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spk00: Good afternoon and welcome to the ViantBio first quarter 2022 earnings conference call and webcast. Today, May 16, 2022, the company issued a press release summarizing results for the first quarter 2022 and filed its form. Today's discussion will provide an overview of activities in the first quarter and 2022 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.
spk05: Thank you, operator, and thank you all for joining the ViantBio Investor Conference call. and webcast for the first quarter of 2022. We're pleased to have a fresh start to the year for Buy and Bio, a new beginning in many ways. We spent the first quarter fully focused on progressing our scientific research and development business plan. Our call today will articulate some of the scientific insights that we have gained in the quarter, along with our financial results for the quarter. As such, on the call with me today is Buy and Bio's Chief Financial Officer, Andy LaFrance, and our Chief Scientific Officer, Dr. Robert Fermo. Following the safe harbor statement, I will start out describing the corporate initiatives we have accomplished so far this year. Then, Dr. Pervot will provide an overview and update on recent scientific achievements made in the quarter and the vision ahead. Finally, Andy LaFrance will take us through a brief financial update and discuss key accounting matters for the first quarter of 2022. I will make some closing remarks, and then we will open up the lines for questions. I will now turn the call over to our CFO, Andy LaFrance.
spk07: Thank you, Jay, and welcome to all. We would like to remind everyone that various comments about future expectations, plans, prospects, constitutes forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigations Reform Act of 1995. Bio cautions that these forward-looking statements are subject to risks and uncertainties They may cause our actual results to differ materially from those indicated, including risks described in the company's filings with the SEC. Any forward-looking statements made on this conference call speak only of today's date, Monday, May 16, 2022. Invite BioDesign 10 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 Viant Bio's website at www.viantbio.com. With that, I would like to turn the call back over to Jay Roberts. Jay.
spk05: Thank you, Randy. As we begin the call, I think it's important to remind everyone that we committed to our shareholders during the first quarter of 2022 to solely focus Viant Bio as an emerging global drug discovery company pursuing the discovery and development of novel and repurposed therapeutics. to treat neurodevelopmental and neurodegenerative diseases, such as Rett syndrome, CDKL5 deficiency disorders, or CDD, and Parkinson's disease. We believe that as we execute our focused strategy to develop and bring important therapeutic assets into our pipeline, we hope to enhance our shareholder value. Let's begin with a few highlights. As we've discussed on our previous call, we have four key discovery programs underway. And today, we will take you through some of our recent scientific data, which Dr. Fermot will discuss in a few minutes. We entered the first quarter of 2022 focused on bringing a repurposed drug candidate, BYNT0126, into clinical trials in the first half of next year. Our first two novel drug candidates, which support the two rare diseases we noted, are in lead identification phase of discovery with our R&D teams. We have more work to complete on compound selection through an iterative process, including high throughput screening on our 3D micro brain platform, 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're hoping to report our lead candidates for these programs late this year as we move into the lead optimization phase early in 2023. We'll now highlight the key business accomplishments for the first quarter and related actions we are taking as we head into the second quarter of 2022. First, as we discussed on our last webcast, we announced an important collaboration agreement which we entered into with a promising company and scientific team from Organo Therapeutics, 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 teams' 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 rescue 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. to the use of technologies that allow insight into human biology early in the discovery of CNS drugs. Second, we made a strategic decision earlier this year to further focus our business and our people on drug discovery and move away from providing preclinical CRO services. We engaged an investment banking team with significant experience in transacting preclinical contract research organizations to assist us with the divestiture of our VivoPharm preclinical services business. We recognize that VivoPharm is a well-run business with a skilled scientific staff. Our exit from the preclinical CRO services business will allow us to put all of our human and capital resources on our R&D efforts to discover and develop therapeutic assets for CNS diseases. We are currently entertaining several indications of interest from qualified parties and have a robust M&A expression of interest process that we believe will yield a favorable transaction for both sides. The intended result of this transaction will be incremental, non-dilutive cash to our balance sheet that provides fuel for our business. We are working hard to do our best to close the