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spk06: Good morning and welcome to TRI-SALIS Life Sciences Third Quarter 2023 Earnings Conference Call. At this time, all participants are on listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, the call is being recorded for replay purposes. I would now like to turn the call over to your host, Jim Young, Senior Vice President of Invest Relations and Treasurer at TRI-SALIS for a few introductory comments.
spk01: Thank you all for participating in today's call. Joining me today from TRI-SALIS Life Sciences are Mary Zella, President and Chief Executive Officer, Sean Murphy, Chief Financial Officer, and Dr. Steven Katz, Chief Medical Officer. Earlier this morning, TRI-SALIS released financial results for the quarter ended September 30th, 2023. A copy of the press release is available on TRI-SALIS's website. Before we begin, I would like to remind you that management will make statements during this call that includes forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Reform Act of 1995. Any statements contained in this call, other than statements of historical fact, are forward-looking statements. All forward-looking statements, including without limitation, statements relating to our sales and operating trends, business and hiring prospects, financial and revenue expectations, reimbursement proposals and future product development and approvals are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of macroeconomic conditions and global events that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our Form 10Q on file with the SEC and available on EDGAR and in our other reports filed periodically with the SEC. Tricelis disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 14th, 2023. And with that, I'll turn the call over to Mary.
spk05: Good morning, everyone. And thank you for joining us today to review Tricelis Law Sciences third quarter results for 2023. This marks our first quarterly earnings call as a publicly traded company. And we're excited to report on our progress towards our mission to extend and improve the lives of people living with liver and pancreatic tumors. We greatly appreciate your presence today on the call. Tricelis was founded in 2018 to address the two main barriers that inhibit treatment success in liver and pancreatic tumors via the combination of our proprietary technology that can deliver high concentrations of a range of therapeutics to the site of disease with a novel immunotherapeutic focused on attacking the immunosuppression environment and enabling checkpoint inhibitor response. Intertumoral hypertension is a pervasive and underappreciated problem that causes collapse of vessels and tumors, limiting blood flow and therapeutic uptake. Our pressure enabled drug delivery, PEDD technology, has been shown to enable superior delivery of a broad range of therapeutics into tumors with improved accuracy, predictability, and at higher tissue levels in association with better clinical outcomes. PEDD allows enhanced delivery to increase therapeutic delivery to the tumor while decreasing exposure in normal tissue to minimize toxicity and enable treatment of patients with more advanced disease. Our TriNab infusion system, which was launched in 2020, leverages our PEDD technology to overcome the infusion barriers that limit therapeutic uptake in solid tumors, including pancreatic adenocarcinoma, hepatocelular carcinoma, and liver metastasis. TriNab has demonstrated the ability to deliver high concentrations of therapeutics into high pressure tumors while limiting exposure to normal tissue, avoiding off-target toxicity. We believe this is game-changing, -a-kind technology, and the adoption by interventional radiologists we have achieved today is a reflection of its patient impact and efficacy. Our TriNab business has grown at an annualized growth rate of approximately 50%, despite having lost at the same time at the start of the pandemic. And in the third quarter, we achieved our highest ever sales figure of 5.2 million. We're delighted to report that this business continues to demonstrate robust revenue and market share growth throughout the United States. Our strategic investments in physician education, clinical and sales personnel have allowed us to successfully educate the interventional radiology physician community and drive adoption. This business has single-digit market share and superior growth margins, which provides significant opportunity for future profitability. Following my remarks, Sean Murphy, our Chief Financial Officer, will provide a more in-depth analysis of our quarterly results and key operating metrics. In addition to our TriNab technology, in 2020, we acquired SD101, an investigational toll-like receptor 9 agonist. In clinical studies performed prior to the acquisition, SD101 demonstrated the ability to favorably reprogram the tumor microenvironment and promote responses to immunotherapy. Later in the call, Dr. Steven Capps, our Chief Medical Officer, will share recent encouraging data from our phase one PERIO1 trial for uveal melanoma with liver metastasis and our PERIO3 trial for pancreatic adenocarcinoma. These results further validate our company's proof of concept, the effectiveness of our pressure-enabled drug delivery in combination with SD101 in overcoming critical, mechanical, and biological barriers in the treatment of solid tumors. In summary, we're very encouraged by the remarkable progress our team has made in our commercial and clinical endeavors and are very excited about the future of TRISALIS. At this time, I'm proud to introduce Sean Murphy, our Chief Financial Officer, to discuss our operating results and key financial metrics.
