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spk02: Ladies and gentlemen, and welcome to the Paris Pharmaceuticals Inc. Third Quarter Earnings Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Tom Burrs. Sir, the floor is yours.
spk03: Thank you. Good morning, everyone, and thank you for joining us for our third 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 outlook on our pipeline. It's O'Coffman, our chief scientific officer, and Shane Olwell, our chief development officer, who 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.pyrus.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 PIRIT, including statements related to the timing and progress of our clinical trials and preclinical programs, including the anticipated timing for the reporting of data, 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 PEIRS undertakes no obligation to update any statements to reflect future events or circumstances. With that, I will now turn the call over to Steve.
spk06: Thank you, Tom, and thank you to everyone for joining us today for our third quarter 2022 earnings call. Today, I will give an update on how our lead programs are progressing. what upcoming catalysts to expect, and exciting new programs we have announced recently. We are driving towards numerous catalysts and inflection points over the next year across both our respiratory and our IO franchises. More specifically, within respiratory, in addition to preparing for the Phase 2A readout and subsequent opt-in decision for Alericabep, also known as PRSO60 or AZD1402, we are advancing a pipeline of wholly-owned, highly differentiated inhaled respiratory products. Similarly, within IO, we are expecting to have initiated expansion of PRS344 in co-development with Servier while anticipating clinical starts of 401BB-based IO assets by collaborators CGEN and Boston Pharmaceutical as we continue to be a leader in the realm of targeted 401BB co-stimulation. By early next year, we expect there will be three 401BB co-stimulations MABCALEN, or antibody anticalin fusion bispecifics in active clinical development. But before I go into these details, I will give a more in-depth overview on the respiratory franchise. In the Phase IIa trial of the dry powder-formulated iliricabep, an inhaled IL-4 receptor alpha inhibitor that we are developing with AstraZeneca for the treatment of moderate to severe asthma, I'm pleased to report that AstraZeneca has completed the enrollment of Part 1B, which is the safety of the 10 milligram cohort, while enrollment continues for Part 2, which is efficacy of the 3 milligram cohort versus placebo. AstraZeneca also is making great strides in addressing enrollment challenges encountered for the efficacy portion of this study. During last quarter's earnings update, we announced that AstraZeneca was pursuing regulatory and ethical submissions across all jurisdictions where the study is active with the objective of improving speed of enrollment and focusing enrollment into the three milligram cohort. AstraZeneca has since completed these submissions in all territories with acceptance and implementation tracking according to expectations. With these changes being implemented, top line results from this study are expected to be recorded in third quarter of next year. These results will include the safety data of the 1 milligram, 3 milligram, and 10 milligram dose cohorts and efficacy data from the 3 milligram cohort. As a reminder, the primary endpoint in this study is FEV1 improvement at four weeks versus placebo. This important data set alongside a development plan and a budget from AstraZeneca will trigger an opt-in decision for either 25% or 50% of cost sharing. Being in a strong position to opt-in if data are positive remains one of the highest company priorities for the coming year. Also within the AstraZeneca Alliance, we do continue to advance two discovery stage programs alongside IlliricaBEP. We retain co-development and U.S. co-commercialization options for these two programs. I would now like to spend some time discussing the fully proprietary inhaled respiratory programs we are developing, PRS-220 and PRS-400, given that the data we have generated so far with IlliricaBEP have strengthened our conviction in the validity and differentiation of our inhaled therapeutic protein approach. Earlier this week, we announced the dosing of the first subject in the phase one study of PRS-220, an inhaled antichalin protein targeting connective tissue growth factor, or CTGF, for the treatment of idiopathic pulmonary fibrosis and other forms of fibrotic lung disease. The study will evaluate the safety, tolerability, and pharmacokinetics of an oral inhaled nebulized formulation of PRS-220 in healthy volunteers. This is the second inhaled antichalin-based program we are bringing into the clinic, and we expect to report the outcome of this study next year. As a reminder, this