transaction in the next 60 to 90 days. Further, as we noted in prior calls and quarterly reports, we have relocated our R&D facilities in Loya, California to a new location nearby. That move is substantially complete. We now have redundancy and strong scientific R&D teams in both of our R&D facilities in Maple Grove, Minnesota, and San Diego, California, progressing on our internal CNS drug discovery pipeline. Third, we implemented two new financing vehicles to facilitate the raising of additional equity capital at the company's option with an equity line of credit provided to us by Lincoln Park Capital, allowing access to raise up to $15 million, as well as signing contracts and up to $14.5 million at the market or ATM facility with Canaccord Genuity. Andy will discuss this further in a few minutes to highlight that our current cash balances, future proceeds from the divestiture of our Beagle Farm business, and future proceeds from the equity line of credit and ATM are expected to fund operations well into 2023. Fourth, we're participating in investor conferences to get our focused vision in front of investors and our shareholders. In January, we presented at the HC Wainwright Bioconnect Conference, and last week we participated in the BioNJ 12th Annual Biopartnering Conference. We'll also be in Miami next week presenting at the HC Wainwright Global Investor Conference. I hope that you can join us there. Finally, we're also focusing on additional shareholder engagement during the coming months to communicate our strategy to both retail and institutional investors. With that, I will now turn the call over to our Chief Scientific Officer, Robert Fermot.
spk04: Robert Fermot Thank you, Jay. I am thrilled to have the opportunity to discuss the Viant pipeline. 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 with efficacy. I have some exciting data to share with you today which is the validation we have been working on to support the identification of our lead clinical compound, Viant-0126. Our first two novel drug candidates would support the two rare diseases we noted are in the hit-delete identification phase of discovery with our R&D teams. We have more work to be done on compound selection through an iterative process including high-throughput screening on our 3D micro-brain platform, the application of AI technologies on the chemistry which is being done by our joint venture partner and collaboration 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 and progress to clinical candidate selection early in 2023. We are continuing to refine our focused scientific approach in validating our human-first drug discovery platform. Our scientific team has pioneered the development of organoid models of human brain disease from patient-derived induced pluripotent stem cells that are sufficiently robust and reproducible to be amenable to high throughput screening. A key element of our strategy is the identification of relevant drug targets based on 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 discovery efforts and establish our competitive advantage. To this end, we established a proprietary technology platform, Analytics, that is purpose-built for processing, aggregation, and storage of large data files containing digital images of biological activity. primarily derived from our orguloid models for use in our downstream data analysis and machine learning models. We have developed an efficient process to translate drug experiment designs from the lab into machine-readable formats, process large data sets sourced directly from laboratory equipment, and 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. Rett syndrome is a rare kinetic autism spectrum neurological disorder that leads to severe impairments affecting nearly every aspect of a child's life, including their ability to speak, walk, eat, and even breathe easily. The hallmark of Rett is near constant repetitive hand movements and seizures. Rett is usually recognized in children between six to 18 months as they begin to miss developmental milestones or lose the abilities they had gained. RET is primarily caused by mutations on the X chromosome in a gene called MEKP2. As you can see on this slide, our RET patient brain spheroids exhibit a unique disease-specific functional phenotype 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 used our assay analytics program to extract and quantify the disease-specific features of the RET spheroid waveforms shown in the spider plot on the right, including things like peak morphology, peak height, and frequency, among others. As shown on this slide, our ability to reproducibly generate RET neurospheroids that exhibit consistent and robust functional phenotypic differences across multiple independent experiments provides a basis for our ability to screen for drug candidates that can rescue the disease phenotype. We currently have two promising ongoing programs focused on RET, a repurposing candidate, VIANT0126, and several novel compounds that are directed against two distinct targets that were identified based on a phenotypic screen of the SMART library provided to us by the International RET Student Foundation, screened on our RET patient-derived organoids. This slide shows that VIANT0126, which is the dose-dependent rescue of the RET functional phenotype, following chronic treatment that is correlated with target engagement in the retrospheroids. The slider plot in the middle shows dose-dependent rescue of individual