spk02: Good morning, everyone, and thank you, Mary. I'm pleased to announce that TRISALIS achieved outstanding results in the third quarter that ended September 30th, 2023. Our revenue, solely driven by the success of the Trinab device, reached 5.2 million. This sales achievement represents the highest quarterly sales in the company's history, reflecting a 32% increase compared to the same period in 2023. TRISALIS has a growth record, as illustrated on slide one, which the company has grown at a compound annualized growth rate of approximately 50% since the launch of our product in 2020. This segment of the business is approaching break-even late in 2024. It is worth noting that the third quarter of 2022 was a particularly strong sales period, making this year's performance more remarkable. In terms of the -to-date revenues, as of September 30th, 2023, we have reached 12.8 million, a 39% increase from the prior year. These results can be attributed to several factors, including the adoption of Trinab in new accounts, increased utilization of existing accounts, and the continued expansion of our sales force, all of which has led to an increase in our market share. In the third quarter, we captured 15 new hospital accounts in the quarter and 44 accounts -to-date. Our account utilization reached 10 units per account, an increase of two units, or 25% increase over last year. Finally, we are increasing our sales team with the funding we received by going public. At the beginning of 2023, we started the year with 10 representatives, and by the end of the third quarter, we had reached 21. We expect to continue our sales force expansion during the balance of the year and into 2024. We are proud to report a robust gross margin profile of .7% in the third quarter of 2023, and .2% gross margin -to-date, compared to .1% in the third quarter, and .3% -to-date in 2022. This favorable margin profile in 2023 can be attributed to increased factory volumes, improved batch yields, and other operating efficiencies. We believe our facility in Westminster, Colorado has the capacity to support our growth over the next five years. In terms of our investment in research and development, expenses in the third quarter of 2023 totaled 9.4 million, an increase of 95% from the third quarter of 2022. -to-date R&D expenses amounted to 21.9 million, reflecting a 45% increase from the corresponding period in 2022. These investments are primarily related to the additional patient enrollments in our three perio clinical trials. Our dedication to growth is also evident in our sales and marketing expenses. In the third quarter of 2023, we invested a total of 4.7 million, a 55% increase from the third quarter of 2022. -to-date sales and marketing expenses reached 11.4 million, marking a 29% increase from 2022. These investments are closely tied to the ongoing Salesforce expansion. Moreover, general administrative expenses for the third quarter of 2023 totaled 9 million, representing a substantial increase of over 150% compared to the third quarter of 2022. -to-date general and administrative expenses amounted to slightly over 100% more than in 2022 at 17.5 million. These increased costs include one-time costs of 4.8 million in the third quarter and 7.7 million -to-date, related to the completion of our DSPAC process in August of 2023. Our operating losses for the third quarter of 2023 totaled 18.5 million compared to losses of 8.1 million in the third quarter of 2022. -to-date losses in 2023 amounted to 40 million compared to losses of 24.7 million in 2022. The increased losses in 2023 can be attributable to higher operating expenses in research and development, sales and marketing, and general and administrative expenses, as mentioned earlier. These increased expenses were partially offset by the increased gross margin, resulting from increased tri-NAB revenues and improved gross margin profile. We believe that operating earnings provide the most accurate insight into our ongoing profitability. This figure closely aligns with EBITDA and excludes non-cash valuation adjustments related to equity issuance, fair value adjustments of the tranche and warrant liabilities, and the fair value adjustments of contingent earn-out liabilities. It is important to note that these non-cash valuation adjustments may continue to produce material fluctuations in our net earns, resulting during the next several years. In terms of net loss attributable to common stockholders, we reported a loss of 1.7 million in the third quarter of 2023, and 27 million -to-date compared to a loss of 8.1 million in the third quarter of 2022, and 24.6 million -to-date. These results are significantly influenced by non-cash gains and losses on the valuation of contingent earn-out liabilities, tranche and warrant liabilities, and equity issuance. In conclusion, we remain dedicated to our mission and excited about our future. With this, I will pass the call to Dr. Steven Katz, our Chief Medical Officer, who will provide further highlights about our perioclinical programs. Good morning,
