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spk00: Thank you for standing by, and welcome to the ViantBio Third Quarter 2022 Earnings Conference Call and Webcast. Yesterday, Tuesday, November 15, 2022, the company issued a press release summarizing the results for the third quarter of 2022. Today's discussion will provide an overview of activities in the third quarter and nine-month period ended September 30, 2022. Today's call is being recorded and a replay of the webcast will be available on the ViantBio website following today's call at www.viantbio.com. 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 will now turn the call over to Jay Roberts, Chief Executive Officer of ViantBio. Please go ahead, sir.
spk03: Thank you, operator. Thanks to all of you for joining us today. In our second quarter call, we have been very active progressing our scientific research and development activities while recently completing the day passage of our U.S. operations of VivoPharm. We are delighted to speak with you today to show enthusiasm and to talk about some recent accomplishments and awards, and give you some insight into how we envision the near-term future of ViantBio while providing our financial results in the third quarter in the nine months of 2022. That's such, and the colleague today is ViantBio's Chief Financial Officer, Andy LaFrance, and our Chief Scientific Officer, Dr. Robert Fermot. Following the Safe Harbor statement, I will start out with a brief overview of ViantBio, and describe the corporate admission as we have accomplished so far this year. Then, Dr. Pramod will provide an overview and an update on recent scientific achievements made this year and the vision ahead. Finally, Andy LaFrance will take us through a brief financial update and discuss key accounting matters for the reporting period. I will make some closing remarks, and then we will open up the line to answer your questions. I will now turn the call over to our CFO, Andy LaFrance.
spk01: Thank you, Jay, and welcome to all. We'd 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. VAIO cautions that these forward-looking statements are subject to risks and uncertainties that may cause are asked 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 contact call speak only of today's date, Wednesday, November 16, 2022, and VIO 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 would like to turn the call back over to Jay Roberts. Jay?
spk03: Thank you, Andy. As we begin the call, I'd like to remind everyone that we committed to our shareholders during the first half of 2022 to focus ViantBio on discovering novel therapeutics to treat patients suffering from neurodevelopmental and neurodegenerative brain disorders. We believe that as we execute our focused strategy on demonstrating the power of our drug discovery platform and bringing important therapeutic assets onto our pipeline, we strive to enhance value for our shareholders. As a reminder to those of you who have been following us, I'd like to start by reiterating our mission, which is uniting human biology engineering, the science, and our passion to transform lives. As I have attended various scientific meetings over the last several weeks, it has continued to remind me that the acceleration in the drug discovery sector of our industry continues to be rapid, notwithstanding the headwinds we are feeling in the biotechnology industry, disrupting the underperformance of widely used models for predicting drug efficacy and safety. Our approach to use human cells in IPSC disease modeling and applying artificial intelligence and machine learning to convert digital images into useful data, thereby providing meaningful insights to our scientists, will transform the way we treat patients and cure disease. There has never been a more exciting time to work in this industry. Our approach is innovative, and I believe we're amongst the leaders focused on transforming drug discovery. Our disease-centric approach that brings human understanding into the lab, providing a greater level of certainty to neurological drug discovery and development, will allow us to bring disease-modifying therapeutics to patients. On that note, Dr. Firmone will talk more about some of the very promising data and recent news about our pipeline and upcoming perfect concept clinical trial work in just a few minutes. As we close out the third quarter, a number of subsequent events transpired that are consistent with several corporate goals that we set for this year. So today, we will share those highlights with you. At a high level, on November 6, 2022, we announced the closing of the sale of our U.S. operations of VivoPharm to Reaction Biology. We are continuing to work through a strategic process for our Australia CRO business. as well as the product sales business operating under our stemonic sub. And he will take us through some of these details and related cash impacts. Our exit from the preclinical CRO services business and our product sales businesses anticipated to be completed in the coming months will allow us to put all of our human and capital resources into our R&D efforts to discover and develop therapeutic assets for CNS diseases. We have been at the podium during two recent scientific meetings, including the 2022 DDKL5 Forum hosted by the Liver Foundation and the RETS Symposium at the Annual Meeting of the Society for Neuroscience in San Diego, which is concluding today. I will now turn the call over to our Chief Scientific Officer, Dr. Robert Fermot, who will talk to you a little more about the scientific meetings and take us through some of the compelling data that we have generated from our R&D work on our discovery platform, as well as details of the collaboration with the International Red Syndrome Foundation, who advanced VYMT 0126 into a proof of concept clinical trial in Australia. Dr. Pramod?
