This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Good morning, and welcome to the Varios Therapeutics, Inc. Second Quarter 2022 Financial Results Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. Please be advised that today's call is being recorded at the company's request. At this time, I'd like to turn the call over to Angela Walsh, Senior Vice President of Finance and Treasurer for Varios Therapeutics. Please proceed, Angela.
spk00: Thank you. Good morning, everyone. and thank you for joining us on today's conference call. We are pleased to be with you today to discuss Vireo Therapeutics' second quarter 2022 financial results, as well as to provide you with an update on the operational progress we have made during the past six months. Please note that our financial results press release is now available on our website. We'll start today's call with our CEO, Greg Duncan, providing you with a brief update on our corporate progress during the past quarter, and then I will return to review our second quarter financial results. In addition, Ralph Groswald, our Senior Vice President of Operations, is with us for the question and answer portion 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 meaning of the Private Securities Litigation Reform Act of 1995, which involved 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 statement section in our financial results release issued this morning for more information. It is now my pleasure to turn the call over to our CEO, Greg Duncan.
spk04: Thank you very much, Angela, and good morning, everyone. The team and I are exceptionally excited to provide you with an update on the substantial operational progress Rios Therapeutics Incorporated has made over the past few months. First and foremost, I'm exceptionally pleased to report that under the expert leadership of our Chief Medical Officer, Dr. Mike Gendron, in July 2022, just one month ago, our final patients completed their 16 weeks of treatment in our landmark 425-patient Phase IIb Fibromyalgia Clinical Study. This study is also known as the Fortress Study. Now that all patients have completed their participation in this study, our clinical team and our vendors are working hard to enter final data into the electronic data system to resolve any outstanding queries and to begin the cleaning process leading to database lock next month. Once the database is locked, the data will be transferred to our statistical vendor along with the unblinding codes to allow the production of the unblinded Phase IIb top-line results. We are really excited to maintain our projections to report Phase IIb fibromyalgia results next month. You'll likely recall the primary endpoint for this study will focus on the therapeutic effectiveness of our lead development candidate, IMC1, which as I'm sure you know is a fixed-dose combination of femciclovir and celecoxib to reduce systemic fibromyalgia-related pain. IMC-1 pain reduction effectiveness will be measured using the very same endpoint that was used in our previously successful Phase IIa fibromyalgia study. This pain endpoint was also used to assess the effectiveness of the three drugs for the treatment of fibromyalgia the Food and Drug Administration has approved here in the U.S. We will also assess IMC1's effects on a host of other key secondary outcomes measures related to both quality of care as well as safety. In parallel to our fortress phase 2b study, our chronic toxicology studies in two species have now completed under the direction of our Senior Vice President of Operations, Ralph Groswold. The results of these studies will be required by regulatory authorities before we are permitted to dose study participants with IMC1 for intervals of one year or more which we plan to do in our Phase III clinical study program. Results from these chronic toxicology studies are an important element of the package we intend to submit to FDA to facilitate our future Phase III program discussions. As a complement to our ongoing fibromyalgia Phase IIb research program, we recently announced that we would be progressing a second development program featuring a combination of valciclovir and celecoxib into clinical development. This exciting new exploratory trial will assess the potential of this antiviral combination to reduce fatigue and other symptoms associated with long COVID sequelae. This program is being supported through an unrestricted investigational grant to the Bateman Horn Center, a nonprofit interdisciplinary center of excellence advancing the diagnosis and treatment of chronic fatigue disorders, fibromyalgia, post-viral syndromes, and related comorbidities. We project enrollment of patients for the balance of 2022 in this program with results from the program presently projected for the first half of 2023. For context, long COVID can be very debilitating. It has been estimated to affect approximately 20% of patients who were previously infected with the COVID virus. This prevalence rate translates into well over 100 million long COVID patients on a global basis. Further research will help determine how many patients infected with new variants of COVID will progress to develop long COVID sequelae. And finally, we want to convey that our current cash position is expected to provide the company with operational runway through the end of 2022. With that brief update on our operational progress, let me turn it over to our Senior Vice President, Angela Walsh, to discuss our Q2 financials.
spk00: Angela? Thank you, Greg. As of June 30, 2022, we had $7.7 million in cash as compared to $14 million as of December 31, 2021. As Greg just mentioned, we expect our current cash to be sufficient to fund the company's operations through the end of 2022. With respect to our income statement, as a development stage biotechnology company, we did not generate revenue during the three months ended June 30th, 2022 or during the three months ended June 30th, 2021. We reported research and development expenses of $2.4 million for the second quarter ended June 30th, 2022 as compared to $3.2 million for the year-ago quarter. The decrease in research and development expenses quarter over quarter was primarily due to a decrease in clinical trial expenses for our fortress study of 0.1 million dollars, a decrease in expenses related to our chronic toxicology program of 0.6 million dollars, and a decrease in drug development and manufacturing costs of 0.1 million dollars. We reported general and administrative expenses of 1.3 million dollars for the second quarter of 2022, as compared to $1.1 million for the year-ago quarter. The increase quarter over quarter was primarily related to an increase in accounting and legal fees of $0.1 million and an increase in salaries and related costs of $0.1 million. And finally, we reported a net loss of $3.7 million for the second quarter of 2022 as compared to a net loss of $4.3 million for the year-ago quarter. The lower net loss was primarily due to the lower research and development cost I just mentioned. I'll now turn the call back over to Greg to moderate the question and answer portion of today's call. Greg?
