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spk06: Good day and welcome to your Pierce Pharmaceuticals, Inc. first quarter earnings call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to Tom Burns, CFO. Sir, the floor is yours.
spk01: Thank you. And good morning, everyone, and thank you for joining us for our first quarter 2022 conference call and corporate update. On the call today, we have Steve Yoder, our president and CEO, who will provide a corporate overview and outline on our pipeline. Tim DeMuth, our chief medical officer, Hito Kauffman, our chief scientific officer, and Shane Olwell, our chief development officer, will also be available for Q&A. You can access the press release released this morning on the investor relations page of our website at www.PIRIS.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 PIRIS, 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 PEARS undertakes no obligation to update any statements to reflect future events or circumstances. I will now turn the call over to Steve.
spk03: Thank you, Tom, and thank you to everyone for joining us today for our first quarter 2022 earnings call. My update will address key developments within our pipeline and across our R&D alliances before I turn back to Tom, who will speak to our financial results in the context of the present capital markets, which we believe reflect the value of having significant support from our biopharma partners and access to alternative sources of capital funding, such as grant funding. We'll then open the call for your questions. In the first quarter, we focused our resources on our four most advanced assets, with two belonging to our inhaled biologics respiratory franchise and the other two within our immuno-oncology bispecifics franchise. The lead asset in our respiratory franchise is PRS060 or AZD1402, where a crucial Phase IIa study in moderate to severe asthma is being driven by AstraZeneca. Next is our fully proprietary pulmonary fibrosis program, PRS-220, which we continue to advance towards a first-in-human study later this year as a high priority. Our two IO bispecifics are both clinical stage, and in the first quarter, we initiated the Phase II study of our most advanced program, synribofusp-alpha, also known as SYNRA, which targets HER2-expressing gastric cancers. We continue building momentum for our second program, PRS-344 or S095012, having received IND acceptance to enroll patients in the U.S. alongside our co-development partner, Servier, who holds ex-U.S. rights for this program. So I'm now going to provide further details on our progress within these programs together with a snapshot of anticipated catalysts in the coming quarters beginning with our respiratory assets, followed by our IO assets. Our lead respiratory program, PRS060, is an inhaled IL-4 receptor alpha inhibitor that we are developing with AstraZeneca for the treatment of moderate to severe asthma. In the first quarter, AstraZeneca initiated the efficacy portion of the Phase 2A study with the dry powder inhaler formulation given twice a day on top of the standard of care regimen of medium dose inhaled corticosteroids and long acting beta agonists or ICS LABA in moderate uncontrolled asthmatic patients, which is randomized one to one to one across the one milligram and three milligram dose levels plus a placebo arm. We previously announced the successful completion of the safety portion of both the one milligram and the three milligram dose cohorts in part one of the study which consists of 31 moderate asthmatics controlled on standard of care asthma therapy. Having established the safety of the DPI formulation at the one milligram and three milligram dose levels, AstraZeneca is also enrolling the safety portion of the 10 milligram dose level, which is randomized two to one treatment to placebo. Our earlier guidance for this study readout included reporting top line efficacy data by the end of the year. Now, given the geopolitical situation, along with the broader challenges amidst the ongoing pandemic, there is a heightened risk that more time will be required to deliver the top-line study results by the end of the year. AstraZeneca is currently in the process of conducting a thorough timeline re-forecast and working on strategies to mitigate any potential delays. An announcement of top line results from this study along with receiving a formal development plan and budget from AstraZeneca would trigger an opt-in decision for this program by PIRIS. We will then have 30 days to make our opt-in decision for co-development at one of two levels, neither of which includes an option exercise fee. At the first level, we would be responsible for 25% of the cost share through regulatory approval with a predetermined cost cap. At this level, for the lifetime of this product, we would receive sales royalties from single digit up to the high teens, plus the potential for multibillion-dollar sales milestones. We would also stand to receive development milestones that would represent approximately half of the capped development costs, making this an attractive and affordable investment opportunity. The second opt-in level would be at a 50% cost share without a cost cap, but it would enhance our economics, allowing us to receive a gross margin share in the mid-20% range for the lifetime of product sales. And in addition to and independent of the co-development options I just mentioned, it's worth reminding everyone that we also have the option to co-commercialize this program in the United States. Looking to our earlier respiratory pipeline, we continue to jointly work with AstraZeneca on three discovery stage programs for