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spk01: Good morning and welcome to the ViantBio year-end 2021 results conference call and webcast. Today, March 30, 2022, the company issued a press release summarizing results for the year-end 2021 and filed its Form 10-K. Today's discussion will provide an overview of activities in the fourth quarter and full year 2021, is being recorded, and a replay of the webcast will be available on the ViantBio website following today's call. Alternatively, the link can be sent to you by contacting IR at ViantBio.com. All participants on this call will be in a listen-only mode during the presentation. The presentation will be followed by a question-and-answer session. At this time, I would now like to turn the conference over to Jay Roberts, Chief Executive Officer of ViantBio. Please go ahead, sir.
spk03: Thank you, operator, and thank you all for joining the Buy and Buy Investor Conference call and webcast of the year ended December 31st, 2021. While we had planned to file our SEC reports and our press release sooner, the SEC system was experiencing a global connectivity issue for a short period of time, so we apologize for that delay. Now that the merger and the related integration activities are substantially complete, we spent the fourth quarter fully focused on executing our business plan. It is also a great pleasure to speak with you today to share our enthusiasm and to give you some insight into how we envision the near-term future of Buy and Bio. Additionally, we're going to present financial results for the year ended 2021. On the call with me today is Buy and Bio's Chief Financial Officer, Angela Frenz, and our Chief Science Officer, Dr. Robert Fermot. Following the Safe Harbor Statement, Dr. Fermot and I will provide a strategic overview and update on recent scientific and corporate developments and the vision ahead. Then Andy will take us through a brief financial update to discuss key accounting matters for the 2021 periods just ended. I will make some closing remarks, and then we will open up the lines for questions for Andy, Bob, and me. I will now turn the call over to our CFO, Andy LaFrance.
spk02: Thank you, Jay, and welcome to all. We would like to remind everyone that various comments about future expectations plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Line Bio cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, including risks described in the company's filings with the Securities and Exchange Commission. Any forward-looking statements made on this conference call speak only of today's date, Wednesday, March 30th, 2022, and ViantBio does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today's date. This conference call is also being recorded for audio rebroadcast on ViantBio's website at www.viantbio.com. With that, I'd like to turn the call back over to Jay Roberts. Jay?
spk03: Thank you, Andy. As we begin the call today, I think it's important to remind everyone that the fourth quarter was the third full quarter our company has operated as Viant Bio. And today marks the one year anniversary of the merger. Today we will highlight the progress and accomplishments we have made over the past year. We have narrowed our focus to position Viant Bio as an emerging global drug discovery company, pursuing a discovery and development of repurpose and novel therapeutics to treat neurodevelopmental and neurodegenerative diseases, such as Rett syndrome, CDKL5 deficiency disorder, or CDD, and Parkinson's disease. We believe there are significant valuation drivers in the drug discovery sector, and we intend to use our unique approach to drive cost, savings, speed, and insightful decision-making to identify unique biological targets and novel therapeutics to treat patients with these debilitating diseases. We have made promising progress, which we will highlight for you today. As you can see on this slide, we have four key discovery programs underway, which Dr. Fermat will elaborate on in a few minutes. We entered 2020-22 focused on bringing a repurposed drug candidate, BYNT0126, into clinical trials in the first half of next year. We plan to provide you with more data in the identification of our lead clinical compounds soon, once we finalize our IP efforts in the middle part of this year. Our first two novel drug candidates, which support the two rare diseases we noted, are in the lead identification phase of discovery with our R&D teams. We have more work to complete on compound selection, the iterative process, including high-throughput screening on our 3D micro-brain form, the application of AI technologies on the chemistry, which is being done by our partners, as well as our own analytics for interrogating the biology through our own proprietary machine learning system. We are hoping to report our lead candidates for these programs late this year as we move into the lead optimization phase early in 2023. I will now highlight a few key non-financial accomplishments of last year. and actions as we are now wrapping up our first quarter of 2022. First, we strengthened our management team with the addition of an accomplished drug discoverer. One of our key hires last year had been the hiring of Dr. Bob Fermo, who joined us in October of 2021 to lead our drug discovery efforts, including lead target and candidate identification through IMD submissions. Dr. Fermot is already having a meaningful impact on our efforts in discovering novel therapeutics, which he will share with you in a few minutes. Again, we made a strategic decision earlier this year to further focus our business and our people on drug discovery and move away from providing products and services to others. In December of 2021, we engaged Collier's Securities in investing in preclinical contract research organization services. to assist us in the divestiture of our VivoPharm preclinical services business. We recognize