work is partially funded by a grant from the Bavarian Ministry of Economic Affairs, Regional Development, and Energy within the framework of the Bavarian Therapy Strategy to Combat the COVID-19 Pandemic, or also known as Biotherapy 2020. Beyond PRS-220, we recently unveiled another proprietary inhaled respiratory program at the 2022 European Respiratory Society's International Congress called PRS-400, which is an inhaled JAGD1 antagonist we are developing for the treatment of muco-obstructive lung diseases. A wealth of third-party data supports that upregulation of the JAGD1 notch signaling can cause goblet cell metaplasia, hyperplasia, mucus hypersecretion, and mucus plugging. It also shows that downregulation of this pathway can drive goblet cells toward a ciliary phenotype. However, systemically administered drugs targeting notch signaling have caused systemic side effects and tolerability issues such as GI toxicities. PRS-400 is designed to block JAG1 notch signaling locally in the lung via oral inhalation with the objective of reversing, independent of stimulus, goblet cell metaplasia, hyperplasia, and mucous plugging, as well as increasing the number of ciliated cells. Preclinical data presented at ERS showed that in vitro, multiple PRS400 drug candidates can penetrate mucus-coated epithelia to potently inhibit JAG1-induced signaling on lung epithelial cells, thereby reducing mucin expression. We also achieved in vivo proof of concept with PRS400 candidates in an IL-13-induced mucus hypersecretion mouse model, not only by significantly improving mucus score and reducing goblet cell numbers, but also by significantly increasing a key marker of ciliary cells. We are excited about this program because it follows the same local treatment approach via inhalation we are taking with Aliricabep and PRS220. Moreover, JAG1 represents a highly translatable target that we believe has significant potential to treat a variety of mucobstructive diseases, and there is a strong rationale for a local inhaled intervention given the desire to avoid GI toxicities. We are continuing to work on this program in preclinical work and look forward to giving further updates in due course. Turning now to our I.O. franchise, our MAP-KALIN by specifics pipeline also has some exciting updates, including a new partnered program announcement and upcoming first in human trial starts for program, multiple partnered programs. First, I want to note that enrollment of the dose escalation portion of the Phase 1-2 study of PRS344, or S095012, remains ongoing. PRS344 is a 4,1-BBPDL1, MAPK1 bispecific, for the treatment of solid tumors we are developing in co-development with Servier, and it is our lead I.O. program. We expect to present data from the study at a medical meeting next year for this program. As a reminder, we retain full U.S. rights for this program, and we will receive royalties on any ex-U.S. sales. Beyond PRS-344, Servier is continuing development of PRS-352, or S095025, which is an AUX-40 PD-L1 bispecific for which Servier has global rights. We also continue to work on a number of programs as part of our I.O. collaboration with CGEM, And I am pleased to announce the unveiling of the first of those programs, which is SGN BB228, also known as PRS346, at the upcoming CITSE conference next week. SGN BB228 is a first-in-class 401BB CD228 bispecific MAP-Kalen compound. The I&E for the phase one study for this program has recently been accepted, and CGEN plans to initiate this study in the coming months, at which point we will receive a milestone payment from CGEN. Beyond this program, CGEN continues to develop a second undisclosed bispecific program and has recently nominated the third bispecific program for initiation within the collaboration. As a reminder, we have a U.S. co-promotion option for one program in this three-program collaboration. Turning to our most recent IO partnership, in the next six months, we also expect the initiation of the Phase I study of PRS342 or BOS342, which is a 4,1-BbGPC3 bispecific MAP-Kalin compound licensed by Boston Pharmaceuticals, which is being developed in solid tumors. Both the C-GEM program and the Boston Pharmaceuticals program represent a broadening of our clinical 401 footprint in immuno-oncology. We are excited to have the support of our many partners in advancing the various applications of the anti-K-1 technology. Among these several partners is Genentech, with whom we signed a discovery stage collaboration for one respiratory target and one ophthalmology target last year, and which continues to progress. In addition to contributing R&D know-how and resources, our partnerships have served and continue to serve as an important source of non-dilutive capital, the importance of which cannot be overstated in these current markets. This concludes my prepared remarks, and I would now like to hand the call back over to Tom.
