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spk00: Good day and welcome to the Polarity TE Second Quarter 2022 Business Update and Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jacob Patterson, Chief Financial Officer. Please go ahead.
spk01: Thank you, Operator. Good afternoon, and thank you for joining Polarity TE's call to discuss Second Quarter 2022 results. I'm Jacob Patterson, Chief Financial Officer. On the call today are members of the executive team, which includes myself and Richard Haag, Chief Executive Officer and President. Before we begin, I would like to remind everyone that today's discussion will include statements about the company's future expectations, plans, and prospects, including, but not limited to, statements about our financial resources, operations, our open IND and related clinical trials, and INDs and clinical trials for other skin PE indications. which constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. These forward-looking statements are based on our current expectations and may differ materially from actual results due to a variety of factors, including but not limited to those detailed under the caption risk factors that are described in our annual report on Form 10-K for the year ended December 31, 2021, and subsequent reports filed with the SEC. Any forward-looking statements made on this call speak only as of today's date, Thursday, August 11, 2022, and we disclaim any obligation to update such statements to reflect events or circumstances that occur after today's call, except as required by law. I'd like to highlight to participants that the call is being recorded. A replay of the recorded call will be available on our website in the investor relations section shortly following the conclusion of the call. Additionally, it is the property of Polarity TE and any redistribution, retransmission, or rebroadcast of the call in any form without Polarity TE's expressed written consent is strictly prohibited. I would now like to turn the call over to Richard Haag, CEO.
spk02: Thank you, Jake. And good afternoon and welcome, everyone. I have three important topics to discuss today. First is an update on our current phase three covered DFU trial. Second is an update on our recent type B RMAT meeting with FDA. And third is our plan of operation for advancing the development of skin TE. Our 100 subject phase three pivotal covered DFU trial began enrolling in late April with three active sites. As of today, we now have 10 subjects enrolled and 11 active sites, with the goal of having up to 20 active sites by the end of Q3. We expect to have the first 50 of the 100 total subjects enrolled by the end of Q1 in 2023, and be in position to read out interim data approximately six months later. We are targeting full enrollment by year-end 2023, with follow-up on all subjects completed by late Q2 or early Q3 in 2024. As a result of the RMAD designation, we were able to engage in an expedited dialogue with the FDA on various topics related to the steps needed to support a biologics licensing application, or BLA, for skin to eat. Based on that dialogue, the company plans to pursue a broad indication for diabetic foot ulcer wound types and will run a second multicenter randomized controlled trial under its current IND to support the submission of a BLA. We plan to work closely with FDA regarding the design and implementation of the second clinical trial. We have a plan to start that trial in early 2023. Based on the clinical development plan outlined in our approved IND and the RMAT designation granted to Skin TE for both DFU and BLU, We had anticipated that we could run a second trial in VLU in combination with our covered DFU trial to potentially get a multi-wound type indication. However, FDA would not provide the commitment we felt we needed to support that approach. After considering FDA's feedback, we determined that pursuing a broad indication for all Wagner-grade DFUs would be highly advantageous given that these wounds clearly represent the largest market opportunity within the category of chronic cutaneous ulcers, and for the fact that there are very limited treatment options for advanced grade DFUs. This approach should also allow us to use many of our current clinical trial sites, and as a result, it has the potential to be faster and less expensive to complete than the VLU trial considered under our previous plan. If we are successful in gaining alignment with FDA on our second trial, we believe that it will be possible to generate the necessary data from both trials to allow for BLA submission in the first half of 2025. Additionally, FDA indicated that data generated from these trials could potentially be leveraged to support an expedited submission pathway for other wound types in the future. We plan to further engage with FDA to fully define our development plan for other wound indications in the coming months. Lastly, I would like to briefly share our thoughts related to our plan of operation and corporate strategy. Because we believe skin TE has the potential to be a game-changing treatment for a range of complex, hard-to-heal wounds, our objective is to get skin TE back on the market in the most efficient and effective manner possible. We have been highly encouraged with the amount of recent interest we've received from others in the industry since reporting on the excellent progress we've made in 2022 with the IND approval, the kickoff of our phase three cover trial, and the RMET designation. While we have been successful raising capital in the past and will continue to seek opportunities to raise capital to fund the development plan for SCIN-TE, it is important to note that we are firmly committed to exploring strategic and synergistic opportunities that would support our business plan and subsequently enhance shareholder value. I would now like to turn the call over to Jake for a financial update. Jake?
spk01: Thank you, Richard. Operating costs and expenses decreased 3.6 million, or 35%, for the three-month period ended June 30, 2022, compared to the three-month period ended June 30, 2021. For the three-month period ended June 30, 2022, cash used in operating activities was 8.2 million, which includes 2.1 million of professional fees incurred in connection with our pursuit of a strategic transit action that did not materialize, 0.5 million of costs related to our June offering, and 0.6 million of clinical trial-related expenses. Excluding these items, our base operating cash used in operating activities was $5 million, or an average of $1.7 million per month, compared to $4.1 million of cash used in operating activities, or an average of $1.4 million per month for the three-month period ended June 30, 2021. As of June 30, 2022, we had two We had $20.5 million in cash and cash equivalents and working capital of approximately $19.4 million. We believe cash and cash equivalents on our balance sheet will fund our business activities into the first quarter of 2023. Our goal continues to be maintaining a base operational cash burn, which excludes costs associated with clinical trials and BLA-related activities, well below $2 million per month on average. I'd now like to turn the call back over to Richard for additional operational remarks.
spk02: Thank you, Jake. In closing, I'd like to reiterate how encouraged we are by the progress we've made year-to-date. With the ramp-up of our first pivotal trial and with the additional access we have to FDA through the RMAT designation, we are well-positioned to execute on the steps leading to the submission of our first DLA for Skin TE. I'd like to thank the entire Polarity TE team for the dedication and hard work that has allowed us to get to this point. I would also like to thank our investors for their continued support of the company. Operator, I'd now like to open the call for Q&A.
spk00: Ladies and gentlemen, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. Please ensure that the mute button on your telephone is switched off to allow your signal to reach our equipment, and please state your name before posing your question. The voice prompt on the phone line will indicate when your line is open. Again, it is star one to ask a question. We'll pause briefly to allow all participants the opportunity to signal for questions.
spk03: It appears there are no questions.
spk00: Therefore, that concludes the Polarity TE second quarter 2022 business update and financial results conference call. We thank you all for your participation.
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