that VivoPharm is a well-run operation with a skilled scientific staff. Our exit from the preclinical CRO services business will allow us to put our human and capital resources on our R&D efforts to discover and develop therapeutic assets for CNS diseases. The intended result of this transaction will be incremental, non-dilutive cash that provides fuel for our business. We are hoping to have this transaction completed in the first half of 2022. Further, as we noted in our September 30th, 2021 form and queue filing, we began replicating certain R&D activities from our La Jolla, California location to our Maple Grove, Minnesota facility. As a result of the shift in our overall focus on CMS assets, we plan to see substantially all broad-based external product and discovery as a service revenue generation activities in the first half of 2022. In light of these changes, substantially all our Maple Grove staff will be focused on an internal CNS drug discovery pipeline. Third, yesterday we announced an important collaboration agreement which we entered into with a promising company and scientific team from Organotherapeutics, a developer of proprietary patient-specific organoids that recapitulate Parkinson's disease pathology. We believe this collaboration will accelerate our ability to discover small molecule therapeutics to treat patients with Parkinson's disease. The collaboration brings together the respective team's expertise in drug discovery using human-derived cells, high-throughput biology and chemistry, and machine learning-based therapeutic design. Together, we will focus on the identification of drug candidates that rescued the Parkinson's disease phenotype through the development of disease-linked, clinically translatable assays and biomarkers through multiple molecular, biochemical, and cellular methods and applying machine learning techniques to yield unbiased results. We know that therapies for diseases that affect the CNS are difficult to discover and requires innovation and exceptional scientific expertise to tackle. Our collaboration like the few others we have entered, is another in a series of strategic moves to focus our efforts while accelerating our position in drug discovery through the use of technologies that allow insight into human biology early in the discovery of CNS drugs. I will now turn the call over to our Chief Scientific Officer, Bob Fermo. Bob?
spk05: Thank you, Jay. I am thrilled to have the opportunity to discuss the Bio and Bio Pipelines. At Viant Bio, we are pioneering a new way to discover medicines for complex neurodevelopmental and neurodegenerative disorders. We have developed a CNS drug discovery platform that combines human patient-derived organoid models of brain disease, biology at scale, and machine learning to discover novel CNS drug candidates. Most drugs fail in the clinic due to lack of efficacy. This is especially challenging for CNS drug development, where the available animal models have poor predictive value. Our approach is designed to allow us to identify therapeutic candidates that are active in a human disease setting at the earliest stages of a program, potentially bypassing the need for animal models of efficacy. 2021 was a year when we focused on defining our strategic vision for ViantBio and establishing and validating our human-first drug discovery platform. We chose to initially focus on applying the transformative potential of our platform to develop precision medicines for patients suffering from rare CNS genetic disorders including Rett syndrome, CDKL5 deficiency disorder, and familial Parkinson's disease. Our scientific team has pioneered the development of organoid models of human brain disease from patients derived induced pluripotent stem cells that are sufficiently robust and reproducible to be amenable to high throughput screening. We are using this approach to identify both repurposed as well as novel small molecule therapeutic candidates. A key element of our strategy is the identification of relevant drug targets based upon therapeutic hypotheses that we derive from our investigation of human disease pathophysiology and the use of quantitative biomarkers to provide meaningful human biology-derived preclinical signals of drug efficacy to drive compound advancement. As we established our CNS drug discovery platform, we knew that we needed to employ the most innovative technologies to accelerate our drug discovery efforts and establish our competitive advantage. To this end, we established a proprietary technology platform, Analytics, that is purpose-built for the processing, aggregation, and storage of large data files containing digital images of biological activity primarily derived from our organoids for use in our downstream data analysis and machine learning models. Our data science team has developed an efficient process to translate drug experiment designs from the lab into machine readable formats, to process large data sets sourced directly from laboratory equipment, and to extract unbiased quantified representations of biologically relevant features to enable the characterization of disease states, the profiling of treatment effects, and the assessment of possible toxicity or adverse events. We further pursued key collaborations with companies that employ artificial intelligence and machine learning based therapeutic creation and prediction in three areas. novel small molecule design, proteome-based target identification, and novel biologics protein design. All three arrangements have meaningfully accelerated our focused CMS therapeutic discovery efforts. Rett syndrome is a rare genetic neurological disorder that leads to severe impairments affecting nearly every aspect of the child's life, including their ability to speak, walk, eat, and even breathe easily. The hallmark of RET is near constant repetitive hand movements. RET is usually recognized in children