which we retain co-development and co-commercialization options for two of those programs. And moving beyond our AstraZeneca alliance, we continue to advance our wholly owned respiratory asset PRS220 towards the clinic, which remains on track to enter phase one this year. PRS220 is an inhaled anticalin protein targeting CTGF, or connective tissue growth factor, for the treatment of idiopathic pulmonary fibrosis, or IPF, for which we reported encouraging preclinical data last year. As a reminder, we received a $17 million government grant from the Bavarian government to support early stage development of PRS220 to also evaluate the program for the treatment of post-COVID pulmonary fibrosis. We also had the pleasure of hosting the president of the Bavarian state, Ms. Ilse Aigner, at our German facility this past quarter in association with this grant. IPF is a devastating pulmonary disease impacting between 3 and 5 million patients worldwide. with a mean survival time from diagnosis of just two to five years. Currently available treatments have achieved greater than $3 billion in sales, despite modest benefits and substantial side effects. We believe patients need more effective treatment options with better tolerability, which is why we are excited for PRS-220 to enter Phase I development in healthy subjects later this year. I would now like to give an update on our immuno-oncology pipeline. SINRA is a wholly owned 4-1-BB HER2 bispecific in Phase II development for the treatment of HER2 high and, separately, HER2 low gastric cancer. The Phase II study is a two-arm study evaluating SINRA in these different HER2 settings. The first arm is evaluating SINRA in combination with the standard of care regimen of ramiserumab and paclitaxel in 20 patients who have HER2 high gastric cancer. For this arm, we have a clear go-to-go criteria of an ORR objective response rate of at least 50%, 5-0, in addition to clinically meaningful duration of response and good safety and tolerability to continue further development of this program. We expect to report data from this arm of the trial in 2023. The second arm is evaluating SINRA in combination with the small molecule HER2 inhibitor to catinib in 20 HER2-low gastric cancer patients. For this arm, we would like to see an ORR of at least 40% paired with clinically minimal duration of response and good safety and tolerability to continue further development of this program. Although our initial projections for this arm included top line data this year, more time is needed for the enrollment of the HER2 low arm, and we have revised our guidance, now aiming to provide data on 20 patients in 2023 as we are guiding for the HER2 high arm. Because Synra would be the first targeted therapy to address HER2 low gastric cancer, education of the clinical community is required to properly engage this emerging subpopulation of what is classically HER2 negative patients. We are working closely with sites and investigators to interrogate the potential of this drug candidate in an area of truly great unmet medical need. Turning to our next I.O. program, enrollment is progressing in our global open-label Phase I-II dose escalation study of PRS344, also known as S095012, a 4,1-BB-PDL1 bispecific in patients with advanced solid tumors. As a reminder, PRS-344 uses the same 4-1-BB engager as in SINRA, which has shown single-agent activity in clinical studies. Thanks to the learnings from SINRA, as well as emerging data from the ongoing Phase I study outside the U.S. for PRS-344, we received FDA authorization to dose patients in our Phase I study at a higher dose than was originally permitted for SINRA, and in a manner that allows seamless enrollment across U.S. and ex-U.S. sites. As a reminder, we have exclusive commercialization rights for PRS 344 in the United States, and we stand to receive royalties on potential ex-U.S. sales through our partnership with Servier. Beyond 344, Servier continues the development of PRS 352, or S095025, which is an OX40 PD-L1 bispecific for which we jointly presented preclinical data at AACR last month. PRS352 has demonstrated superior potency to both mono-anti-PD-L1 and combination OX40 and PD-L1 therapy benchmarks in different in vitro assays. It also inhibits the PD-1, PD-L1 pathway with comparable potency to anti-PD-L1 antibodies stimulates human CD4 T cells, drives T cell stimulation in ex vivo cinnamogus monkey assays, and demonstrated an antibody like PK in vivo. As a reminder, we believe that the design of PRS352 may improve upon the limited OX40 pathway activation and anti-tumor effects shown by OX40 agonist antibodies currently in development, which rely on FC gamma receptor cross-linking for OX40 activation. Before turning the call over to Tom for a financial update, I would like to provide a brief update on some of our other collaborations. Boston Pharmaceuticals continues to advance PRS342 or BLS342, which is a 4-1-BB GPC3 specific towards the clinic, and we expect an IND to be filed within the next 12 months for this program. Additionally, we continue to execute well on our multi-program collaboration announced last year with Genentech for the discovery, development, and commercialization of locally delivered therapies for respiratory and ophthalmology diseases, further bolstering our respiratory pipeline while expanding the therapeutic applications for our anti-CALEN technology and platform. We have two active programs within our C-GEN collaboration, including one that has been successfully turned over to C-GEN and one that is ongoing in a joint collaboration phase. This concludes my prepared remarks, and I would now like to hand the call back over to Tom.