spk03: Thank you, Steve, and good morning again, everybody. Cash and cash equivalents and investments total 69% for the quarter ended September 30, 2022, compared to a cash and cash equivalents balance of $117.8 million for the quarter ended December 31, 2021. The decrease in cash is due to funding operations in the current year. Including the proceeds from anticipated near-term milestones, we will continue to make disciplined pipeline investments that demonstrate in the next year, and we believe this cash balance provides sufficient funding into the second quarter of 2024. R&D expenses were $13.6 million for the quarter ended September 30, 2022, compared to $18.9 million for the quarter ended September 30, 2021. The decrease is due to lower program costs as work related to the company's sponsored Phase I trial of Alericabib was largely completed in 2021, as well as due to lower manufacturing costs across all later-stage respiratory and immuno-oncology programs and lower consulting costs. These lower costs were partially offset by higher clinical costs for PRS-344 or S095012, higher preclinical costs for earlier-stage programs and an increase in personnel costs. G&A expenses were $3.9 million for the quarter ended September 30, 2022, compared to $4.1 million for the quarter ended September 30, 2021. The period over period decrease was driven primarily by lower professional service costs and lower facilities costs, partially offset by higher travel expenses. And finally, for other income, for the quarter ended September 30, 2022, 1.5 million of grant income was recorded with respect to PRS-220 compared to 1.8 million for the quarter ended September 30, 2021. The decrease is due to lower overall costs incurred Overall, net loss was $9.7 million, or a $0.13 loss per share for the quarter ended September 30, 2022, compared to a net loss of $16.5 million, or a $0.24 loss per share for the quarter ended September 30, 2021. With that, I will turn the call back over to Steve.
spk06: Thank you, Tom. We would now like to open the call for your questions.
spk02: 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. Questions will be taken in the order they were received. If at any time your question has been answered, you can remove yourself from the queue by pressing 1. Again, ladies and gentlemen, if you do have a question, please press star 1 on your telephone keypad at this time. Please hold while we poll for questions. Okay, our first question comes from Jonathan Miller with Evercore. Please state your question.
spk05: Hey, guys. Thanks so much for taking my question. And congrats on all the progress, especially all the collaboration progress. I just wanted to make a couple housekeeping things. The runway that you – runway guidance you've given, what clinical development, what internal clinical development does that include? Which of those programs, especially the ones that are slated to enter the clinic, are you funding through that runway? Okay. And sort of relatedly, you said that the middle PRS 060 opt-in level is quite easy for you to fund. Is there any risk to your ability to fund that next year, or are you really thinking about whether you can afford the higher opt-in level?
spk06: Hey, John, Steve, thanks for the questions. I'll turn it over to Tom to cover these, and then I can fill in with anything that you have residual questions on.
spk03: Yeah, thanks, John. Yeah, so the runway includes the ongoing 220 and 344, along with 60 costs. So those are the primary clinical assets that we have, and so those are, you know, the key to our sort of FD&A planning and continued development there. So, you know, again, a reminder that 60 right now, there's really limited costs in our books because that's that we refer to the grant that we received, and that's been really helpful in terms of pushing that forward and getting that into the clinic, as we just announced. So that's great progress there, and we appreciate their support. And then also 344 partnered with Servier, right, so about just under 50% funded by Servier there. So very cost-efficient strategy, and that's how we continue to budget this out. For those other assets that we refer, the partner's cost. So that could be, you know, again, next year, five clinical stage assets, and we're paying for about the total of one. I believe your second question related to the opt-in for PRS-60. And, right, like you mentioned, I think, you know, we continue to focus on the opt-in at the 25%, believing, again, that is manageable given that the the spread of the cost along with our shared development milestones that we would continue to get on that program that are meaningful to us is something that we think is, again, relatively affordable. We do have to think about, of course, their capital allocation across our programs, and I think if we were thinking about opting in at a higher level, I think that's going to be based upon the the quality of the top line results and how good those are and, you know, really the credit I think that we're going to be able to get hopefully externally for this program and moving into that clinical readout.