parameters of the flipper waveform. This data is summarized in the graph on the right, which shows that rescue of individual flipper parameters occurs at nanomolar concentrations of drug and may not need full target engagement. Importantly, Viant 0126 is known to reach these levels of concentration in the human brain. The Viant-0126 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. Viant-0126 exhibits a consistent dose-dependent rescue of several RET disease phenotypes in our RET patient-derived organoids, and we are working with the International RET Student Foundation to file an investigation of new drug applications for RET repurposing candidate in Q4 of 2022 and to request orphan drug designation. We are meeting with the clinical trial committee of the IRSS in May to prepare for a pre-IND meeting with the FDA. We are also pursuing novel compounds for RET 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 degree of phenotypic rescue. We expect to identify lead candidates in 2022 and identify potential clinical candidates in the first half of 2023. We are excited by recent evidence we have obtained that both VIAMS0126 and our novel RET candidates act on distinct biochemical targets and exhibit a differentiated mechanism of action from the most clinically advanced RET therapeutic candidates. CDKL5 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 not currently understood. While genetic testing is currently available to identify patients that have a mutation in the CDKL5 gene, limited knowledge of the underlying pathophysiology has hindered the identification of potential therapeutic targets and the discovery of drug candidates. CDD is an ultra-rare neurodevelopment disease with a defined medical need with only one recently approved symptomatic treatment. To investigate the selective vulnerability of neurons in CDKL5 mutation patients, we conducted a single-nucleus RNA-seq study of CDKL5 mutant versus healthy neuro-spheroids. We observed that the CDKL5 hyper-excitability phenotype is correlated with higher levels of expression of synaptic markers in CDD neurons, which we confirmed by immunostaining. In addition, we observed a higher neuron-to-astrocyte ratio and a reduction of expression of markers for inhibitory GABAergic neurons. 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 drug candidates and potential repurposing candidates for CDKL5 disorder. Approximately 288 compounds showed some degree of rescue of the CDD hyper excitability phenotype. We conducted further confirmatory screening and identified 40 compounds that produced a full range of efficacy, rescuing the flipper phenotype in a CDKL5 specific manner. We are currently conducting full dose response curves to these promising molecules. In addition, In collaboration with our collaborating partner, Cyclica, we are applying a machine learning approach utilizing on silico screening to identify novel candidate molecules for three potential CDD targets that we will screen in our CDD organoids. We expect to identify potential lead candidates toward the end of 2022 and hope to identify clinical candidates 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 years and include tremors, muscle rigidity, gain and balance problems, and slow, imprecise movements. The etiology of Parkinson's disease is poorly understood, but it is widely accepted a combination of genetics and environmental factors are the cause. About 10 to 15% of people with PD have a family history of the condition, and family-linked cases can result from genetic mutations in a handful of genes, including glucocerebrosidase and LRRK2, among others. 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. Organa Therapeutics has developed several proprietary familial Parkinson's disease patient-specific organoids that recapitulate Parkinson's disease pathophysiology. 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 to gain insights into patient-specific responses to potential PD drugs. Scientists from both sites will utilize complexity 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 familial PD phenotype. Our initial focus is on the GBA and LRRK2 familial mutations. By focusing initially on these familial Parkinson's disease mutations, we expect to identify common causes and potential therapeutics approaches that can be extended into the much larger sporadic patient population. Our teams are actively executing on a research plan that we believe will accelerate our work to discover novel therapeutics for the treatment of PD, a debilitating disease impacting about 10 million patients around the globe. In summary, I am very proud of the progress the team has made over the first quarter of 2022. We have become a fully integrated R&D team working seamlessly across two sites, in San Diego, California, and Maple Grove, Minnesota. Through the close collaboration of our cross-site and cross-functional biology and data science teams, we have made important discoveries identifying a differentiated method of action for our repurposed and novel RET candidates. Finally, the Maple Grove team has successfully completed the transition from doing service-related work to become a fully integrated R&D team, working closely with our San Diego team to execute on our strategic vision to discover new medicines for treating neurodevelopmental and neurogenic disorders, major causes of death and disability worldwide. Thank you for your attention, and I now turn the call back over to Andy LaFrance, our CFO. Andy?