spk01: Thanks, Steve, and good morning again, everyone. We recognize it's been a very challenging time within the capital markets and biotech sector in general. Valuations are down significantly across the board, and with that, we continue to be mindful of how we continue to deploy capital to build value based upon our broad program pipeline. First, I wanted to report that we have cash, cash equivalents, and investments totaling $100.3 million for the quarter ended March 31, 2022, compared to a cash and cash equivalents balance of $117.8 million for the year ended December 31, 2021. The decrease, of course, was attributed to funding operations in the first quarter. Next, I wanted to remind everyone of the key role that our partners and government grants play in the efficient structuring of our program spending. AstraZeneca is fully funding the development of PRS-060 through at least the ongoing Phase 2A study, subject to our opt-in decision. Servier funds approximately half of the development cost of PRS-344, where we retain the U.S. rights, and the generous grant support from the Bavarian government funds more than 50% of the clinical readiness and forthcoming Phase 1 study for PRS-220. CINRIBA Plus Alpha is the only program that we are fully funding, and we have efficiently designed the 20-patient per arm, two-arm study to utilize the same sites. Additionally, we have set clear and high bars to govern go, no-go development decisions and further cost commitments on that program. Considering the ongoing development plans for our lead assets, which include some of the cost reimbursement structures that I've just described, we believe reported cash is sufficient to fund operations into the fourth quarter of 2023. R&D expenses were $14.1 million for the quarter ended March 31, 2022, compared to $16.6 million for the quarter ended March 31, 2021. The decrease is due to lower program costs on PIERA-60, as work related to our sponsored Phase I trial was largely complete in 2021, and lower manufacturing costs for synribofus-alpha, both partially offset by higher clinical costs for synribofus-alpha and higher clinical and manufacturing costs for PRS-344 as we moved into Phase I development. Separately, higher personnel costs due to higher headcount was partially offset by a reduction in consulting and other professional service costs. Moving on to G&A expenses, Those were $4.4 million for the quarter ended March 31, 2022, compared to $4.1 million for the quarter ended March 31, 2021. This period-over-period increase was driven primarily by higher non-cash amortization of deferred costs related to collaboration revenue earned this quarter, partially offset by slightly lower legal and audit costs. For the quarter ended March 31, 2022, $2.1 million of grant income was recorded on PRS-220. And finally, net loss was $5.1 million, or a seven cent loss per share for the quarter ended March 31st, 2022, which compared to a net loss of 4.2 million, or also a seven cent loss per share for the quarter ended March 31st, 2021. And with that, I'll turn the call back over to Steve.
spk03: Thank you, Tom. Before taking everyone's questions, I would like to reiterate those points about our success in partnering in grant procurement, which has enabled us to leverage a significant amount of non-dilutive capital to advance a broad and diversified pipeline while retaining significant or fully proprietary commercial rights in these programs. We continue to advance our innovative pipeline, and we are looking forward to adding PRS-220 as our fourth clinical stage program later this year. We believe that upcoming data readouts for these programs will bring us closer to getting our therapies to the patients who need them most. The current biotech landscape is not without its challenges right now, but we believe we have the right pipeline, the right partners, and the right people to deliver on our mission. We look forward to keeping you apprised of our ongoing progress, and with that, thank you for joining us on the call today, and now we'd like to open the call to your questions.