spk06: Yeah, thanks, Tom, for that. The only call that I would ask to the second question is just to remind everyone that the opt-in decision that we have, which is at our discretion and could be not at all, which we would not want to do, or 25% or 50%, we do not have to make that decision until after the top line data are revealed and we can talk about them as well as go forward plan and budget. So the external stakeholders will certainly have the ability to digest all of that. And there could be reasons, as Tom said, the data alone could be a basis for appreciation in value that allow us to opt in at a higher level than 25%. And, of course, there are things independent, extrinsic to PRS 060 that would create value in the company. That's why we have multiple programs, multiple franchises, and several partnerships. So when we consider the landscape, a potential catalyst next year, and the core being PRS 060 Phase 2A, but several other things, we are very encouraged about the ability to opt in, whether that's at 25% or beyond.
spk05: Great, great. That makes sense. And then maybe on PRS-220, the data next year in healthy volunteers, what can we expect to learn from that from a translation perspective? I understand there's not really good biomarkers at this target on IPF. Can you get on-target PD? Can you get some other measure out of that healthy volunteer study that will give you good confidence in your ability to deliver in patients?
spk06: Yeah, John, it's a great question. So at a high level, you know, I would frame what we're going to be looking at at the end of the Phase I study next year is The set of the data that we're going to be generating, sad, mad data, and healthy subjects, which will not have, I think we've already mentioned that, not have a wealth of biomarker data. And we know that that is a challenge with this particular intervention. However, we have two other important data sets that I want to keep in mind. One is the fibrogen panrevelumab data. The data will read out. We know that they've enrolled the trial. We expect the panrevelumab top-line data to come out of the Phase III study about the same time, probably from mid-next year. And we are working hard to generate a lot of preclinical data in the in parallel with our own program and benchmarking against other relevant controls. So when we have all of that, we will feel, I hope, very confident with the goal that we would make on moving forward in the phase two and also the dose. And Shane is online, and Shane can also comment a bit more on the types of nuances that one might be looking for beyond the SADMAP safety tolerability data from our study. Shane?
spk01: Yeah, thanks, Steve. So they're the fundamental things that we want to see in this study. But, of course, we'll also look at things like taste. We'll look at the PK exposure just to confirm that it's in line with what we have modeled. And then, as Steve said, as we build out the preclinical data set, we'll continue to model what we believe to be the most efficacious doses based on our understanding of the molecule, our understanding of anticholins as inhalable medicaments. And also, of course, keeping an eye on those trial readouts, such as the pamreplumab one, which will come mid-next year. We'll keep an eye on the emergency standard of care. And, of course, consider any additional data that we can build to support our differentiated mechanism of action, but also to support the most effective phase two study design.
spk05: Great. Thanks so much.
spk02: Okay. Our next question comes from Matt Fitz with William Blair. Please state your question.
spk04: Thanks for taking my question, providing an update. I guess just curious on 344 for data next year, could you remind us, is there any preference as far as tumor types for enrollment or PD-L1 expression levels? And then will the data next year just be from dose escalation, or do you think you'll also start to get into some expansion cohorts?
