Beyond Air, Inc.

Greetings, and welcome to Beyond Air, Inc. Second Quarter 2021 Earnings and Corporate Update Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press Store 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Maria Jankowski, Head of Investor Relations for Beyond Air. Thank you. You may begin.

Thank you, Operator, and good afternoon, everyone. Welcome to Beyond Air's second quarter of fiscal year 2021 earnings call. Speaking on today's call are Steve Lisi, our Chairman of the Board and Chief Executive Officer, and Douglas Beck, our Chief Financial Officer. This morning, we issued a press release announcing the submission of the PMA for one-foot pH to treat persistent pulmonary hypertension of the newborn, or PPHN. In addition, after the close, we issued a press release announcing the financial results for the second quarter of fiscal year 2021. A copy of both releases can be found on the Investor Relations page of our website. Before we begin, I would like to remind everyone that comments and various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. Beyond Air encourages you to review the company's filings with the Securities and Exchange Commission, including without limitation the company's Form 10-K, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statement. As a reminder, this conference call is being recorded. Furthermore, the contents of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 11th, 2020. Beyond Air undertakes no obligations to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I would like now to turn over the call to Steve Lisi, our Chief Executive Officer. Steve?

Thanks, Maria. Good afternoon, everyone. Thank you for joining our call. Before we get started, I wanted to extend a huge thank you and congratulations to every member of the Beyond Air team for the submission of the PMA for LungFit PH to treat persistent pulmonary hypertension of the newborn, or PPHN. Despite the difficulties imposed by the ongoing pandemic, our team was able to execute on this critical step, keeping us on track for a U.S. commercial launch in the second calendar quarter of 2021, pending FDA approval. As a reminder, LungFit PH is the lead product from our broader LungFit platform. It is a novel cylinder-free device that is capable of generating nitric oxide, or NO, from ambient air that flows through a reaction chamber where pulses of electrical discharge are created between two electrodes, simulating a lightning strike. The desired concentration of NO is achieved by controlling the voltage and duration of each electrical pulse giving us the capability to titrate dose on demand or maintain a constant dose for treatment. For PPHN, LungFit pH is designed to deliver a dosage that is consistent with current approved guidelines of 20 parts per million NO with a range of 0.5 to 80 parts per million. Since nitrogen dioxide, or NO2, is a toxic byproduct of NO generation, our proprietary NO2 filters provide encrypted with RFID chips are required to be securely put in place for the device to generate and safely deliver NO. Our smart filters serve as the razor in our Razor razor blade model. Overall, the LungFit pH is a much smaller and lighter alternative to the traditional fixed supply cylinder based systems. It is important to note that our system operates with any standard electrical outlet. We believe that the removal of the cylinder makes it a more cost-effective, convenient, and safe alternative for patients and medical staff. I would like to now pivot slightly and discuss our initial target indication. PPHM is a serious breathing condition that occurs at birth when a newborn's circulatory system is unable to adapt to breathing outside the womb. The newborn's lung vessels or blood vessels are so constricted that oxygen and blood flow are restricted and manual ventilation is required. Since FDA approval in 1999, NO has been the standard of care for PPHN in the U.S., acting as a pulmonary vasovialator to improve oxygenation and reduce the need for ventilation. We estimate there are a little over 850 Level 3 and Level 4 neonatal intensive care units, or NICUs, that are equipped for NO delivery to treat PPHN today. According to published reports, the use of NO in the hospital setting had sales of greater than $500 million in 2019 in the United States alone. Additionally, NO has been approved for PPHN in Europe since 2001, with a subsequent payable expansion for use in certain cardiovascular surgeries. More recently, NO received regulatory approval in Australia and Japan for pulmonary hypertension in conjunction with heart surgery, further expanding NO use to the worldwide cardiac market. From a commercial perspective in the U.S., cylinder systems have dominated for the past 20 years, dominated by one company until new players recently entered the market. These new players have the same, if not more, disadvantages when compared to our long-fit pH. As I mentioned before, we believe that our novel technology has many advantages over the current standard. First of all, our ability to generate NO from ambient air eliminates the space requirements and NO volume limitations of cylinders. In today's environment, the hospitals are left to shoulder the burden, as each cylinder can weigh up