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spk06: Greetings and welcome to the PRS Pharmaceuticals Inc. Q3 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Tom Burrows, CFO. Please go ahead, sir.
spk08: Good morning, everyone, and thank you for joining us for our third quarter 2021 conference call and corporate update. On the call today, we have Steve Yoder, our president and CEO, who will provide a corporate overview and outlook on our pipeline. Tim DeMuth, our chief medical officer, Keto Kaufman, our chief scientific officer, and Shane Orwell, our chief development officer, all of whom will be available for Q&A. You can access the press release released this morning on the Investor Relations page of our website at www.peiris.com. Before we begin, I'd like to caution that comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding the operations and future results of operations of PEIRIS, including statements relating to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position, and actual results or events may differ materially from those expressed or implied by such forward-looking statements. Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly, and current reports. The information being presented is only accurate as of today, and Pierce undertakes no obligation to update any statements to reflect future events or circumstances. I will now turn the call over to Steve.
spk07: Thank you, Tom, and thank you to everyone for joining us today for our 2021 third quarter earnings call. I am pleased to report that as we continue to advance a very exciting pipeline on our own and together with our several great alliance partners, we ended the quarter with a healthy balance sheet of over $125 million, which Tom will discuss in greater detail later, and which will get us through key milestones next year. Among the most important of these milestones is the top-line data from the entire Phase IIa study of PRSO60 AZD1402, an inhaled dry powder formulation IL-4 receptor alpha inhibitor we are jointly developing with AstraZeneca for the treatment of moderate to severe asthma. Dosing has been completed in Part Ia of the global Phase IIa study of PRSO60. The objective of Part Ia is to evaluate the safety and pharmacokinetics of the dry powder formulation in moderate asthmatics controlled on standard of care over four weeks. Data unblinding and review will now follow, the outcome of which we will publicly disclose, gaining progression to the second part of the study, where efficacy will be assessed in moderate uncontrolled asthmatics. In part two of the study, AstraZeneca will evaluate the efficacy, safety, and pharmacokinetics of O60 over four weeks in moderate uncontrolled asthmatics having a T2 endotype, with the primary endpoint being FEV1 improvement compared to placebo. Upon reporting the top line results of the entire Phase IIa study next year, we will have the options to co-develop and separately co-commercialize PRS-060 in the United States. Beyond PRS-060, we continue to advance four early stage programs that we are working on together with AstraZeneca. Another respiratory pipeline catalyst we are looking forward to next year is initiating clinical development for our recently announced fully proprietary respiratory program, PRS220, an inhaled antitalin protein targeting CTGF, or connective tissue growth factor, for the treatment of idiopathic pulmonary fibrosis. We reported preclinical data for the program at the European Respiratory Society International Congress in September, providing the rationale and supportive data for the advantages of a local intervention against CTGF, such as with PRS220. Data presented on the drug-like properties for PRS220 demonstrated its suitability for delivery to the lungs via nebulization, the intended administration route. Additionally, the data showed that in head-to-head preclinical studies, PRS220 achieved greater target engagement and more efficient mitigation of lung fibrosis than pamrevlimab, a systemically administered monoclonal antibody against the same target and which has provided clinical validation via a randomized phase 2A study in IPF patients. These data support our thesis that a CTGF inhibitor locally administered through inhalation, like PRS220, may be a superior approach to a systemically administered antagonist. We will also be evaluating this program for post-COVID pulmonary fibrosis with the support of a grant approximating 17 million U.S. dollars from the state of Bavaria in Germany. The grant will support clinical readiness activities and initial clinical development for the program, including GLP tox studies, GMP manufacturing, and phase one clinical development. Before moving on to our immuno-oncology pipeline, I would also briefly like to mention the progress of the Genentech collaboration we signed earlier this year. We have now initiated joint discovery activities for the two committed programs, one in respiratory and one in ophthalmology, as part of the collaboration to discover, develop, and commercialize locally delivered therapies that leverage our proprietary Andy Kalin platform. We are excited to be working with an industry leader, Genentech, on these programs, and we look forward to giving additional updates on their progress in due course. With that, I would now like to give an update on our immuno-oncology pipeline, beginning with synribofusp-alpha. As a reminder, SYNRA, also known as PRS343, is a 4-1BB HER2 bispecific that we are currently developing for HER2 high and HER2 low gastric cancer and which is entering Phase II. The Phase II study design is comprised of two 20-patient arms, one with HER2-high patients and one with HER2-low patients. The HER2-high arm will evaluate