spk04: Thank you once again, Angela. In closing, we believe the role of activated herpes virus as a potential catalyst in triggering diseases like fibromyalgia, fatigue-related disorders, and chronic GI disorders represents an exciting new innovation paradigm. Various combination antiviral development programs are supported by both mechanistic and clinical data. The novelty of our approach is further illustrated by the fast track designation granted by the FDA to IMC1 for the treatment of fibromyalgia, which, to the best of our knowledge, represents the first time a new drug candidate has been granted this important designation. If the forthcoming IMC1 fibromyalgia Phase IIb fortress data anticipated next month are consistent with the data that emerged from our successful Phase IIa study, we believe our novel antiviral combination, IMC1, could be a game changer for the millions of patients in the fibromyalgia community. I hope you'll agree that it's shaping up to be an exciting year at Vireo Therapeutics, possibly our most exciting to date. As always, we remain committed to frequent and proactive outreach to the investment community as well as the medical community as we progress our journey to improve the treatment standards for hundreds of millions of fibromyalgia patients across the globe. Operator, we are now ready for questions.
spk01: Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset, if you're listening on speakerphone, to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Please hold lollipop for questions. Your first question is coming from David Batz from Zach's Small Cap Research. Your line is live.
spk02: Hey, good morning, everyone. So, Greg, assuming positive results in the FORTIS trial, aside from meeting with the FDA, obviously, to discuss what the Phase III program is going to look like, what other things need to occur, such as maybe CMC issues, drug supply, those types of things?
spk04: Good morning, David, and thank you for joining us for today's call. As you correctly mentioned, job one will be to organize submission to FDA information to catalyze forward discussions about exactly what's required for the phase three program. In the meantime, under Ralph Groswald's expert direction, we have already commenced work on CMC preparation to supply drug for what we anticipate to be one or two phase three studies, depending on where we land with the FDA, so that those activities have actually started from a process perspective. We will then commence manufacturer, if you will, of supply for those studies shortly thereafter. We're obviously waiting for the data, the Phase 2b data, which we expect to read out next month. And we will then also contemplate the talent we need to hire to bring it to the organization to run what will likely be a larger program than the program we just ran. So we'll need extra capabilities, if you will, from a research perspective, from an operational perspective, as we transit over to phase three. So those would be the short-term priorities, in addition to raising additional capital to run the phase three, which I don't think is a secret to anybody. We've made that pretty clear through the course of our journey. We will also need to capital scale to fund the phase three program. Does that answer your question?
spk02: Yes, thank you. And turning to the long COVID trial, I'm just curious, what kind of input did Vireos have in kind of setting up that trial and or if there wasn't necessarily input there, what are you hearing back about how that trial is being run?
spk04: So the Long COVID program is an exciting opportunity. This is an exploratory program assessing patients that will be treated with a different antiviral combination, valciclovir and celecoxib, so a little bit different than IMC1. The program is funded by as we referenced historically, through an unrestricted investigational grant to the Bateman Horne Center. Ultimately, it is their program to run. They have been cooperative with us and sought our input relative to the different outcomes measures we would assess. So things like pain, fatigue, mental health complications will all be assessed as part of that program. We expect the Bateman Horne Center to begin dosing this quarter. Stay tuned. We will announce as soon as that happens. So that program, based on current projections, should enroll through the balance of this year, and we would expect data from the program to read out sometime in the first half, hopefully quarter one, but certainly possible since we don't control the pace of the recruitment here, could be quarter two of next year. And hopefully with good news there, that could catalyze a second very important program, one that could be, frankly, as large as the existing fibromyalgia programs. As you're probably well aware, David, there's a great study out of the UK that estimates about 20% of people who have COVID go on to develop long COVID symptoms. A University of Michigan study estimated there's probably about 100 million patients worldwide, if you believe their epidemiologic data. And that is a number that certainly is larger, in fact, than the current fibromyalgia community. So if there's good news there, we would rapidly progress into a more formal program. And those data, as I mentioned, are projected to be sometime first half of next year.
spk02: All right, great. Sounds good. Thanks for taking the questions this morning.
spk01: Of course. Of course. Thank you, David. Thank you. Your next question is coming from Sean Lee from HC Wainwright. Your line is live.