spk06: Thanks, Matt. I'll have an overview here before I turn it over to Shane on your question in more detail. For the timelines, as a reminder, we're currently still in escalation. We're pleased with the pace of escalation and so far as planned. And based on certain predetermined go signals that we would want to see to initiate expansion, We believe that that's something we would be doing next year, and there's a range of – there's a corridor based on data sets that we would want to generate beforehand, and that could be early to mid-late next year depending on the sets, and we're going to be data-driven on that. That's really important. So when we think about data next year, I think you should be thinking about that as escalation data. I would note, though, that the protocol does allow for backfilling, and as we would go to expansion, we would still have the ability to utilize backfilling options. So we would have potentially meaningful data, PD, clinical data, that would also be meaningful to inform the why we would have made a go in the first place into expansion, as well as a rationale for why we're picking certain tuber types in expansion. And at that time, when we announce a go in expansion, I think that would be a good time for us to acknowledge why we're going into certain indications and put more color on those specific indications, why they emerge as a priority for us. I mean, Shane can comment on some of the nuances you mentioned. Are there any preferential tumors being enrolled? Are there any PD-L1 cutoffs? So, Shane, I'll turn it over to you for some of those nuances on the trial.
spk01: Yes, certainly. Thanks, Dave. So, in terms of the dose escalation, so we do not have a PD-L1 cutoff from that perspective. We are also enrolling all commerce solid tumors into the study. Now, why are we doing that? We don't want to be overly prescriptive in terms of picking, selecting an indication for this purpose, or sorry, for this stage of the study. We also want to be very efficient in terms of moving through the cohorts. As Steve said, the study is going well. we are certainly benefiting from all of our knowledge gained on PRS343. We're also benefiting from all of the biomarker assays we had set up, you know, having that institutional knowledge in terms of what are meaningful modulations on several of these biomarkers. With regards to, you know, Steve mentioned the backfilling option. So we do have backfilling options in our cohorts. we can if we choose to bias those towards particular indications. With regards to, you know, the speed with which we will move from escalation to expansion, as Steve indicated, there is a bit of a dose range there that, as you know from the competitive programs, what we're looking for here is optimal biological dose. And, you know, there are predictions in terms of where one will see that, and we have the predefined conditions that we would say would warrant going into expansion in those indications that we have selected. As in when we initiate those expansions and the indication specific expansions, we can let you guys know why we selected them, but In essence, some of the things that we were thinking about was what's the probability of success here? We want strong proof of concept out of these escalations, but we also want a path to a BLA filing. So when we consider our knowledge of the biology, what's happening in some of the competitor programs, and also considering regulatory paths and risk-reward from a financial perspective, there were some of the things that came into the discussion when we were identifying the most high-priority indications to go for once we hit expansion.
spk04: Thanks for that, Shane. I guess there's one question on 060. Completed enrollment in the 10-meg cohort, has the safety follow-up been completed yet on those? Just kind of wondering if we can check the box on that, safety being okay at the 10-meg level?
spk06: Remember, it's a blinded study, and after enrollment, there is the treatment period, and then there's follow-up. So it will go through the same thorough review that we put the 1 and the 3 MIG cohorts through. So we would expect that, as we had had an announcement of passing the safety gate for the 1 and the 3 MIG cohorts earlier this year, we would expect to do a similar review. you know, review and analysis and an announcement in due course. But that still has to get through, you know, the dosing and the follow-ups. So, although we will not be, you know, moving the 10-Mig cohort into the efficacy phase, having that 10-mig safety data will be very valuable because it will, one, it will confirm, you know, if we pass the gate, it will confirm the drug is safe at quite high doses. And number two, really relevantly, it will allow flexibility for, beyond phase 2A to dose beyond 3 mg if we want to do that for whatever reason. So I would say stay tuned. There's a process and, you know, an unblinding process and assessment, and I would expect that we would do the same thing that we did with the 1 and 3 mg for the 10 mg. All right.
spk04: Thanks, Steve.
spk02: Okay. Our next question comes from Roger Song with Jefferies, please state your question.
spk00: Great. Thanks for taking our question and congrats for all the progress. A few quick ones for O60. One is since the protocol amendment by AstraZeneca, so can you just provide some color around the enrollment improvements and particularly as we see, you know, the COVID still live with us, but people start to wearing masks less and less. And do you start to see, you know, normal people for the efficacy portion or it's kind of a gradually kind of change over time? Maybe last quick one, just a follow up. I think, Steve, you mentioned 10 mag is for the safety. you're not going to do this for the phase 2A for efficacy, but is that possible? Just confirm, is that possible for you to go up to 10 in phase 2B or phase 3 later? If that's the case, what kind of a signal you need for you to make that decision? Thank you.