spk07: Thank you, Bob. Hello, everyone, and thank you again for joining our call. Today, I will review our financial results for the quarter ended March 31st, 2022. First and foremost, we ended the quarter with $16.4 million in cash. We also implemented two new vehicles to facilitate the raising of additional equity capital at the company's options with the finalization of the Lincoln Park Equity Line of Credit, allowing us to access up to $15 million of capital, as well as signing a $14.5 million ATM with Canaccord Genuity. Our current cash balances, future proceeds from the sale of the VivoPharm business, and usage of the equity line of credit and ATM are expected to fund operations well into 2023. During the first quarter of 2022, the company continued the process of divesting the VivoPharm business, which is expected to be completed this year. Therefore, the VivoPharm business is classified as held for sale and its financial information as discontinuing operations. The company's loss from continuing operations aggregated $4.4 million in the first quarter of 2022 and included non-cash depreciation and amortization, as well as stock-based compensation of $98,000 and $278,000, respectively. and one-time severance charges of $437,000. Discontinued operations net loss for the March 31st, 2022 quarter aggregated $4.8 million and included a non-cash impairment charge of $4.3 million resulting from changed market conditions for contract research organizations from December 31st, 2021 to March 31st, 2022. Total revenue from continuing operations increased by 49.3% or $100,000 to $303,000 for the three months ended March 31st, 2022 as compared with $203,000 for the three months ended March 31st, 2021. As we previously noted, We are winding down our revenue generation activities in the first part of 2022 to solely focus our resources on our research and development activities. Cost of goods sold service from continuing operations totaled $38,000 and $64,000 respectively for the three months ended March 31st, 2022 and 2021, resulting in cost of goods sold of 40% and 60% respectively of service revenue. Cost of goods sold product costs decreased by 12% or $48,000 to $348,000 for the three months ended March 31st, 2022 as compared with $396,000 for the three months ended March 31st, 2021. Research and development expenses increased by 89% or $731,000 to $1.6 million for the three months ended March 31st, 2022, from $820,000 for the three months ended March 31st, 2021. This increase is principally due to $336,000 of increased payroll related and consulting expenses, a $315,000 increase in research and development activities at our Maple Grove facility, and $48,000 of costs related to moving to our new facility in California. Selling, general, and administrative expenses increased by $128,000, or $1.5 million, to $2.8 million for the three months ended March 31, 2022, as compared with $1.2 million for the three months ended March 31, 2021. The 2021 period reflects the company as a privately- held company, whereas the 22 period reflects the company as a publicly held company. The quarter ended March 31, 2022, includes incremental $564,000 of payroll-related expenses, including the one-time contractual severance benefits for two former employees of $437,000. The company incurred incremental professional service fees of $472,000 in the first quarter of 2022 as compared with the same prior year period related to accounting, audit, and other professional services and incurred $418,000 of additional insurance expense as a public company. I will close for now and hand the presentation over to Jay Roberts for closing remarks. Jay?
spk05: Thanks, 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, and that our activities in the first quarter focus purely on establishing BioNTech's foothold in the biotech industry and helping to fuel our activities into the future quarter and the year beyond. Second, we believe the total addressable markets in the two rare disease categories where we are focused is approximately $2 billion worldwide. And in the familial Parkinson's area, the addressable market is over $5 billion globally. So we think our positioning in the competitive landscape in CNS disorders is highly favorable. Stay tuned as we continue to make progress. We also invite new listeners to become more familiar with BioNPIO. As news and information becomes available, we'll be communicating updates via press releases, LinkedIn, our bio website, and other social media outlets. Interested parties are invited to sign up for press release distribution lists. Please visit our website. With that, I invite Andy and Bob to join me as we open up the line for Q&A. Operator?
spk00: 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 at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold while we poll for questions. Thank you. Your first question is coming from Ed White of HC Wainwright. Ed, please pose your question.
spk03: Hi, good afternoon. So just a question on 0126. You had mentioned previously that you were going to meet with KOLs and hope to draft plans for a pre-IND meeting with the FDA. I believe you had expected to make the request in May or June. I'm just wondering if you can give us an update on have you already done that or what your plans are for meeting with the FDA?
