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spk06: Hello, and welcome to the Coin Pharmaceuticals Limited third quarter financial results and business update conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist or pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, today's event is being recorded. I now would like to turn the conference over to your host today, Gordon Dunn. Please go ahead, sir.
spk00: Thank you, and good morning. We appreciate you joining us on today's conference call. With me on the call are Dr. Michael Myers, CEO, and Denise Carter, COO. We're pleased to provide an update on our progress over the quarter and discuss Coin Pharmaceuticals Q3 2022 financial results. Please note that our operational and financial results press release is now available on Coin's website. To begin, Michael will provide a corporate, clinical, and operational update, following which I will review our Q3 2022 financial results. I'll then hand the call back to Michael for further comments. We'll also be pleased to answer any questions that you may have at the end of the call. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially from the information expressed or implied by these forward-looking statements. For more information regarding such risks and uncertainties, please see the risk factors outlined in the company's filings with the SEC. Any forward-looking statements are made only as of today, and we disclaim any obligation to update these forward-looking statements other than as required by law. Please see the forward-looking statements section in our financial results release issued this morning for more information. Now my pleasure to turn the call over to our CEO, Michael Munters.
spk02: Thank you, Gordon, and good morning, everyone. COIN continued to make significant progress in the last quarter as we execute on our plan to build the organization into a global rare disease company, and I am very pleased to provide an update of our most recent achievements on this call today. The key highlight of the quarter was the successful completion of a $16.8 million public offering, which was twice upsized and heavily oversubscribed. As a result of this capital raise, COIN is now funded into 2024, which is well beyond a number of key inflection points for the company. During the quarter, we continue to make significant progress towards our goal of delivering a safe and effective treatment for Nettleton syndrome, a rare and devastating genetic disease for which there is currently no approved treatment or cure. Significantly, during this past quarter, we initiated a clinical trial under an open IMD to evaluate our lead product, QRX003, in Nesodent patients. As discussed previously, this trial is a randomized, double-blinded vehicle control study. It will assess two different doses of QRX003 topical lotion versus the placebo lotion in 18 Nethicin patients. The test materials will be applied once daily over a 12-week period to predesignated areas of the patient's body, and as agreed with the FDA, a number of different clinical endpoints will be evaluated. This study will serve as the first cohort of a pivotal study for US and EU approval. As previously noted, the FDA has indicated that a total of approximately 20 medicine patients tested with QRF003 at the commercial dose may be sufficient for regulatory approval in the US. Based on the positive and constructive feedback we previously received from the EMAEA, we believe a similar number will also enable us to obtain regulatory approval for QRX003 in Europe. I am pleased to inform you that a majority of clinical sites are now fully open with the remaining sites on target to open by year end. In support of the study, this quarter we launched a dedicated website www.Nestatinsyndromeclinicaltrials.com, which provides details of the study design, the location of the clinical site, and a survey link for patients interested in participating in the study. We are also working closely with the First Skins Foundation and our CRO Therapeutics, Inc. to maximize awareness of the study in the Nestatins community and aid in patient recruitment which is now actively underway. Interest in the study remains very high among the Netterson community, and in fact, just yesterday, a patient traveled almost the full length of the country to get to our Boston clinical site, where he will be screened today for participation in the study. We are seeing similar levels of willingness to travel great distances to participate in the study from across the country, and also internationally as we frequently receive requests from overseas patients who are extremely eager to be recruited into this important study. During the quarter, we also announced plans to initiate a second clinical trial to evaluate QRX003 in Nettleton patients who are currently receiving off-label systemic therapy. This trial will also be conducted under COIN's open IND application and will run concurrently with our ongoing clinical trial. The clinical protocol has already been submitted to the FDA and pending no comments from the agency, we will initiate patient recruitment next month. With no approved treatments for Nathanson syndrome, we are increasingly aware that some patients are being treated with investigative systemic therapies including biologics in an effort to provide any level of relief to some, but by no means all, of the symptoms of this disease. To maintain the integrity of our currently ongoing clinical studies, patients must completely wash out of any systemic therapy in order to be eligible to participate. For many patients, this is a very difficult decision. Discontinuing a therapy that is providing even modest relief would result in the return of all of their symptoms just to enroll in a clinical trial where there is a one in three chance that they'll receive a placebo. We fully understand how challenging a decision that must be, so in order to accommodate those patients, we have announced our plans to run this second study. This will be an open-label study in approximately 10 Netterton patients who are currently receiving and will continue to receive off-label systemic therapy throughout the duration of the study. The trial will not be placebo-controlled, and all patients will have a 4% dose of QRS003, which is the highest dose, applied once daily to predesignated sites on the body every day over a 12-week period. As