SINRA in combination with the current standard of care regimen, ramiserumab and paclitaxel, to be supported by a drug supply agreement with Lilly for ramiserumab, while the HER2-low arm will evaluate SINRA in combination with tucatinib a small molecule inhibitor of HER2 and HER3 to be supported by a drug supply agreement with cGen for 2-catenin. As previously reported, we plan to report initial efficacy data from the HER2 low arm next year, for which we are setting a bar of at least 40% objective response rate, or ORR, which is significantly higher than the 28% benchmark established by the standard of care. In addition to ORR, we will be evaluating duration of response, disease control rate, and safety. For the HER2 high arm, given the evolving treatment landscape, we have recently made a strategic decision to focus enrollment on a more homogenous patient population, namely those patients who have progressed after just one line of therapy. Given this change, we now expect to report data from this arm in 2023, which includes ORR, duration of response, disease control rate, as well as safety and tolerability. As we have previously guided, the bar for our go, no-go criteria for this HER2 high arm is a composite of measures, including an ORR of at least 50%. We and our advisors believe that a 50% response rate with a good durability and attractive safety profile would represent an important option for patients with HER2 high gastric cancer. Turning to our next IO program, we are nearing dosing of the first patient in the Phase 1-2 study of PRS344 or S095012, a 4-1BB PD-L1 bispecific, and we have received regulatory clearance to conduct the study in a number of jurisdictions. The global open-label dose escalation study will evaluate the safety, tolerability, and preliminary evidence of anti-tumor activity in patients with advanced solid tumors whose cancer progressed on standard of care treatment. PIRIS holds full U.S. rights for this program in collaboration with Servier, who holds ex-U.S. rights. Lastly, as part of our immuno-oncology update, I'm pleased to announce that we have initiated a second program within the bispecific immuno-oncology collaboration with C-GEN. a program that includes a co-promotion option for purists in the United States. Furthermore, CGEN is continuing to develop the first program, an undisclosed Annie Kalin-based buy specific. I would now like to hand the call back over to Tom, whom I would also like to congratulate on his recent promotion to Chief Financial Officer. Tom oversees all financial matters and capital markets-related activities at the company, including treasury, tax, financial planning, procurement, and investor relations. And lastly, I would also like to congratulate Ahmed Moza on his recent promotion to chief business officer. In his new role, Ahmed will head business development and portfolio strategy, in addition to serving as general counsel and Boston site head. Tom, please go ahead.
spk08: Thank you, Steve. And good morning again, everyone. Cash and cash equivalents totaled $125.1 million for the quarter ended September 30, 2021, compared to a cash and cash equivalents balance of $70.4 million for the year ended December 31, 2020. The increase since December 2020 is due to cash received from new and existing collaboration agreements, including milestone achievements, along with our use of the ATM program. The increase was partially offset by cash used to fund our operations for the first nine months of 2021. The September 30th cash balance does not include the impact of the Bavarian government grant, as those proceeds will be reimbursed for qualifying PRS-220 program costs incurred over the IND-enabling and early clinical development period. In the third quarter ended September 30, 2021, we sold 4.6 million shares for gross proceeds of $24 million under our ATM program at an average stock price of $5.27. R&D expenses were $18.9 million for the quarter ended September 30, 2021, compared to $11.8 million for the quarter ended September 30, 2020. The increase in spending reflects higher spending on preclinical and manufacturing activities for PRS-220, an increase in manufacturing costs across multiple immuno-oncology programs, higher clinical costs on synribofus-alpha, and higher employee-related costs. These increases were partially offset by lower manufacturing costs on PIERAS-60, which are fully reimbursable by AstraZeneca. Moving on to G&A expenses, We incurred $4.1 million for both quarters ended September 30, 2021 and 2020. There were no significant changes in the categories of spending as we continue to efficiently leverage our G&A functions and spending to support the overall company needs. For the quarter ended September 30, 2021, $1.8 million of other income was recorded for PRS-220 program costs that qualified for reimbursement under the Bavarian grant, which was previously announced in June 2021. And finally, net loss was $16.5 million or a loss of $0.24 per share for the quarter ended September 30, 2021, compared to a net loss of $14.3 million or a $0.26 loss per share for the quarter ended September 30, 2020. With that, I will turn the call back over to Steve.
spk07: Thank you, Tom. In conclusion, I just want to say that this year has been an eventful one for us so far, filled with new partnerships, new programs, and overall advancement of several compelling therapeutic programs. And we look forward to executing on additional key goals before year end. I'm looking forward to continuing clinical execution on our lead immuno-oncology and respiratory programs and to sharing our progress with you next year. Thank you for joining us on the call today, and we would now like to open the call for your questions.