spk03: everybody, and thank you, Sean. We appreciate your interest in learning more about the progress our company is making on behalf of patients with liver and pancreas cancer. While immunotherapy has unquestionably yielded transformative results in several solid tumor indications, patients continue to confront unmet medical needs with primary liver cancer, liver metastasis, and pancreatic adenocarcinoma. As Mary noted earlier, our Trisallis approach harnesses the power of PEDD to overcome mechanical tumor microenvironment barriers. We combine our PEDD technology with SD101, a carefully selected drug capable of addressing the biologic and immunosuppression-related challenges in these organs. Importantly, we believe the mechanical and biologic barriers that our trials seek to address are prevalent across multiple cancer types. SD101 broadly stimulates the immune system and acts to eliminate a specific cell type known to be significant in hindering the success of immunotherapy in the liver and pancreas, the MDSC, or myeloid-derived suppressor cell. Preclinically, we confirmed that SD101 has favorable properties relative to other classes of TLR9 agonists in targeting MDSC. Historically, delivery and optimal dosing have posed challenges for this class of drug, but our clinical trials have been designed to address these challenges. In 2021, we launched a series of PERIO, or pressure-enabled regional immunoelectology trials, starting with our PERIO1 trial involved in patients with uvulomelanoma liver metastasis. We believe this data highlights how PEDD has the potential to enable SD101 across multiple indications. Dr. Sathin Patel from the MD Anderson Cancer Center presented the data at the recent Society of Immunotherapy for Cancer meeting in San Diego. Key highlights from the presentation include data encompassing 56 patients across various dose levels and cohorts in this phase one study, which was a dose escalation study. Patients were treated with SD101, delivered by the innovative Trinab device, targeting the arteries feeding the liver and the liver metastasis. After establishing safety with single agent SD101, patients were then enrolled in treatment in combination with intravenous checkpoint inhibitors. The enrolled patients had significant prior treatment, with 71% having received previous therapies, including 16% treated with Chemtrak. Safety data reported at City indicates that the SD101 infusions with PEDD, with or without intravenous checkpoint inhibition, were well tolerated. There were no serious grade three or four treatment related adverse events in the single agent SD101 cohort, and 4% with SD101 in combination with Nivolumab. These rates aligned with or even lower than expected in the absence of checkpoint inhibition. The safety profile may be attributed to the pharmacokinetic data associated with utilization of PEDD, which demonstrated high levels of SD101 in the liver with limited systemic exposure as measured in the serum. Immunologically, Dr. Patel detailed the elimination of immunosuppressive MDFC and regulatory T cells through examination of liver metastasis biopsy specimens. There was also evidence of T cell activation within the liver and systemically. Early efficacy data at the optimal dose of two milligrams of SD101 in combination with intravenous Nivolumab revealed promising results. These included a median progression-free survival of 11.7 months, a one-year overall survival rate of 86%, a disease control rate of 81%, and a CT DNA clearance rate of 57%. The optimal dose in these seven patients was determined based upon the efficacy data in addition to multiple immune signals. Across all valuable patients, 86% demonstrated a reduction in circulating tumor DNA. In addition to PERIO1, Dr. Michael Lee, also from the MD Anderson Cancer Center, presented safety and feasibility data from our PERIO3 study at the CT meeting. The PERIO3 phase one study is enrolling patients with treatment refractory, locally advanced pancreatic adenocarcinoma.
spk00: They are
spk03: receiving single-agent SD101 with our groundbreaking Tricallis infusion system which utilizes a retrograde venous approach to circumvent anatomical constraints on the arterial side. There have been no serious grade three or four treatment-related adverse events in the three subjects treated at the lowest dose level. Immunologic data from pancreas tumor biopsy specimens indicates effects consistent with those observed in the PERIO1 study liver metastasis specimens, suggesting effective SD101 delivery into the pancreas and consistency in TLR9 biology in both organs. In summary, we are encouraged by the phase one uveal melanoma liver metastasis data and are optimistic that these findings will pave the way for success in other indications we are investigating. Additionally, we are excited about the early experience in a locally advanced pancreatic adenocarcinoma clinical trial which holds promise due to the innovative delivery technology being employed. We eagerly anticipate further follow-up and enrollment in the PERIO studies. And now I'll pass the floor back to Mary for closing remarks.
spk05: Thank you, Dr. Kass and a warm welcome to all of you participating in the call today. At TRISALIS, we're delighted to share our achievements during the quarter. And we've made meaningful progress in expanding our trinib business and continue to advance our PERIO clinical programs, both of which are shaping an exciting future for our company. With that, I'll open the floor for any questions you may have. Your insights and questions are valuable to us.
spk06: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. One moment for our first question.
spk07: And our first question comes from Jason McCarthy
spk06: of Maxim Group.
spk04: Hi, guys. Chat on for Jason. So what would be a meaningful response in liver tumors and any extension in overall survival and quality of life? And what do you think you need to see to advance to a later stage program?
spk01: Hi, Chad. This is Jim Young. It's nice to hear from you. And I'm gonna pass that answer over to Mary.
spk07: Thank
spk01: you.
spk07: Actually, I think
spk05: it's probably a better question for Stephen to respond to. Stephen, you wanna jump in?