I just mentioned, we anticipate that this study will run concurrently with our ongoing study and we'll use the same clinical sites and the same investigators. By availing of the infrastructure that we have already put in place for our current trial, we will be in a position to maximize the efficiency of this new study whilst minimizing incremental costs to the company. Fundamentally, we believe that assessing the safety and efficacy of QRX003 as adjuvant treatment with systemic therapy could potentially yield valuable clinical data and possibly result in more treatment opportunities for patients and physicians. I would now also like to take a moment and mention that as we continue to deepen our engagement with the Nessington community of patients, family members, treating physicians, and supporting foundations, we find ourselves more and more in awe of the absolute strength and resilience that we see on a daily base from this patient population. We are constantly humbled by the immense courage of this community, something which only serves to increase our determination to provide a safe and effective treatment for this absolutely devastating disease. Turning now to our research projects at Queensland University of Technology, or QUT, we continue to make great progress and are hopeful that one or perhaps both programs will initiate clinical testing next year. While still at a relatively early stage of development, we view these products as important components of our rare disease portfolio. We are very pleased with the strength of this partnership and continue to be impressed with the quality and depth of the science being performed by the QUT researchers. The initial clinical testing will be performed in Australia, where COIN will be able to take advantage of the very generous incentives offered by the Australian government, including but not limited to a rebate of 43.5% of all research dollars spent, rendering these highly cost-effective programs for the company. And finally, during the quarter, we continued to expand our list of international distribution partners for QRX003. On July 15th, we announced that we entered into an exclusive license distribution and supply agreement for the Canadian market with Endo Ventures Limited, a subsidiary of Endo International PLC. Endo's affiliate, Paladin Labs, will be responsible for the commercialization of QRX003 in Canada once approved. This latest agreement marks our eighth such partnership for QRX003 that now covers 60 countries, including Australia, New Zealand, China, Hong Kong, Taiwan, the Middle East, Central and Eastern Europe, Turkey, and parts of Latin America. We continue to work closely with these partners to advance the development of QRX003 in their respective territories as they pursue the entry of the product into early access and compassionate use programs in their local markets. With that update on our operational progress, let me turn it over to our CFO, Gordon Dunn, to discuss the third quarter financial results.
spk00: Gordon Dunn Thank you, Michael. As Michael outlined, in August we successfully completed a $16.8 million public offering, which resulted in net proceeds of $14.9 million after costs. As of September 30, we had $15.2 million in cash and marketable securities, as compared to $2.7 million in cash as of June 30. As Michael also mentioned, we expect our current cash and investments to be sufficient to fund the company's operations into 2024. We reported research and development expenses of $750,000 for the third quarter, which is primarily attributable to expenses related to our clinical trial and associated manufacturing costs, as well as our research projects with QUT. General administrative expenses were $1.6 million for the quarter. We recorded an operating loss of $2.3 million and a net loss of $3 million for the quarter. I'll now turn back to Michael to make some closing remarks and begin our Q&A. Michael.
spk02: Thanks, Gordon. In closing, we are extremely pleased with COIN's progress over our first 12 months as a publicly traded company. Our clinical trial evaluating our lead product candidate, QRX03, for Nettleton Syndrome has been initiated under an open IND, and we look forward to updating everybody on the study's progress. Underscoring COIN's leadership position in the Nettleton Syndrome space we're excited to announce our plans to initiate a second clinical trial that will enable patients who are not eligible for our current study to participate. Also, we increased the number of our international licensing and distribution partnerships to eight during the quarter with the signing of our latest deal for Canada. This now brings the total number of countries covered under these partnerships to 60, and we continue to work closely with each of these partners. Operator, we are now ready for questions.
spk06: Thank you. At this time, we will begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble the roster. And the first question comes from from .
spk03: Good morning, everyone. Good morning, Michael, Gordon. Thank you very much for the presentation and walking us through the achievements in the last quarter. So, I have several questions. Michael, could you walk us through the inflection points in 2023, the ones that you described in the sense that I know you mentioned that you have funding until 2024, I want to understand how would you describe those inflection points in 2023?
spk02: Thanks, Aidan. Good morning. Appreciate the question. So, two key inflection points will be from the Nethicim clinical trials. The first study we anticipate will read out first half of next year, and the second study should probably read out right around the same time. So you're going to have two very important inflection points here. These will be the first clinical data from formal clinical studies for this disease. So those are two very important inflection points, Aidan, for the company.
spk03: Yeah, this is helpful, yes. Obviously, you know, trial readouts are huge inflection points. Regarding the recruitment for these two trials, I know you got the website with Netherson syndrome and you got a survey asking patients about the disease and how they're being treated. Could you share information how many patients actually uploaded their data, how many requests you received so far, and overall just share with us your perspectives about the recruitment in both trials so far.