spk06: Thank you. At this time, we'll be conducting a question and answer session. If you'd 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'd 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 star keys. One moment, please, while we poll for questions. Our first question comes from the line of Jonathan Miller with Evercore. Please proceed with your question.
spk05: Thanks so much for taking my questions, guys. I just have a couple here. I think I'm obviously very excited to hear the results from Part 1 of the 06-0 Phase 2A, but I want to get some more clarity on what we should be expecting from communication of that safety portion. I think investor expectations are all ready for a tolerable profile. What should we be expecting from that release that gets us comfortable while we wait for part two in the eventual patient population? Secondly, it was very nice to see the 220 preclinical data. I thought there were some very interesting things in the URAS presentation, but what are your latest thoughts on the early clinical development path here and especially timeline? When could we start to get a sense for differentiation versus the systemic antibody in humans?
spk07: Great. Thanks, John. Steve here. I'll try to take a cut at the first question and then also maybe frame the second question before handing it over in more depth to Shane. So on PRS-060 safety gate from Part 1a into the efficacy Part 2 of the Phase 2a study, I think it's good just to look where we are and what we're going to need to go through. So we noted that we completed dosing. of the first two doses and placebo in the safety part, initial safety part, where the goal there is to assess safety, tolerability, and pharmacokinetics. So as this is a blinded study, there's an unblinding process and then a data calling and data review, and then a review within AstraZeneca governance in particular. So there will be a time for committees to meet and review the data and then conclude you know, whether or not to move forward into the phase 2A portion or the efficacy portion of the study. So we will be working closely with AZ to go through that process. And what we are going to plan to do, as we've guided previously, is we will be announcing that we're going through the gate into the efficacy portion, but we won't be announcing any data per se. The data that we will first present for this trial will be the full top line data from the complete study, so that's safety part and the efficacy part, which we're still guiding, will be next year. So I would say look for some sort of an announcement that would then note that we're progressing. And that's something that we will align officially on with AstraZeneca as we move into year end here. And we're looking forward to doing that as soon as we can. And we haven't guided on specific weeks or anything like that. But it's in the process now, given that the dosing has completed and we just got to go through the motions of unblinding review and reporting. Does that address your question? That makes perfect sense, thanks. And on 220? Yeah, so on 220, you know, we already put a thing forth, you know, just to remind everyone, our R&D strategy is to address clinically validated targets in nuanced ways over what are normally ostensibly validations for monoclonal antibodies. And as we did that with PRSO60 vis-a-vis dupilumab, we believe we're able to start doing that again with the IPF approach with CTGF antagonists against pamrevlimab. We've already shown superior target engagement. We've already shown the benefits through drug trafficking in preclinical studies over pamrevlimab in a number of studies that we presented at ERS. So the way this will ultimately pan out, of course, is in the clinical setting. But we will continue to avail ourselves to techniques that will show preclinically the potential benefits of a local approach. And so we're going to continue as we prepare for clinical development, we're going to also look at other preclinical and translational and mechanistic ways to reinforce why not only a local approach is the right way to go, but also that specifically against Pamrevlimab that we have a benefit. And so that's what we intend to generate. That's what we intend to disclose in due course as we work towards early clinical development with this program. Shane, I maybe said already everything that there is to say there, but I would give you a chance to comment if you want to add anything else in terms of how we specifically plan to articulate beyond what we've done, benefits over systemic and also in particular benefits over PEM Revlimab.
spk02: Thanks, Dave. And Sean, thanks for the question. So just in terms of the question, John, how are we going to demonstrate a differentiation from revlimab and then from an early clinical perspective, how should we see data flowing out? The differentiation over revlimab, as Steve said, is based on the fact that we feel we've got better target engagement for CTGF. We feel the ROOF administration facilitates better target saturation and really coverage of that target. And also, of course, you've got a better convenience for the patient. In terms of the preclinical evaluation of that, as you said, we did share data this year at ERS. We'll continue to characterize that, showing our ability to deliver our drug to the right areas of the lung. And there's a number of preclinical models and methods we can utilize to clarify that and further characterize it. in parallel to our IND enabling activities. In terms of the clinic, there's gonna be some standard components to this. Initially in the clinic, we have to look at safety tolerability and then start to drive towards those registrational endpoints. And one of the things that has made us very excited about CTGF as a target is the clarity of the reduction in the decline in lung function that was observed with Pamravlimab from their phase 2b study. So there's real markers from you know, in terms of what we want to see in the clinic. There's some standard components that we have to get through, of course, initially. And as we get closer to that date, the initiation of our clinical trials will certainly give more color on how we're approaching this. And, you know, in essence, we'll aim to get to that meaningful readout in as quick a manner as possible.
