titled Expanded Potential of the Polyamine Analog SDP-101 as a Modulator of Polyamine Metabolism and Cancer Therapeutics. The publication highlighted that in vitro studies determined that SBP101 reduced cellular viability across a broad range of cancer cell types with an exceptionally strong reduction in ovarian adenocarcinoma viability resulting in a 42% increase in median survival in the VD8 positive ovarian cancer mouse model. Turning to milestones, as I mentioned, we closed on the CPP acquisition and announced the first patient enrolled in our ASPIRE trial, as well as expansion outside the U.S. Additionally, in the second half of this year, we anticipate announcing the final data from our phase one trial in untreated metastatic pancreatic cancer patients and the opening of the neoadjuvant pancreatic cancer investigator-initiated trial. We also intend to initiate the ovarian cancer clinical program for SCP-101 by early 2023. With the closing of the CPP transaction, we also anticipate achievement of additional milestones in 2022 that include Initiation of a non-small cell lung cancer trial with a fluornithine in combination with Keytruda. Initiation of a phase 2 trial in type 1 onset diabetes. And a futility analysis in the PACES trial by early 2023. In summary, we have made tremendous progress in Q2 and year-to-date. We are excited to enhance stockholder value as we move ahead in the second half of 2022 by executing against our milestones. I will stop here and turn it over to Sue to review the financials.
spk02: Thank you, Jennifer. General and administrative expenses were 1.3 million in the second quarter of 2022 compared to 1.2 million in the second quarter of 2021. The change is due primarily to legal fees associated with the acquisition of CPP. Research and development expenses were 20 million in the second quarter of 2022. inclusive of a one-time non-cash expense of $17.7 million. This expense was the write-off of in-process research and development, or IPR&D. The company has accounted for the acquisition of CPP as an asset purchase. IPR&D represents the asset purchased, and GAAP accounting requires writing off this asset immediately after the acquisition. The remaining R&D expense in the quarter of approximately $2.3 million compares to $1 million in the second quarter of 2021. This increase in R&D expense is related to spending on our clinical studies as we ramped up efforts to activate up to 90 clinical sites around the world in the ASPIRE clinical trial. Net loss in the second quarter of 2022 was $22.1 million, or $1.51 per diluted share. compared to a net loss of 2.2 million or 22 cents per diluted share in the second quarter of 2021. Total cash was 2.5 million as of June 30th, 2022. Total current assets were 3.4 million and current liabilities were 6.2 million as of that same date. At June 30th, 2022, total non-current assets consisting of cash deposits held by our contract research organization with $3.1 million. As a result of the CPP acquisition, we now have debt on our balance sheet totaling $6.9 million as of June 30, 2022. This includes principal on two notes of $6.2 million and $650,000, along with accrued interest. Both notes accrue simple interest at a rate of 5% per annum. The smaller note plus accrued interest is due at the end of the year. The remaining note totaling $6.2 million has the following payment terms. Annually, on or before January 31, 2023 through January 31, 2026, $1 million plus accrued but unpaid interest. Second, the final remaining principal plus accrued interest is due on or before January 31st, 2027. A portion not to exceed the million plus interest of the first payment will be prepaid if the company raises capital prior to the first payment due date. The rationale for this acquisition of CPP is strong. Not only has the new combined entity significantly expanded our first our total addressable market but it also came with a fully funded registration trial for FUNPOVI in FAP and collaboratively funded investigator-led clinical trials and several other indications only requiring that we provide product. It is not expected that the acquisition will add significantly to our cash used in operations for the balance of 2022. PAMBELLA acquired CPP via merger for non-cash consideration consisting of 7.3 million shares of common stock for upfront payment and holdback, plus 1.9 million shares subject to rights to acquire consisting of assumed options and warrants. CPP stockholders are eligible to receive contingent cash payments totaling a maximum of $60 million. payable from future milestones and royalty payments associated with the potential approval and commercialization of the CPP lead asset. Panbella stockholders retained a majority of the outstanding shares of the post-merger holding company. Looking to the cap table, we now have 20.8 million of common shares outstanding, and including shares reserved for options and warrants, we were at 30.3 million shares. The shares reserved number includes all outstanding equity awards, including stock options, which were held primarily by insiders, and all warrants to purchase common stock. Our cash used in operations for the six months just ended totals approximately $8.7 million. During the first half, the company paid $2.6 million in cash deposits to our global contract research organization, which will be held to pay for clinical expenses at the end of the ASPIRE trial. This cash outlay for CRO deposits is not expected to repeat. Wrapped up activity in the randomized trial and costs associated with our acquisition drove the remaining cash used in operations. As discussed in our last journey call, we project that cash will take us into early Q4 of 2022. We will continue to focus our cash on those items in our plan which will drive value for our stockholders, such as the Aspire trial. In early August, the company launched an ATM offering, enabling potential gross proceeds of up to $8.4 million. While our daily trading volume has not yet supported sales under the ATM, we intend to take advantage of its availability under appropriate conditions to assist with our operating cash needs. That concludes my remarks. Operator, can you please open the phone lines for Q&A and poll for questions?
spk03: Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a few moments while we poll for questions. Your first question is coming from Tony Butler with Roth Capital. Please pose your question. Your line is live.
spk01: Thanks very much. Jennifer, the question is really around Aspire and the 36 months to fully enroll. I understand the pace of getting sites on board and they having signed all appropriate documents, et cetera. I guess the question is the anticipation of the pace of enrollment per site. And I'm just curious how you arrived at that 36 months, if you could provide some color on it. And importantly, if you have 150 patients for the futility, the question becomes, is it a matter of that number of patients or the 104 events? Thanks very much.
spk04: Sure. Thank you, Tony. So, you know, when you look at clinical trials, kind of an average and certainly one, the average that we see in pancreatic cancer is to assume roughly 0.2 patients per site per month. So that gives you an idea of one of the reasons why we have so many sites. And so we have factored that in. And with the primary, with the interim analysis being overall survival, that'll be, unfortunately, it's a pretty finite endpoint, right? So when we hit that number of events, we won't need to go very far past that for our conclusion, you know, for our evaluation because the patients will either be alive or dead. So that's, you know, that's one. I think it's important because we're staying consistent now with both the primary endpoint as well as the interim efficacy evaluation, right? We're using overall survival for both. Because we're using overall survival also for the interim analysis, that's one of the reasons that we don't have to necessarily over-enroll because you'll have that data available almost immediately. And that really gives us the ability to have the DSMD take a look, evaluate, ensure that both the safety and the efficacy are positive so that we can ensure appropriate resource utilization. And of course, more importantly, that, you know, if we see a benefit for the patients, that we are able to continue.
spk00: Thanks, Jennifer. Appreciate that. Certainly.
spk03: There appear to be no further questions in queue at this time. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines this time and have a wonderful day. Thank you for your participation.
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