spk02: Yes, so we have not released any numbers yet regarding number of patients that have been screened or any patients that have been fully enrolled in the study. We intend to do so. But what I will tell you is for this first study, we are taking a very systematic approach here to it. So, patients first go through the survey, then there's phone calls, then they come to the site where they're screened. They have to get the genetic testing done because we want to be sure that every patient who's enrolled in the study actually has Nettleton syndrome and not some other related disease because misdiagnosis, as you know, can be a problem here. So what you see is kind of this systematic process to get patients into the study, and then you have got this kind of hockey stick effect where once that time lag has elapsed, then the patient recruitment starts to come very, very quickly. So there's an initial lag as we go through the work, but then it starts to move very, very quickly. And while on this call I'm not giving any numbers, I will tell you that I am extremely pleased with the rate of recruitment and, again, as we mentioned, the overall interest level. Look, we have a patient from Canada who is driving to Indiana on a regular basis to participate in the study. You know, I've been doing this for 35 years, and we used to have to chase patients to get them into studies. We're not seeing anything like this. So I feel really good about where we are. And is this adult patients, adult patient striving? All patients currently are adults. The FDA prefer that you start with adults before you move to children. So these two studies are adults only and then the next cohort of the study will be adults and children and probably primarily children. And the good news is that most of the children today have the genetic testing already done. You know, it also wasn't that available back in the day, but now it is. So children will not have to go through that process, and we feel like that will be a faster entry rate into the study.
spk03: Okay, understood. And would you envision at all that you would file an NDA for combination setting, not the combination like on top of biologic, not as a single agent. Would you envision that scenario at all?
spk02: You know, it's a really good question. It's something we're thinking about. It's something we're talking about. We're discussing it with the appropriate experts. I'm not going to rule it out. I'm not going to say we're going to do it. But at this point, it's a little bit TBD. to be frontline therapy for all Nesitin patients. This study, the second study, should hopefully show that it's safe and effective to be used in combination with a biologic. So bear in mind that these biologics are not approved to treat Nesitin anyway. So it's, you know, there would be a whole process there that we'd have to undertake. So I'm going to answer it as a maybe. and we'll have further discussion about it.
spk03: Got it, got it. And for publications for 003, do you, can you give us any timelines whether you're planning to publicize any of the findings or any sort of reasons why you believe 003 would be good for NF treatment, any maybe clinical data, anything that would be relevant for us to sort of, you know, establish a proper probability of success for the drug?
spk02: Absolutely. So we will embark on a publication strategy once clinical data reads out. So we're not going to get ahead of ourselves here. And look, there's obviously competitive reasons as well that we want to keep a lot of this under wraps. We're continuing to explore new intellectual property opportunities. But once we have data, we will certainly publish that data and make it freely available.
spk03: And the last question I have regarding financials. So you have $15 million almost in cash, and then you have short-term and long-term liability due to officers. It's all about $4.2 million or something. Could you explain to us what that is?
spk00: Yeah. Well, first of all, the cash is about $15.2 million when you look at cash and marketable securities, which are T-bills. In terms of the liability to officers, the founders of the company, Michael and Denise, essentially were working without any pay and incurring expenses for years before the company finally got funded for some pre-merger and then at the merger. So we agreed with the investors at the time that those liabilities would be repaid over time, and that's what we're doing at a rate of $50,000 per month to the two officers.
spk03: Okay. Thank you very much. We're taking more questions.
spk06: Thank you. And the next question comes from Jason Butler with JMP Securities.
spk01: Hey, it's Ryan for Jason. Thanks for taking our questions. Just a couple quick ones for me. For the patients that are on the off-label systemic therapy, what proportion of the patient population do you think that subgroup represents? And it sounds like you believe those patients are getting minimal benefit from the systemic therapy, if you're hoping to see a signal from 003 over that.
spk02: Yeah, so it's hard to, first of all, Roy, thanks for the question. It's hard to quantify the percentage because, first of all, it's not being reimbursed. It's money coming out of their pockets and these biologics, as you know, are very expensive. That's a limiting factor. For many of them, they don't see any benefit whatsoever, so they come off them. There's probably, I'm guesstimating here, less than 10% of patients who are on these biologics. Now, everybody's on something, right? Because they're willing to try anything, steroids, just really anything at all to provide even minor relief. So what we do know is for patients who get some relief from the biologics, it helps with the pruritus because they suffer from extremely terrible itch. So that's really the only effect that they see, and maybe a little bit with the inflammation as well. But I would put it at maybe 10%.