spk02: Thank you, Jay. I am delighted for the opportunity to share some key recent advances we have made over the past several months that highlight the promise and potential of our human-first CNS drug discovery platform to drive the discovery of therapeutic candidates for CNS genetic disorders. As we have discussed previously, a key element of our strategy is obtaining a deep understanding of human disease biology at the cellular level through the application of innovative enabling technologies to allow us to identify and interrogate target-specific disease biology and drive preventive drug discovery efforts. Our current drug discovery programs are targeting two rare CNS genetic neurodevelopmental disorders, Rett syndrome, and CDKL5 deficiency disorder, and Parkinson's disease, the second most common neurogenic disorder. As you may recall, Rett syndrome is a rare genetic early onset neurodevelopmental disorder resulting in severe mental and physical disability affecting nearly every aspect of a child's life, including their ability to speak, walk, eat, and even breathe easily, cognitive dysfunction, Autistic-like behaviors and seizures are prominent neurological features of the disease. RET is usually recognized in children between 6 to 18 months of age as they begin to miss developmental milestones or lose the abilities they have gained. RET is primarily caused by mutations in a gene called MECP2 on the X chromosome. One of the challenges developing therapeutics for RET has been the lack of a screening system that recapitulates the underlying human disease pathophysiology. Viant Bio has developed an in vitro human RET cortical organoid platform that exhibits abnormal functional neuronal network activity that can be recorded in a high-throughput way, providing a stable foundation for drug screening. We conducted a functional screening of a targeted compound library developed for RET by the International RET Student Foundation called the SMART Library and identified several known inhibitors of acetylcholinesterase and histone deacetylases that rescued the functional RET disease phenotype. We chose to further explore the rescue potential of denepazole, the generic version of Aricept, the FDA-approved compound for treating Alzheimer's disease that we prioritized as a potential repurposing candidate for RET, which we refer to as VYNT0126. We found that denepazole rescued the RET disease phenotype at concentrations that are known to be achieved in the human brain after chronic treatment, correlating with near-complete inhibition of the acetylcholinesterase enzyme. Interestingly, there was strong literature support for cholinergic deficits in RET patients, as well as denepazil-based rescue of electrophysiological or behavioral deficits in a mouse RET model. We were especially intrigued to find that denepazil appears to exhibit distinct methods of action from the most advanced RET clinical development candidates, cofenetide, and glauconazine, also known as Anavex 2-73. These molecules do not rescue the disease phenotype in our reptation-derived organoids. And we think that's because the cell types through which these other compounds work are missing in our steroids. Based on these findings, and with the support and encouragement of the Clinical Trial Committee of the International Rep Center Foundation, I am pleased to announce that on November 14, 2022, we submitted the clinical trial application with the Alfred Hospital Human Research Ethics Committee to conduct a Phase II proof-of-concept clinical trial for denephazil in adult RET patients in Australia. In addition, we received acknowledgment that the FDA accepted our request for a pre-IND meeting to provide their feedback and guidance for our clinical development plan for this program, and they expect to give us our feedback by December 27th of this year. For me, these recent events really represent important milestones for our client bios as we strive to establish the value of a proprietary CNS-directed discovery platform to discover novel therapeutics for CNS genetic diseases that could potentially halt disease progression or perhaps even cure disease. We are also making promising progress on the identification of new chemical entities, or NCEs, for Rett syndrome. In collaboration with our joint venture partner, AtomWise, we have identified small molecules directed against two distinct biological targets that also rescue the Rett phenotype in a differentiated manner and are the basis for our NCD discovery efforts for Rett syndrome. Finally, our ongoing work on CDKL5 deficiency disorder and familial Parkinson's disease has further established that our patient-derived discovery platforms represent a robust model for human-first CNS drug discovery. Viant Bio is honored to participate in the 2022 CDKL5 forum hosted by the Lulu Foundation on November 7th and 8th in Boston, Massachusetts. Matt Green, our senior scientist at our Maple Grove site in Minnesota, presented the results of phenotypic and target-based screening of our proprietary patient-derived phenyl-KL5 organoids. Matt and the team established that phenyl-KL5 organoids exhibit a hyper-excitable functional phenotype that is robust, reproducible, and suitable for high-throughput screening. Matt and the team identified several promising novel drug targets and small molecules that rescue the diseased phenotype. including potential new chemical entity and repurposing candidates. RyanBio is proud to have been formally recognized as a CDKL5 Forum 2022 company making a difference preclinical, an award that was presented by the CEO for the Ludlund Foundation, Majid and Lin Jafar and the Ludlund Foundation at the awards ceremony during the CDKL5 Forum dinner on November 7th, 2022. And finally, our Parkinson's disease program has identified a disease-relevant biomarker in the human-induced platelet-potent stem cell-derived familial model of Parkinson's disease that we're optimizing for conducting a high-throughput drug screening. We are on track to submit an SBIR grant to NINDS on our familial PD work for the January 5, 2023 deadline. Thank you, and I now turn the call back over to Andy.