spk05: Yeah, Ed, so the meeting isn't set up yet, but we are getting ready. And in conjunction with the International Red Foundation that Bob had talked about, that's going to be part of that process. But we are intending to stay on that schedule that you just defined. Perhaps, Bob, you want to add a little bit more detail to that?
spk04: Sure. We have a meeting scheduled with the Clinical Trial Committee of the IRSF on May 23rd to review our clinical development plan for 0126. and we expect to submit our request for a pre-INDA meeting at the end of June, early July at the latest. And we're discussing progressing initially into an adult clinical trial, as was done with the two advanced clinical candidates, and then to establish the JuVetox data we need to get into the pediatric population as a follow-on.
spk03: Great. Thanks, Bob. Another question, if I may. You had mentioned in the past potentially targeting Huntington's disease. I was just curious if you've made any progress or have any plans for that indication.
spk05: So that's a great question. Thanks. So we are very focused on these two rare diseases and Parkinson's. And given this really strong interest in focusing on neurodegenerative and neurodevelopmental diseases, That's the place where we're going to put all of our energy and, you know, obviously our capital and human resources will focus there for the foreseeable future. And then to the extent that we find other disease targets of interest, you know, we'll certainly be talking about that more. But at the moment, you know, we really do think it's important that we focus in these four programs that we've talked about today.
spk03: Okay, thanks, Jay. And perhaps a question for Andy. You mentioned the two financing vehicles. I'm just curious if you've tapped them yet this quarter.
spk06: No, we have not. No, Ed, we have not.
spk03: Okay, thank you. That's all the questions I have. Thanks a lot. Thanks, Ed.
spk00: As a reminder, ladies and gentlemen, if you wish to ask a question, please press star 1 on your telephone keypad. Okay. Our next question is coming from Michael Mortensen of West Park Capital. Michael, over to you.
spk02: Yes, folks. Thank you for taking my call. My concern is, first of all, I've got two questions. Has NASDAQ contacted you in regards to being below $1, the stock?
spk05: Hey, Mike. Hi, this is Jay. So, yeah. So, no, we have not yet heard from NASDAQ at this point.
spk02: Well, you know, that's inevitable, right, at this price?
spk05: We, of course, don't know what might happen tomorrow.
spk02: Well, there are requirements. NASDAQ has got a requirement to trade above a dollar. And with that, the market, I mean, it's almost going to be below a dollar unless something spectacular happens. And then, of course, from there, it could become a potential reverse split, which is never good for the shareholders. And I'm just wondering where all of this great technology and stuff is going to benefit us. Because, again, unless, of course, this meeting with the FDA and my last question would be, how soon will they contact you back after that meeting? Because it's just with an active market hitting the stock already below $1. To get it above that level, I mean, again, you'll get six months, but I just don't see it. I'm just wondering how a shareholder is going to benefit from everything that's going on with their investment.
spk05: Yeah, so, you know, as we talked about today, Mike, we're very optimistic but quite happy with the results of our scientific team. And we're keeping our head down. We're very focused on the business. You know, we've made meaningful changes in terms of focusing in neurological diseases. We think that was an important step for us, continuing to just put our effort and time and energy into executing on our business plan. And we believe that we're on schedule and on time as it relates to that. So the execution side of this is actually working as we have planned.
spk02: Okay, so if this FDA meeting takes place on May 23rd, how soon could we expect the response from the FDA?
spk05: Bob, do you want to handle that? But we believe that it's like a 90 to 120 day window.
spk04: The meeting on May 23rd is with the International Rett Sinem Foundation Clinical Trial Committee. We'll request a pre-IND meeting end of June. And then two months later, we'll have the IND meeting, which we anticipate will be in the September timeframe. And then probably it's another 90 days before they give a response to the request for the IND. The clinical trials will begin in 2023, assuming that we are granted the IND.
spk01: Okay. Thank you very much.
spk00: Thank you, ladies and gentlemen. I'll now hand back over to Jay for any closing remarks.
spk05: Thank you, operator, and thank you all 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 today and have a great evening.
spk00: Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect your phone line and have a wonderful day. Thank you for your participation.
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