between six to 18 months as they begin to miss developmental milestones or lose abilities they had gained. RET is caused by mutations on the X chromosome in a gene called MECP2. Our RET patient brain organoids exhibit a consistent and robust disease-specific functional phenotypic signature that is markedly different from that of healthy control organoids and can be measured in a high-throughput fashion using kinetic imaging systems such as Flipper. We currently have two ongoing and promising programs focused on RET, a repurposing candidate, Viant 0126, and several novel compounds that were identified based on a phenotypic screen of the SMART library provided by the International RET Center Foundation on our RET patient-derived organoids. The VYNT0126 molecule is a promising repurposing candidate for several reasons. The compound has already been approved by the FDA as a cognition-enhancing medication for dementia related to Alzheimer's disease, and there are readily available safety data. VYNT0126 exhibits a consistent dose-dependent rescue of several RET disease phenotypes in our RET patient-derived organoids. We intend to file an IND application for our RET repurposing candidate in Q1 of 2022 and to request orphan drug designation. We are meeting with the International Rett Syndrome Foundation Clinical Trial Committee in mid-April to prepare for a pre-ID meeting with the FDA. We are also pursuing novel compounds for Rett directed against two additional targets in collaboration with our joint venture partner, Atomwise. We are applying machine learning to drive compound progression and are establishing in vitro binding and cell-based functional assays for these targets to examine the relationship between target potency and the degree of phenotypic rescue in our organoid models. We expect to identify potential lead candidates in 2022 and commence IND enabling studies in the first half of 2023. We are excited by recent evidence we have obtained that both our repurposing candidate BYNT0126 and our novel RET candidates act on distinct biochemical targets and exhibit a differentiated mechanism of action than the most clinically advanced RET therapeutic candidates. CDKL5 deficiency disorder is a neurodevelopmental condition characterized by early onset epileptic seizures, intellectual delay, and motor dysfunction. Although crucial for proper brain development, the precise targets of CDKL5 and its pathophysiological link to patient symptoms are currently not understood. While genetic testing is currently available to identify patients that have a mutation in the CDKFI gene, limited knowledge of the underlying pathophysiology has hindered the identification of potential therapeutic targets and the discovery of drug candidates. EDD is an ultra-rare neurodevelopmental disease with a defined unmet medical need with only one recently approved therapeutic treatment. We screened a custom library of approximately 5,200 molecules composed of FDA-approved drugs, molecules that passed phase one clinical trials, and a panel of phenotypic screening compounds with the goal to identify both novel molecules and potential repurposing candidates. Approximately 288 compounds show some degree of rescue of the CDD phenotype, hyper excitability phenotype, in our organoid models. We are conducting further confirmatory screening, followed by dose response studies and pharmacologic deconvolution to identify promising lead scaffolds. In addition, in collaboration with CICLICA, we are applying a machine learning approach utilizing silico screening to identify novel candidate molecules for three potential CBD targets that we will screen in our CBD organoids. We expect to identify potential lead candidates towards the end of 22 and commence IMD-enabled studies in the first half of 2023. Parkinson's disease is a progressive neurogenic disorder that affects predominantly dopamine-producing neurons in a specific area of the brain called the substantia nigra. Parkinson's disease symptoms generally develop slowly over the years and include tremors, muscle rigidity, gait and balance problems, and slow, imprecise movements. The etiology of Parkinson's disease is poorly understood, but it is widely accepted that a combination of genetics and environmental factors are the cause. About 10 to 15% of people with Parkinson's disease have a family history of the condition, and indeed, family-linked cases can result from genetic mutations in a handful of genes, including the glucosidase gene, GBA, and LRRK2, among others. As Jay mentioned, on March 29th, we announced a collaboration with Organotherapeutics to advance our work on the identification of lead compounds that are expected to be disease-modifying in Parkinson's disease. Organotherapeutics has developed several proprietary familial Parkinson's disease patient-specific organoids that recapitulate Parkinson's disease pathology. The collaboration brings together the respective teams' expertise in drug discovery using human-derived cells, high-throughput biology and chemistry, and machine-learning-based therapeutic design to gain insights in the patient-specific responses to potential Parkinson's disease drugs. Scientists from both sites will utilize complex patient-derived 3D organoid models created from induced pluripotent stem cells to identify disease-linked clinically translatable assays and biomarkers through multiple molecular, biochemical, and cellular approaches to identify drug candidates that rescue the PD phenotype. Our initial focus will be on the GBA and LRK2 familial mutations. By focusing initially on these familial Parkinson's disease-linked mutations, we expect to identify common causes and potential therapeutic approaches that can be expanded into the much larger sporadic patient population. I will now turn the call over to Andrew LaFrance, our Chief Financial Officer, to discuss financial results for the year end 2021. Andy?