spk01: Thank you, Bob. Hello, everyone. Thank you again for joining our call. I'll have a brief overview of our financial cash position and other elements that impacted our cash positions in the fourth quarter. First and foremost, we ended the third quarter with $9.4 million of cash on hand. As previously reported, we implemented two new financing vehicles in the first half of 2022, to facilitate the raising of additional equity capital at the company's option with our Lincoln Park equity line of credit, allowing us to access up to $15 million of capital as well as on a $14.5 million at-the-market or ATM offering with Canaccord Genuity. As of September 30, 2022, we have not tapped into these financing facilities. As noted in Jay's and Bob's remarks, we've completed several stated goals over the past several months. Notably, we completed our sale of the Bebo Farm LOC operations based in the United States. We received $5.5 million from the sale, which is expected to net $4.4 million in net proceeds after tax and transaction costs. Further, We expect to incur approximately $600,000 of extra costs related to this transaction. We continue to work on potential transaction partners with our vehicle farm Australian operations during this quarter. Further, we have also signed a clinical research agreement to start our adult clinical trial in Australia in early 2023. We are leveraging infrastructure already in place in Australia to effectively deploy capital for this trial. We also completed a one-for-five reverse stock split in early November to regain compliance with the NASDAQ listing requirements. We issued a separate press release within the last several minutes, noting that earlier today the company received a letter from the NASDAQ Stock Market LLC stating that the company shares of common stock had a closing bid price at or above $1 per share for a minimum of 10 consecutive days. As such, the company's common stock has regained compliance with the minimum bid price requirement of $1 per share for continued listing on the NASDAQ capital market. For the nine-month end of September 30, 2022, we used $10 million of cash to fund operating activities. The company's current cash balance and funding resources are adequate to fund the company's operations until the fourth quarter of 2023. I will close for now and hand the presentation over to Jay Roberts for closing remarks. Jay?
spk03: Thanks, Andy. As we come to the final part of today's call, I'd like to conclude by reiterating our intense focus on meeting key milestones and this year with our programs to further validate our drug discovery platform through the work we're doing in the two rare diseases for RET and CDKL5 deficiency disorder, and the subsequent R&D investments we are making to the identification of novel therapeutics to address these diseases. Stay tuned as we continue to make progress. As news and information becomes available, we'll be communicating updates via press releases, LinkedIn, our Vibe Bio website, and other social media channels. Interested parties are invited to sign up for press release distribution lists. Please visit our website. With that, we will go to the question and answer session, and thank you to everyone who has submitted questions.
spk00: Certainly. Ladies and gentlemen, the floor is now open for questions. If you are listening on webcast, you can submit a question at any time by clicking on the Ask Question button on the left of your screen. Type your question into the box and hit the Sub button to submit your question. If you have dialed in through your phone, please press star 1 on your phone at this time to enter the question queue. 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 while we poll for questions. Your first question is coming from Ed White from HC Rainwright. Your line is live.
spk05: Good evening. Thanks for taking my questions. So perhaps I could start with a question for Andy. You sold the U.S. operations for Aviva Farm. How should we be thinking about any sales to be recorded on the income statement for the fourth quarter of this year? And also, would the sales be generated in 2023?
spk01: Good question, Ed. So the operations related to Aviva Farm have been classified as discontinued operations, so their sales will not end up in our sales line from continuing operations for 2022. We are winding down, as we've noted earlier, our manufacturing operations in Maple Grove to focus solely on our internal R&D revenue, and we would expect the revenues from those operations to be insignificant for the fourth quarter. to pretty much tail off by the end of the fourth quarter.
spk05: Okay. Thanks, Sandy. And perhaps just a couple of questions on the pipeline. So, the protocol for 0126, is there anything for the trial in Australia, is there anything that you can tell us about what you're planning to do, the number of patients? endpoints, anything at all that you could help us with?
spk02: Yeah, so we're planning a trial with 48 patients, a double-blind placebo-controlled trial with 48 patients, and we're going to obviously be measuring adverse events, and the RSPQ, the Rett Syndrome Behavior Questionnaire, will be the primary endpoints, and then we'll also be doing evoke potential and EEG activity as secondary endpoints to try to assess electrophysiological recovery.
spk05: Great. Thanks, Bob.
spk02: And these endpoints have been vetted for us by Jeff Newell on the Clinical Trial Committee at the International Letzman Foundation. Jeff was the lead PI on the Lavender study, which is leading to the NDA submitted for Trinitide. So we think we have designed a clinical trial that meets the highest standards.
spk05: Fantastic. Thank you. And my last question is just on the other potential products in your pipeline. The proprietary RET lead series you had said you would identify it by the end of 2022. I'm just wondering if that's still on track and that it could be IND ready for 2024. And then also the timing of... the CDD and Parkinson's programs. You had previously mentioned CDD could be IND ready in 2024 and Parkinson's in 2025. So is there any update there?