spk03: Yeah, happy to do so, Mary. This, of course, will vary by indication but taking uveal melanoma liver metastasis as an example, I think first and foremost, you know, we're very interested in the safety profile that we're seeing in the early period data. I think that as a backdrop is gonna be critical to moving any program forward. And then beyond that, in terms of efficacy signals, we believe that circulating tumor DNA provides a very useful early readout of biologic activity. And then beyond that, as a regulatory endpoint, we're optimistic about using progression-free survival as a measurement of disease control. And then, of course, overall survival as a longer-term measurement of outcome.
spk08: Okay, great.
spk04: And so, you know, given the unmet need in uveal melanoma, and this is the first proof of concept study for the COMBO, is it possible a single arm open label phase two may be sufficient for registration?
spk03: You know, we believe that ultimately for full approval, a two-arm study will be required. There is precedent with the agency for openness using a single-arm study for an accelerated approval, but we believe that a two-arm study would ultimately be needed for a full approval.
spk08: Got it.
spk04: And then in pancreatic cancer, the data in phase one of CITC does, very encouraging, albeit early. What would be a meaningful outcome in that study to move to a phase two?
spk03: Yeah, similar to the intra-hepatic programs like uveal, we believe that progression-free survival would be a very meaningful clinical endpoint to provide a signal for moving forward into a phase two. One of the things that we've learned from the data, particularly that data set presented at CITC, is that conventional response assessment criteria like RISIS 1.1 may not capture the full biologic activity of immunotherapy in these organs. And so looking at progression-free survival, which captures both responses and durable disease control, provides, we think, a very comprehensive assessment of meaningful biologic and clinical activity. So we're looking toward a progression-free survival in excess of seven to eight months as something that would be very meaningful in that disease.
spk08: Got it. And then I guess,
spk04: lastly, in liver cancer, since you're using SD101 in combination with a checkpoint, what is the impact of Ticentric and Avast in moving to first line in liver cancer? The potential use of docs not wanting to move a patient that may progress to another checkpoint, does SD101 sort of change that narrative?
spk03: We hope so. We hope it has the potential to do that. For HCC, right now, we're focused on second line and beyond. So the addition of Ticentric and Avast in the first line doesn't necessarily directly impact what we're doing in that regard. And based on the immunologic data reported at CITC, we believe that SD101 has the potential to address the immunologic impact and biologic reasons for checkpoint failure. So we're hopeful that medical oncologists will see the data and agree that the rationale for using SD101 in immunotherapy or checkpoint failure patients is there. And we hope to generate additional data to
spk08: support this. Great. Congrats on the progress, and thanks for taking the questions. Thank you.
spk07: Thank
spk06: you. One moment for our
spk07: next question. And our next question comes
spk06: from Justin Zaylen of BTIG.
spk09: Thanks for taking the question, and congrats on the progress here. I'd like to ask Dr. Katz, congrats on the problems in cardio data here at CITC. Just wanted to hear your view on how you see this fitting in the landscape in the treatment of metastatic uveal melanoma.
spk08: Thanks for the question, Justin.
spk03: You know, right now, as we all know, we have one approved agent for uveal melanoma stage four patients, chemtrak, which is limited by HLA type. So, you know, there's certainly an unmet medical need for patients that don't express that HLA haplotype. So there's potential application there. And in addition to that, for patients who progress following receiving chemtrak, there's need for second line and beyond treatment. We believe that the safety profile that was presented at CITC, where the serious treatment related adverse event rate, grade three and four, for SD101 with the volume of 4%, really places it very well in the therapeutic landscape for uveal melanoma liver metastasis. And if we see the disease control rate and the progression free survival and overall survival continue to play out as reported for those initial patients at the optimal dose, we think it could offer a very compelling therapeutic opportunity for those patients.
spk09: Excellent. And maybe just some of your thoughts on how this data might provide some read through to other potential cell tumor indications in other organs.
spk03: Thanks. That's a great question and something that we think very deeply about. We're hopeful that because we are targeting the same protein, tolipoceptin 9 or TLR9 across all indications, which is present across all indications, we're hopeful that we will in fact see the same immunologic signals and similar clinical readouts in different liver metastasis and primary liver tumor indications. In addition to the pancreas, the early data that we presented at CITC from the PERIOS 3 locally advanced pancreatic adenocarcinoma trial indicates that the immune signals that we are seeing in the pancreas and the liver are actually consistent with one another. And so that early data set gives us hope that we'll continue to see resonance across multiple indications and disease types.
spk09: Great, thanks for taking my questions.
spk06: Thank you. I'm showing no further questions at this time. I would like to turn it back to Mary Zalla for closing remarks.
spk05: Thank you everyone for taking time to listen to our inaugural earnings call at Triceratops Life Sciences. We sincerely appreciate your interest and I hope it was evident to all of you our excitement about the progress at the company. Thank you for joining us today.
spk06: This concludes today's conference call. Thank you for participating and you may now disconnect.
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