spk02: Thank you, Bob. Hello, everyone, and thank you again for joining our call. Today, we'll review our cash position as of December 31st, 2021. in our financial results for 2021. First and foremost, we ended the year with $20.6 million in cash. We supplemented our liquidity with Monday signing of a $15 million equity line of credit with Blinken Park. We believe that this equity line of credit, coupled with our cash balances and estimated proceeds from the sale of the Bebo Farm business, will provide this cash runway into mid-2023. Before I review the 2021 Statements of Operation data, a little background information will help explain results. As you will recall, Stamonix, Inc. was deemed to have acquired cancer genetics for accounting purposes, and the merger closed a year ago, March 30th, 2021. The company's current year financial results include the cancer genetics operations since the merger date, and the 2020 financial results are based solely on the synonyms operations. As Jay noted in his remarks, during the fourth quarter of 2021, we commenced the process to sell the Beaver Farm business. As a result of this decision, we have classified the Beeble Farm business as a held-for-sale asset and its financial information as discontinuing operations. Therefore, continuing operations as of and for the year ended December 31st, 2021, consist of the Vite Bio and Stamonix Inc. The reclassification of the VivoPharm business as held for sale required us to assess its fair value based on its estimated net selling price as compared with its carrying value, which included the $22.4 million of goodwill arising from the March 30th, 2021 merger. As a result of this analysis, we recorded a non-cash goodwill impairment charge of $20.2 million in the fourth quarter of 2022. Overall, the net loss of $8.7 million in 2020 increased to $40.9 million in 2021. The 2021 net loss included a total of $26 million of non-cash expenses, as well as $2.3 million of merger-related expenses. The net loss from continuing operations aggregated $18.6 million and included non-cash expenses of $4.8 million, as well as $2.3 million of merger-related costs. A net loss of $22.3 million from discontinuing operations included the $20.2 million goodwill impairment charge and non-cash expenses of approximately $1 million. Revenue from continuing operations for 2021 was $1.1 million as compared with $867,000 in 2020. This revenue was derived from our Stamonix product and service revenue. As we previously reported, we plan to discontinue the Stamonix external revenue generation to focus on our resources on internal drug discovery efforts. Cost of goods sold service aggregates $408,000 in 2021. and $384,000 in 2020, resulting in the cost of goods sold of 61.4% and 65.3% respectively. Cost of goods sold products aggregate $1.4 million and $717,000 for the years that ended December 31st, 2021 and 2020, resulting in the cost of goods sold margin deficit of $956,000 and $438,000 respectively. The increase in the product cost of sales in 2021 were employee and other product-related costs. As we move our Maple Grove facility to internal development activities in 2022, the costs for this facility will have a corresponding shift to research and development costs in 2022. Research and development costs for 2021 increased to $4.3 million as compared with $3.2 million in 2020, and was a result of increased headcount, lab, and professional service costs. Selling, general, and administrative expenses increased from $2.7 million in 2020 to $8.4 million in 2021. This increase was largely related to post-merger public costs including headcount, stock lease compensation, professional fees, and insurance costs. I will close for now and hand the presentation back over to Jay Roberts for closing remarks. Jay?
spk03: Thank you, Andy. As we come to the final part of today's call, I'd like to conclude with the following takeaways. First, I'd like to reiterate how pleased we are with the progress our scientific teams are making on multiple fronts related to the existing programs. We discussed today that our activities in the fourth quarter and year end 2021 focused purely on establishing Valiant Bio's foothold in the industry and helping to fuel our activities into the first quarter of 2022 and beyond. Please stay tuned as we continue to make progress. We also invite new listeners to become more familiar with Buy It Bio. As news and information becomes available, we will be communicating updates via press releases, LinkedIn, the new Buy It Bio website, and other social media outlets. Interested parties are invited to sign up for the press release distribution list. Please visit our website. With that, I invite Andy and Bob to join me as we open up the line for Q&A. Operator.
spk01: Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone now to join the queue. If you wish to withdraw from the queue, you may press star 2. We do ask that if you are listening via speakerphone to please take up your handset for optimum sound quality. Once again, if you have any questions or comments, please press star 1 now. Our first question today is coming from Ed White at HC Wainwright. Your line is live. You may begin.