spk03: Good morning, Greg, and thanks for taking my questions. My first question is on the fibromyalgia program. Assuming that the fortress rates are positive and you have a meeting with FDA, what's the kind of phase three study that you imagine right now? I know some of it's going to be based on the exact data you get and also the feedback from the agency, but in your opinion, what's the type of phase three study that you would like to run?
spk04: Thank you, Sean, and I appreciate you joining for this morning's call. So if the data from the Phase IIb are positive, we will certainly make the case to do one additional Phase III program, inclusive of an extension trial. I think that's an absolute guarantee, and that one trial could be a multifactorial trial where we assess IMC1, placebo, and then the independent components to characterize the relative contribution of both components. Recall, as we've mentioned, historically, NSAIDs and COX-2 inhibitors have actually failed in fibromyalgia trials, and a fairly decent trial of an antiviral as a monotherapy failed as well. So that trial doesn't scare us, but as part of the fixed-dose combination approach, we will likely have to execute a multifactorial trial followed by the extension trial. We will make the case that given the size, the scope, the endpoints of the Phase IIb, that should be part of our registration package. we can never guarantee that. And obviously the data will dictate the robustness of the response in that trial. But in a perfect world, ideally we would do one phase three trial, but obviously that is subject to further discussion with FDA based on the quality of our phase two B program. So I think that that's the base of the phase three program. There'll be other ancillary programs that are probably required, potentially some drug-drug interaction studies, et cetera. But I think at a minimum, we should be focused on a one multifactorial trial, an extension trial to to glean safety data over the long term, and that will be plus or minus the second Phase III program. I think that's as much clarity at this point as we can proffer in lieu of those Phase IIb data.
spk03: Thanks for that. Just a quick add-on on that then. Do you expect the Phase III to run mostly or entirely in the U.S., or do you expect that to be international arms as well?
spk04: TPD, we would certainly expect at least one trial here in the U.S. I think between Ralph, who's on the call today, and our chief medical officer, Mike Gendro, we have a really good working, productive working relationship with the U.S.-based fibromyalgia community and would certainly avail ourselves of executing with those sites again. The question becomes, what do we do for the ex-U.S. markets? Could we run a second program in Europe, part Asia? That is TBD. And as you probably would surmise, Sean, I think there'll be significant interest in this asset if we are successful in the Phase 2B program. So partnership, some form of collaboration is certainly a potential. And partnership XUS is certainly an attractive way to expand both the research program and also the potential commercial opportunity for IMC1 in the fibromyalgia vertical.
spk03: That's all the questions I have. Thanks.
spk04: Thank you, Sean. Appreciate your participation this morning.
spk01: Thank you. That concludes our Q&A session. I will now hand the conference back to Greg Duncan for closing remarks. Please go ahead.
spk04: Thank you for attending, and thank you, Matt. It's a really exciting time for Viriosterin Thetics, as I referenced in our earlier remarks. As you know, we're focused on two very significant commercial opportunities. a very large but unfortunately dissatisfied fibromyalgia opportunity, which represents 2%, if not more, of the worldwide population. And that dissatisfaction in that large market is really anchored to two facts. One, there's only three FDA-approved drugs to treat fibromyalgia. And unfortunately, all three are CMS-mediated in a mechanism of action perspective and, as a consequence, come with significant side effects, things like sedation and You do have some weight gain associated, increased heart rate with the available therapies. So while all three therapies are effective, they are not optimal for many, many patients. And we think a safe and effective new fibromyalgia medicine could have very significant potential to change treatment standards and garner significant reward for the company that gets there. As we referenced in our remarks, long COVID is an exciting opportunity, a bit behind the fibromyalgia opportunity in that it's exploratory. but we think could also provide much-needed relief for the millions of patients that are unfortunately suffering the long-term sequelae that are associated with COVID infection. As I'm sure you're aware, our first-in-class antiviral combination oral IMC1 has already demonstrated significant pain reduction, reduction in fatigue, improvement in patient functionality, and tolerability better than placebo in that completed trial. That's quite important given the dissatisfaction, at least from our market research, is primarily resident in the side effects associated, the tolerabilities associated with the three approved therapies. This unique approach is going to the first ever FDA fast track review designation. I think as evidence of the novelty of that approach, IMC1 as well as our stable of other antiviral combination therapies have composition of matter intellectual property protection to 2033. And most excitingly, the phase 2b fibromyalgia results are expected in September of this year. Our team and board of directors have led development and commercialization of many category-leading drugs, including two of the three FDA-approved fibromyalgia medicines. And I truly believe that experience has enabled us to stay on schedule to deliver top-line results from the FORTRESS trial this September. This is clearly important to various shareholders, but it is most important to millions of people who suffer from the pain, fatigue, and mental health-related complications of fibromyalgia. We hope to change the standard of care for fibromyalgia patients worldwide if the data from our ongoing Phase 2B Fortress trial are consistent with the data we've already generated from our previously completed Phase 2A program. Stay tuned as we are roughly one month away from this very important milestone. Thank you all for attending today's call.
spk01: Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
Disclaimer