spk06: Thank you. The floor is now open for questions. If you do have a question, please press star 1 on your telephone keypad at this time. If you're using a speaker phone, we ask that while posing your question, you pick up your handset to provide the best sound quality. Again, if you do have a question or comment, please press star 1 on your telephone keypad at this time. Please hold a moment while we poll for questions. We'll take our first question today from John Miller with Evercore. Please go ahead.
spk05: Hi, this is Jessica on for John Miller. Two questions. First one, given the possible pushback of the phase 2A trial to next year, is there any chance that we'll see more data from the phase 1 portions this year? What about the phase 1 portion of the 10 milligram dose? And then secondly, is the slower enrollment of the HER2 low combo with PIRS 343, a function of site selection and trial conduct, or is there a lack of underlying demand for more trials in the space? Put another way, how tough is the competition for these patients given the landscape of HER2 development? Thank you.
spk03: Thanks for the two questions. So I'll start with the first question and then highlight maybe the high level of the second and maybe turn it over to Tim Demuths. to answer more details on the HER2LO question. Your first question, I think, concerns the timing for any data for the PRS060 study with AstraZeneca, whether that's the efficacy data or the safety data, particularly the high-dose safety cohort that's being enrolled in parallel to the first two doses in efficacy trial. I mean, as we mentioned, AstraZeneca is undertaking currently a thorough re-forecast for the entire trial. This includes both the efficacy arm and the safety arm. We had mentioned in prior communications that we did rely quite a lot on Ukraine for the safety part of Part 1A. And we would have relied on them as well for Part 1B. And so that obviously is something we can't do given the unfortunate situation that everyone knows about in Ukraine. So that's one thing to keep in mind. We're going to just let AstraZeneca work through a very thorough re-forecast and would expect that we'll be able to provide an update across the board in the next quarterly corporate update at the next earnings call, which will be in August. For the second question about HER2 low, as we mentioned, in addition to just ongoing challenges of enrolling patients in the pandemic environment, we do have nuances with the HER2 low arm in that this is an emerging subpopulation being characterized that is otherwise been known for a long time as HER2 negative. And so we're working through bringing additional sites on board on plan beyond the U.S., And we're also working on education of how to best bin or delineate patients between who have what we're calling HER2 high as well as HER2 low, which would go into one of the two different arms. Tim can provide a bit more color if you want to, Tim, but that's at a high level. It's a composite of factors.
spk00: Yeah, maybe just to quickly reiterate, HER2-negative gastric cancer is a great, great unmet medical need. And as Steve pointed out, the HER2-low population we're looking at is really if you want a subpopulation of HER2-negative that is defined by the IHC score that is – standardly reported by pathologists. And the education piece that we're currently very actively engaging in is just talking with investigators, study nurses, et cetera, to make them aware of that particular definition of HER2 low by IHC score and help them to pinpoint patients and make patients aware of this clinical trial. So we feel good about these education efforts. that we're expanding about adding as planned sites and geographies to deliver that study to patients who need hope in gastric cancer. Thanks, Tim.
spk06: For our next question, we'll turn to Roger Song with Jefferies. Please go ahead.
spk04: Great. Thank you for taking the question. So the first question also relates to 060. Given this kind of uncertainty around the enrollment and the time that they read out push-outs, is that possible you will read out separately for your current dose cohort, whether it's 3 versus 10, later on? Because I think the initial plan is you will read So just curious about the potential kind of data readout strategy there. Thank you.
spk03: Thanks, Roger. And your connection wasn't maybe perfect, but just to make sure I got your question, you were asking in light of the, again, the potential, the heightened risk for a delay in the top line readout for efficacy. You were asking, I think, if there's a potential to separately read out different arms of the efficacy portion as opposed to waiting for all in one go. Is that correct?
spk04: Yeah, that's right.