spk06: Morning, Jay, Andy, and Bob. Thanks for taking my questions. So the first question is about the divestiture of Devo Farm. Have you had any interest yet? And can you give us our thoughts maybe on the value of of that divestiture. And then, Andy, how should we be thinking of revenue from continuing operations with the divestiture for 2022?
spk03: So let me just start, and then Andy can fill in the blanks here. So just in terms of the level of interest, Collier's Securities started marketing the opportunity several weeks ago, and You know, so far the interest level we think is pretty high. So we're quite optimistic about what we've seen so far. And, you know, they've done a really good job for us. And as we move through, you know, what is a very well-defined process and we're anticipating it will stay on our schedule or pretty close to it. That being said, in terms of valuation, I think maybe the best way to think about it is the work that we did relative to the accounting for it. And, Andy, that's perhaps something that you can just address real quickly if you could.
spk02: Yeah, thank you, Jay. And what I would say about the valuation in terms of our expected cash flow is that we're very fortunate to have a number of market comps out there, not only in terms of transaction sets as well as potential acquirers of the company. And given those revenue multiples, you would expect to see a business like this to sell for anywhere between one to two plus times revenues. And so as we think about valuing the company, we use those sorts of parameters to get our arms around that. And there's a number of different pieces to that that are relative. One is obviously historical revenues, but we also think that that business, which is very well run, is on a very good revenue growth trajectory given what we see going on in terms of its signed and backlogged contracts. So right now we've got, and this is all within our 10K filing, we've got it valued somewhere north of $10 million, and our expectations are that we would continue to go through a very robust process here And we're looking forward to seeing some bids here in the near term. The second piece of your question there was in terms of continuing operations revenue generation. Ed, we really expect that to be less than half a million dollars in 2022. We really are very quickly winding that down. And I think Bob is very pleased with our focus and getting our team in Maple Grove and working with our team in La Jolla to accelerate our drug discovery progression. So that should be your expectation for 2022 revenues.
spk06: Okay, thanks, Andy. And then, you know, Bob actually was speaking very quickly, so I want to make sure I didn't miss anything here. But on VYNT 0126, the repurposed drug, Can you just go over the timeline again as far as the timing to the IND filing and how far you're going to bring the drug before looking to partner it?
spk03: Well, why don't you pick that one up, and I'll fill in on the backside of sort of the future.
spk05: Sure. Thanks, Jay. So first, apologies, Ed, for talking too fast. I was pretty excited. Sorry about that. We are meeting with the International Rett Sinem Foundation in middle April, the 16th or 17th, to meet with our clinical trial committee to draft the plans for our setting a date for a pre-IND meeting with the FDA. We expect to request a pre-IND meeting in the May-June timeframe, and then two months later, we would have our meeting with the FDA. So we expect to have the... the actual IND meeting in the early to mid part of Q4, so sometime in the September, October timeframe for submitting the IND. And then with the timeline for approval, we hope to have the approval completed by the end of the year for the IND approval.
spk03: And let me just also address the second part of that question, which was how far do we think we're going to bring it. You know, obviously being able to partner with parties that may have an interest in taking the drug all the way through to commercialization is our ideal pathway. We're prepared to take it as far as we need to to get to the right economics. And we're in the, you know, very active process in terms of getting those kinds of relationships built as we speak today. And, you know, we'll see kind of the interest rate, but we think that, you know, given the Certainly the economic dynamics of drugs that are treating rare diseases that have little to no, very high medical need, we think that they'll be of a certain amount of interest.
spk06: Okay, great. Thanks, Bob.
spk02: All right. Jay, we've got a couple questions that have come up in the online chat room here, and maybe I could... As people maybe queue up for additional questions here, I could respond to those. One of the questions that came up was related to our cash burn. In our stated remarks here, the combination of cash on hand of $20.6 million plus the Lincoln Park equity loan credit and proceeds from the vehicle farm business, we expect that we've got cash into at least mid-2023 at this point in time. And that also, at this point in time, as we talk about cash flow, does not look at a licensing transaction at this point in time. But as Jake and Bob just articulated, we're getting to a point where we can start to have these candidates into a clinical setting where they're going to be licensable. So I think that answers a couple of the questions that are currently in the chat room.
spk03: Okay, operator, I don't believe that there's no other questions. I'd just like to be able to thank everybody for joining the call today. We're very happy with our progress so far, and we look forward to keeping everyone informed of our progress along the way. Thanks again for joining the call, and have a great day.
spk01: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time, and have a wonderful day. We thank you for your participation.
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