spk06: Great. Thanks, Roger. So your first question was around enrollment trends, and then the second one was, again, how the 10 milligram and other factors could – safety data from the 10 milligram and other factors could inform what we would do beyond Phase IIa, you know, beyond the 3 milligram dose. For the first question on enrollment, I would say we're not going to break out specific enrollment numbers. We haven't done that and we're not going to be able to do that. However, I would say there are probably three factors that would impact enrollment rates. You mentioned one is just the, you know, the broader environment, if masks are coming off more and if people get back to more of a normal lifestyle, if that then presents opportunities for more viral exposure and challenges, would that just drive up incidents and make the throughput overall higher? So that's one factor to consider. A second one is just more site engagement. And that's one that will, I think, per se, help to improve Enrollment rates. And the third point, which I think is the most meaningful, is the impact of the amendments. Remember, we said we were going to be broadening the funnel. We don't have to go into all the details. We talked about it pretty thoroughly last quarter. But we do believe that those amendments will squarely address a lot of the reasons for screen failures in the early parts of the study. And as those filings have been made and a number of those filings have been through the review process and been accepted, they're now just being implemented. So it's too early to be able to predict accurately how much they will bend the curve, but I would say that given, you know, Getting back to normal more and more on the lifestyle, the additional site engagement that AZ is committed to be doing, and then the implementation of the amendments over the next couple of months, that collectively gives us a good deal of hope and reason to believe that we will move the enrollment up meaningfully. And we just need more time to be able to assess that. And then, of course, we would provide an update in due course whenever we have more visibility on that. On the second question around the 10 milligram, what would we do with that going forward, the 10 milligram safety data? You know, I think the way we would look at it is, one, we wanted to have confirmed safety at the 10 milligram, you know, cohort. And so that will go through its process, as I mentioned in my answer to Matt's question. And then I think it's going to come down to, in particular, the efficacy readout. We've talked about what the bogey should be for safety. efficacy in terms of FEV1 against placebo, and we think being better than the border of what's clinically relevant would be really useful. And if it's better than that, then that's going to be very good. And depending on how much we think we could and want to push the dose beyond three milligrams to potentially improve efficacy even more, that coupled with the safety assessment would be two important factors that would govern that decision. So we have to be data-driven. We have to first confirm that the 10-milligram dose is safe, but I think that we will have enough parameters to be able to make an intelligent decision with AstraZeneca on if we want to go higher than 3 mg and what that would be. It doesn't have to go 3 to 10. It could be something in between, of course, and that's something that we would, again, opine on before we go forward in co-development.
spk00: Awesome. Thank you. Thank you for all the comments. Maybe just a very quick one for the cash runway. Given you have a lot of collaboration and the potential milestone payments, so just curious before this early 2024 cash runway, do you expect you will have meaningful milestones to extend the cash runway?
spk06: I'll turn that one over to Tom, Roger.
spk03: Yeah. Roger, we talked in our cash runway. We do include some of the near-term milestones that we have increasing confidence and visibility into, you know, in some of our partnered assets that we've talked about on the call today. So those are included. I think just in context, though, they're nice to have. They're certainly probably more modest than some of the AD-type milestones we've recorded in the past. So just for clarity, right, these are – I'm not quite at that, you know, the easy level for that because it was a later stage asset that we were putting into the clinic at that time.
spk00: Got it. Well, thank you for confirming that. All right. So that's all from us.
spk02: And it looks like that was our final question. I'll turn it back over to Stephen Yoder for closing remarks.
spk06: Thank you, Dagmar, and I just want to thank everyone again for your attention today, and thank you for your continued support of PIRIS. Thanks, everyone. Have a great day.
spk02: Thank you. This concludes today's conference call. We thank you for your participation. You may disconnect the lines at this time, and have a great day.
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