spk03: No problem. Listen, I think, again, we're going to wait for a thorough forecast and then leave, you know, all options open right now. And we're, of course, going to be collaborating closely with AstraZeneca, who ultimately has the final say. But I trust that they will act reasonably because this is, of course, a very high-priority program for them from our vantage point. I would just say that we don't want to do anything that will jeopardize the integrity of the trial. So we wouldn't want to rush anything if it meant that it would compromise all of the great efforts that are going into this very large global study with significant resources being invested by Astra as a priority program. So we'll see, but I wouldn't want to set an expectation that that's what we would do. We have to wait and see what the outcome is of the re-forecast first.
spk04: Yep, that makes sense. Thank you. That's all from me. Thank you.
spk03: Thank you, Roger.
spk06: Our next question comes from Matt Phipps with William Blair. Please go ahead.
spk02: Hey, good morning, guys. You know, Steve, you obviously did give us a little warning on the fourth quarter about geopolitical risk around the 06-0 trial, but it does seem like the language is stronger in this quarter's press release. Is that a fair statement? And then... Looking at the trial on control.gov, which I realize is not always the most up-to-date, there were a number of new sites that began recruiting in late March, updated late March, across multiple countries. But since then, it doesn't seem like there's been any additional sites recruiting. Is that up-to-date, or how spread out is the current recruitment geographically?
spk03: So, Matt, your first question was, is there a change maybe in risk appraisal between the fourth quarter earnings call of last year and the first quarter? And I would say, yes, it's fair to say there is. And that's based on, again, ongoing situation in Ukraine, ongoing real-time assessment of enrollment in still a COVID environment and a post-COVID environment where there's still quite a lot of masks and some of those General challenges of enrolling respiratory studies, you know, across across many different geographies given given the pandemic. So, yes, there is an increased risk. We're not changing. We're just surprising of risk. And again, waiting for a very thorough forecast to to better inform. a more definitive guidance later in probably the next earnings call. With respect to the ongoing operations of the trial, I mean, AstraZeneca is driving that. We're very confident in their ability. They have many, many sites that they'll be continuing to activate and use for recruiting on a global basis. As you mentioned, CT.gov isn't updated in real time. There is a regular cadence. I would say it's approximately on a monthly or no less than bimonthly update, typically by AstraZeneca. But they are working really hard to onboard sites and get all the necessary supply chain elements in place, which is also something that we have to work through in a supply chain constrained environment. So I'd say keep your eyes on ct.gov. It's not real time. but you can think about that as being active on a monthly or bimonthly basis in general.
spk02: Okay, thanks. Switching to CTGF, we're going to see the first clinical readout from FibroGen's IV antibody against CTGF in non-IPF indications, pancreatic cancer and DMD, which are obviously different. very different diseases, different endpoints, but do have fibrotic components to them. So do you think there's any read-through on really just more proof of mechanism for CTGF inhibition from these trials, or are you just really waiting until the IPF trial, which they recently guided to, I think, mid-next year readouts?
spk03: Yeah, I mean, I don't want to rule out a read-through or, you know, a read-through from indication to indication. What we're looking at are two key points, is that we really think the data from the Phase 2A study in IPF with Pamrelumab are real. It was pretty large. It was randomized. And from our vantage point and the number of advisors that we continuously talk to, people believe those data are real. And also, I believe that the Pamiravimab IPF trial has now been fully enrolled, and we would expect very meaningful data in that indication study to be available next year. And that, to us, would be the most relevant of all of the areas where Pamiravimab is being clinically studied. I think even within IPF, there are many important nuances, including the benefit potentially of local engagement of Q20 versus panrevimab, and also many other benefits from convenience and even patient selection that we're still working on. I would say that we'll keep our eye on it, and we'll certainly... you know, assess potential impact. But I wouldn't be able to tell you beyond that today if we think that there is a meaningful reason. I would say the answer is no.
spk02: Got it. Thanks, Steve. Appreciate it. Sure.
spk06: This concludes our question and answer session. I would now like to turn the call back over to Mr. Yoder for closing remarks.
spk03: Thank you so much. I have nothing really to add other than to say thank you, everyone, for your attention today and for your continued support of PURIS. Thanks so much for joining us today, and have a great day. Bye-bye.
spk06: This does conclude today's teleconference. We thank you again for your participation. You may disconnect your lines at this time, and have a great day.
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