spk06: All right. Your next question comes from Roger Song with Jefferies. Please proceed with your question.
spk01: Great. Thanks for taking the question. So maybe three from me, two for 060. So I think Steve just mentioned you already completed enrollment for two doses, if I remember that correctly. you kind of said you will kind of dose up to three doses level, and just curious if the third dose still in place, you will do that later, or that's something already you think two doses is enough for the phase two. The second part of the 2060 is understanding you are conducting additional phase one med study, And AstraZeneca also doing the DTI study as well. Just curious when we will kind of – we should expect some data from those two studies.
spk07: Thanks, Roger. So your first question was, I think, the sequence of cohorts across both Part 1 and Part 2. And so by design, what AstraZeneca and peers had aligned on was that the placebo group and then the first two doses, so the low and the mid-dose, would be randomized at once and then be gating to the initiation of the efficacy portion in the part two, which would then run in parallel to the third and the highest dose in the safety part. And then after completion of the the low and the mid dose and the efficacy part, assuming that the data justified going into the high dose and the efficacy part, that would also follow. And all of that would complete and our guidance remains top line data next year for all of those patients who were enrolled in the study, both safety and efficacy. So hopefully that answers your question in terms of how things are sequenced and staged. And the second question you asked was around the data availability from the additional MAD work that we had done, I think, in the nebulized formulation in the phase one study where we enrolled phenol high, mild control asthmatics, and then any DPI bridging work that AstraZeneca had done in order to get a better read on PK in the bridge from nebulized formulation to DPI. We're working on manuscript studies. you know, manuscript drafting and submission and the finalization process. There are four of those together with AstraZeneca. So our intention is that these data will come out in the form of more comprehensive peer-reviewed publications in due course. It's all part of the review process. And so you'll know it whenever they're published. But that's all in process. Both of those are separate separate studies, separate manuscripts.
spk01: That's great. Thanks for the clarity here. Okay, my last question is related to 343. Just very interesting, you mentioned this kind of evolving landscape and you slightly changed the HER2 high population. Just curious, just to remind us, what's the key differences for this kind of HER2 high population? Also, you mentioned I think the 50% ORR and the reasonable DOR should be very meaningful for this population, maybe just provide some clarity around the DOR, what kind of a DOR you're expecting for this population. Thank you.
spk07: Sure. Thanks, Roger. I think it's good just to contextualize again, Sinra. in terms of what it is and isn't relative to HER2 engagers. And so remember, we think of this as primarily a 4,1BB immuno-oncology T-cell agonist or immuno-agonist that uses 4,1BB primarily as a hook and a cluster mediator. And based on the data that we generated preclinically and clinically, we do see a great opportunity for this program to be tested in HER2 low and separately in HER2 high. And we reiterated today the rationale for HER2 low, given that there's just been a dearth of progress in there. And the second line, you know, standard of care has been as such for quite some time. And at a 28% ORR, we think we can show meaningful benefit by going for our targeted bogey of 40%. Now, HER2-HI, because of all the HER2 antagonists and HER2 disruptors in the space that uses HER2, primarily as the mediator for disease intervention, there are a number of other players in that space, and it's a very dynamic space, as you probably all are aware. So even though this is primarily SINRA as an IO agent, we do contend with the other HER2-engaging modalities that are in development. And so as we looked at the HER2 landscape in a HER2 high setting, we still think that in the second line, we do offer something that is number one, very different than other engagers that are out there. And number two, setting a bar of 50% ORR, plus with the intended durable benefit of an immunotherapy, we still think that that composite remains very relevant. Now, the difference in the last year or so is the nature of evolving standard of care and how that would impact the types of patients that we could get in various geographies. And as part of Tim coming in as our chief medical officer, we had over the last couple of months some really good discussions with him and with advisors, and we've concluded that making this adjustment to second line is the right way to go here, second line only. And I think it would be good maybe Tim can share in his few words or his own words what he thinks is right to do here and why we've now tightened or focused the enrollment to second line only.
spk03: Thanks, Steve, and thanks, Roger, for the question. Great question. So, yeah, obviously gastric cancer is a heterogeneous population to begin with. We know that as a general principle in oncology, patients have less of a response rate with later lines of treatment. And so when we had those KOL interactions and really dove deep into the data, we realized we would benefit the program and our decision-making down the road by really tightening up the population that is to really focus the HER2 high on the second-line population. where we have the most robust benchmark data. Steve just mentioned the rainbow publication. Obviously, that's 28% response rate. She asked about the duration of response. This rainbow, of course, it's published as 4.4 months, so we would anticipate a significant benefit when we add SINRA to RAMPAC over that, and that is confirmed with our investigators as well. And I think we have reason to believe that we will be able to deliver that based on the phase one data that we've shown at ASDR this year and that's shown before at SITC. So, yeah, just to conclude, SINRA has a very different mechanism of action. It's envisioned to be an option for second-line patients. It's an evolving landscape, and we're adapting our strategy to this ever-evolving landscape.