spk01: Okay, great. And do you plan to have the two trials read out at the same time, or do you think the ongoing trial can read out first? And then are we going to see all the doses at the same time, or are you going to give us data from one dose before another? Thanks.
spk02: No, see, I suspect that they'll probably read out around the same time. I mean, curiously enough, the second trial with smaller number of patients may actually read out a little bit faster. But I'm anticipating around the same time, and we'll provide data from all the doses. So all the data will be released at the same time.
spk06: Got it.
spk02: Thank you. Thanks, Roy.
spk06: Thank you. And the next question comes from Jim Malloy with Alliance Global Partners.
spk04: Hey, Mike. Thanks for taking my question. On the two Phase 3s that are running, I apologize if I've misheard, is it now the second half, 23, you anticipate getting top line on these, or does it still remain to be seen, depending on how the hockey stick on traction picks up for enrollment?
spk02: Yeah, so we're still tracking towards mid-23s. Jim, if that changes, we'll alert, but so far that seems to be the pace that we're on.
spk04: Excellent. And then on the second phase three, you mentioned 10% on biologics, but as you said, everyone's getting something. So the second phase three includes folks on steroids or really anything, but including the 10% potential on biologics? Yes.
spk02: So just to be clear, Jim, the second study is not a phase three. This is more of an investigational study. You know, as I said, there's no placebo control. So patients who are on both systemic and topical therapy. So if you're on topical therapy, you just have to wash off the topical therapy for the sites where the product will be applied. the rest of your body you can continue to use the topical steroids. So, but the main thing here is that for patients who are on systemic therapy, they stay on that systemic therapy throughout the course of the 12 weeks. And, you know, we see is there any incremental benefit and hopefully no safety signals, which we don't anticipate that anyway.
spk04: Understood. Understood. Then maybe move it over to 004 for RDAB. Abiona recently had some positive data out. Crystal is looking for a PDUFA in February in Amrit. I guess they got dinged by the FDA. How does sort of the movements over in the RDAB space changed or not changed your expectations for an IND for 004 in RDAB?
spk02: So, really good question. And first of all, as you know, Abiona, produced positive data in the past couple of weeks, and we'd like to take the opportunity to congratulate them on that because, clearly, this is a patient population that's in dire need of an effective treatment. As you said, you know, AMRIT had a setback with the FDA, and we're still expecting to get a yes or no in terms of approval. I think by the end of February of next year. Look, there's no one-size-fits-all opportunity here. Some of these other products can't be used on all patients because it's just not technically feasible. Some of these other products have manufacturing challenges that may make things a little complicated for them. Our product is very patient-friendly, easy to use, topical lotion. say by the middle of next year, we'll be in a position to make a go-no-go decision. As we've said before, if we think there's a commercial opportunity for us, we will be in a position to move very quickly. We had very positive feedback to our pre-IND submission. The clinical protocol is written. The product can be manufactured very quickly. So if we make the decision to move then we will do so quite quickly. But we will not chase something that's not there. And, you know, there's still more shoes to fall or more balls to drop next year. And as we see what happens, then we will make a decision. But I would guide you towards the middle of next year as a reasonable timeline for us to give a go-no-go decision.
spk04: Excellent. Thank you for taking the questions.
spk02: Thanks, Jim.
spk06: Thank you. And once again, please press star and then one if you would like to ask a question. And we do have a question from Naz Rahman with Maxim Group.
spk05: Hey, guys. Thanks for taking my question. Just a quick question. The patients that are on the biologics, do you know which biologics they're on? Are these like anti-TNF inhibitors? Are they interleukin inhibitors, or what are they taking?
spk02: It's primarily to NAS, Dupixent, and TALS. Those are by far the ones that are being used most frequently.
spk05: Got it. And like for statistical purposes, how do you plan on addressing the fact that there's so many patients that are like on concomitant therapies, equal systemic therapies?
spk02: Yeah, so that's why for the first study that we're running, they have to wash completely out of that. So nobody in the first study will be on any systemic therapy whatsoever. They can use topical therapy, but they have to wash off it for the sites where our products will be applied. For the second study, obviously then patients can be on systemic therapy and they They stay honest for the duration of the study. But the first study, the eligibility requirements are extremely rigorous, and patients have to wash out over a 12-week period to make sure there is no systemic therapy left in their system whatsoever.
spk01: Got it. Thank you.
spk06: Thank you. And this concludes the question-and-answer session. I will return the call to Dr. Michael Myers for any closing comments.
spk02: Thank you very much. I would just like to conclude by thanking everybody for their participation here today and their ongoing interest and support in COIN. Please feel free to reach out to us with any questions or comments, either by email or by phone. We're always available. So thank you and good morning.
spk06: Thank you. The conference has now concluded. Thank you for attending today's presentation from the United
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