spk02: So with regard to the NCEs for RET, we are on track to identify lead series by scaffolds by the end of the year. We've had a very productive last few months establishing the relevant target engagement assays for the actual novel targets. We've identified compounds from the reference compounds that were able to interact with the target and show disease-specific rescue in our phenotypes, so we've been We have identified compounds that interact with a novel disease-specific target in the CDKL5 surrogate we're working together with Ciclica on, and we're beginning to do basically what we call analog by catalog screening with Ciclica to identify novel scaffolds that can interact with the target and also rescue the phenotype. And we've also identified 22 novel targets and hits from a high-throughput screen that we did that showed disease-specific rescue, which we're now vetting. So I think realistically, we expect to have identified molecules that have a potential to begin lead optimization in the early part of Q1 of next year. With regard to Parkinson's disease, we have just received the isogenic cell lines for our familial target that we're beginning to To validate now and generate organoid platforms, we've been able to show disease-specific reductions in dopamine content and pH neuron levels in organoids prepared from those familial lines. But we haven't initiated yet high-throughput screening.
spk04: Is that helpful? Jeff, do you want to follow up on that at all?
spk05: No, that's helpful. Thank you very much. Those are all the questions that I have.
spk04: Thank you very much, Jeff.
spk00: Thank you. Your next question is coming from Lucas Ward from Ascendient Capital. Your line is live.
spk06: Good afternoon, guys. Thanks a lot for the update. I have a couple questions on the financial front. The first is it looks like you had almost a million dollars sequential savings in SG&A from Q2 to Q3. Could you shed some light on that and also just give us an idea if that's like this this level of $1.6 million is more of an indicative level of what you'll be spending going forward.
spk03: Okay, Andy, go ahead. No, go ahead, Jay. No, I was just going to say, so obviously the company has continued to find ways to reduce, particularly with a real eye toward our G&A costs. And so I think a majority of that is going to be related to the continued focus of moving away from our services business and moving, you know, more toward our R&D efforts. And, you know, with that, we can, obviously, we can operate at a lower G&A cost. We've got, you know, solid material people. And we have, you know, we've got, you know, other related costs associated with things like travel and so on that's been reduced. I think that's where you're going to see most of the savings. And you can, you know, certainly jump in from there to
spk01: Actually, you did a wonderful job of answering my question, Jay. You're spot on. So in terms of answering the question, in terms of ongoing exchange expense, you know, we do see right around that $6 to $6.5 million annual run rate as being indicative of that run rate, of which, you know, probably around a million to a million and two of that is related to stock-based compensations.
spk04: All right.
spk06: And then sort of a related question on R&D. Obviously, that went up a little bit. Is that on an upward trend or are we at a good level?
spk01: Yeah. Yeah. Taking back to my remarks, we have signed the agreement in Australia with the CRO to commence the trial that Bob talked about. And so we do expect there to be some uptick in R&D spend later in the fourth quarter and into 2023. Yeah. as we work through the clinical trial process. So you should expect there to be incremental R&D spend in 2023 as compared to 2022.
spk04: Okay. All right.
spk06: If I could just ask a follow-up to you on the trial, like how much is that going to cost and what sort of burden will it put on the company? Like you mentioned that you would be leveraging assets that were already in place. Could you please elaborate on that?
spk01: Yeah, a couple of things I can comment on that. First of all, in our 10Q, we disclosed that the CRO contract is about $4 million. We do have a structure in place in Australia associated with our renewable farm business to actually use that entity as the – sponsor of that clinical trial. So we do plan to not only take advantage of the current Aussie dollar, U.S. dollar arbitrage, but we also plan to use the R&D tax rebate in Australia to refund some of that clinical trial costs.
spk04: Okay. Is
spk06: Is Vivo Farm Australia, has that also been sold off or is that still part of Viant?
spk01: Yeah, that's a great question. So there's two entities in Australia. One is this parent company, which we plan to retain. This is one in which it has the benefit of the R&D tax rebate structure in place that we can use. And then the subsidiary company, which is the operating company there, is still for sale. And we are in the process of talking through an arrangement with a party related to selling that so that it will continue to work our way through in the next couple of months. We're hoping to have it done by the end of the year.
spk04: Okay, great. That's all I have. Really appreciate it. Thank you very much, Lucas.
spk00: Thank you. That concludes our Q&A session. I will now hand the conference back to Jay Roberts for closing remarks. Please go ahead.
spk03: Thank you, Robert, and thank you, everybody, for participating in today's call. We're very happy with our progress so far. We look forward to keeping everyone informed of our progress along the way. Thanks again for joining the call today. Stay safe and well.
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