spk01: Got it. Really appreciate it. Thank you. That's all from me.
spk06: Thanks, Roger. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now. One moment, please, while we poll for more questions. Our next question comes from the line of Matt Phipps with William Blair. Please proceed with your question.
spk04: Good morning. Thanks for my question. So on 060, you mentioned dosing is done. Is the kind of blinded data in-house? There's also a four-week follow-up period. So I'm just wondering on timing if we still need to wait for that four-week follow-up period before they will do any unblinding. And then will you let us know when that third dose in the Phase 1B completes the safety portion. And then lastly on 06-0, for the, you know, Phase 2 data that we get next year, is that all three doses or, you know, at least it would be the first two doses?
spk07: Right. Yeah, so thanks, Matt, for the questions. So your first question was getting into timing on the announcement of passing through the gate based on the The fact that we've announced all patients have been dosed in the Part 1A and that there is a 30-day follow-up period. I don't know, Tim, you want to comment on the aspects of the review process from here on out. But again, we're not guiding on a specific date. And remember, no data. And then we'll come back to your question on Phase 2A top line in a second. Yep.
spk03: Thanks, Matt, for the question. Great question. So, yeah, as you pointed out, there's a four-week safety follow-up period for the patients enrolled in the study. And there will actually be, well, first of all, as Steve mentioned, we completed enrollment of the first part of the study. The data is in-house. It's being analyzed as we speak in a blinded fashion. There will be a safety review committee held coming up, and the four-week follow-up data will be available later on to complete the data set for this first part of the study. Efficacy, safety available for all patients right now. Follow-up data will come very soon.
spk07: And Matt, just to add a little color on your final question, so the Part 1B of the safety study would be that third and highest dose, which will, as I mentioned earlier from John's question, I think was it will run in parallel to the first two doses in the efficacy part. I think our current plan was not to to announce any results from the part 1B of the two-part study, and just to bulk everything together in the phase 2A top line of the entire study. And again, just to make it crystal clear, the objective is that the top line, which we intend to disclose next year, will include the entirety of the study. It's everything. And AZ, of course, will be able to power the enrollment to match the number of sites, number of jurisdictions to meet that expectation. And that is currently the plan is that we would dose in efficacy that which passes safety.
spk04: Yeah. Okay. Thanks. On 343, it seems like If I was reading or understanding correctly, that this second line focuses for the chemo combo and HER2 high alone. Is the Ducatinib combo for HER2 low strictly second line as well, or is that one still a little bit broader?
spk07: Yeah, it's a great question. I'll turn that over to Kim. I think this is because of the dearth of emerging standard of care. That one's far more manageable. than HER2 high, but we'll let Tim comment on that.
spk03: Yeah, thanks, Steve. Yeah, indeed. The HER2 high population obviously is a very competitive space, new entries on a regular basis. HER2 low, arguably, and speaking with a lot of external consultants in the eastern part of the world as well as in the western part, is an equally, some might argue, an even higher unmet medical needs. So, there is not much out there for patients, even in clinical trials, beyond the approved chemotherapy regimen. So, there is not even an established second line therapy, let alone a third line. So, at this point, we feel that it is most pragmatic to have a second line plus indication for the HER2 low population. while at the same time, as we discussed earlier, really tightening the criteria for the virtue high part of the study.
spk04: Great. Thanks, Tim. And last quick one. So 344, congrats on getting a couple approvals to start trials there in countries. Are you waiting for an IND clearance in the U.S. to start that trial or will that start ex-U.S.?
spk07: We haven't guided on specific jurisdictions. I think what we did say in the past, and we'll just refer back to that, is that we learned a lot from our initial escalation in the U.S. with CINRA. And of course, that has allowed us to calculate our engagement with FDA accordingly as we look for the most efficient way to escalate. But given the competitive nature of the space, we haven't yet disclosed which jurisdictions we have gone into. But that will come out in, you know, CT.gov filings and other regulatory filings in due course. All right. Thanks, guys. All right. Thanks a lot, Matt.
spk06: Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Mr. Stephen Yoder for closing remarks.
spk07: All right. Thanks, Hector. And nothing to add other than to thank everyone again for your attention today and for your continued support of PIRIS. Have a great day.
spk06: This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.
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