to 45 pounds and require special storage. Instead, our system relies on safely disposable smart filters that weigh approximately 2.5 ounces and last for 12 hours of continuous use. To be clear, our systems will not work without a filter in place, confirmed by the RFID technology, preventing both NO2 toxicity while protecting our business model. Additionally, our smart filter design ensures that hospitals are only charged for what they use, which is an advantage over some of our competitors that employ more aggressive pricing strategies. From a manufacturing perspective, our fixed costs are significantly lower than our competitors because we do not have any expenses associated with manufacturing, logistics, and transport of NO cylinders. Finally, our user interface is designed to be easy to use for providers, and we also avoid purging procedures with which both reduce training burden. Overall, operating economics and safety are vastly improved for the hospital. If approved after the 180-day FDA review period, the Beyond UF team will be ready for a U.S. commercial launch in the second quarter of 2021. We will discuss our commercial plan in greater detail as we approach this next milestone. Commercial launches outside of the U.S. are dependent on our ongoing partnering discussions and approval timelines in each jurisdiction. Moving on to acute viral pneumonia and COVID-19, we see a significant opportunity to use our novel LungFit platform technology to target acute viral pneumonia, including infections caused by SARS-CoV-2. LungFit Pro is a direct delivery, non-ventilated compatible system for use by an appropriate medical professional. It is designed to deliver NO at a concentration of 150 parts per million for 40 minutes, four times per day, which can be easily adjusted for other indications. LungFit Pro was previously referred to as LungFit Bro, named after our bronchiolitis program. It has since been renamed because this device is applicable to many indications in a hospital setting. Nitric oxide is well understood to have an inhibitory effect on many viral infections. Beyond Air and the broader scientific community have published data that show nitric oxide's ability to inhibit the replication cycle of coronaviruses, including severe acute respiratory syndrome, otherwise known as SARS-CoV-2. In fact, in October, we presented our new positive in vitro data at the CHEST Annual Meeting 2020 that show anti-coronavirus properties against OC43 human coronavirus when administered either prior to or post-infection at 150 to 250 parts per million nitric oxide. We believe these data suggest that the LungFit Pro system may be effective for both prevention and treatment of human coronavirus infection at the 150 ppm dose. I'd like to provide an update on our clinical program in this indication. We have previously announced that we received approval from the FDA to run a study in COVID-19 patients using our Lungfoot system at 80 parts per million. We've also received approval from Health Canada to run a similar study to the one approved by the FDA. The results from these studies, along with other data, has enabled us to receive approval from the Israeli Ministry of Health to perform a clinical study at 150 parts per million for the treatment of acute paralimonia, including COVID-19. The study is a multicenter, open-label, randomized clinical trial targeting approximately 90 adult patients with an emphasis on patients infected with SARS-CoV-2. The enrolled patients will be randomized in a one-to-one ratio to receive inhalations of 150 parts per million nitric oxide given intermittently for 40 minutes four times per day for up to seven days in addition to standard supportive treatment or standard supportive treatment alone. Endpoints related to safety, oxygen saturation, fever, and ICU admission, among others, will be assessed. This is currently the only active trial that our company is performing in the acute viral pneumonia or COVID-19 setting. We expect to begin screening patients shortly. We anticipate results to be available around mid-year 2021 and will continue to provide updates as needed. Sticking with LungFit Pro, I would like to provide a quick update on our bronchiolitis program. We recently presented data at the CHEST annual meeting from our bronchiolitis pilot study, which was a prospective, multicenter, double-blind, randomized study that included 87 hospitalized infants. Patients treated with 150 parts per million MO in addition to standard supportive therapy had a statistically significant shortening in time to fit to discharge, the primary endpoint of the study, than patients who received 85 parts per million in addition to standard supportive therapy or standard supportive therapy alone. We found no statistical difference between the lower dose of 85 parts per million NO and control. Importantly, on the key secondary endpoint of hospital length of stay, the 150 parts per million arm was also statistically significant compared to both the 85 ppm and control arms. All treatments had similar safety profiles and were well tolerated with no serious adverse events associated with nitric oxide therapy. We look forward to publishing these data just as the previous two pilot studies have been published. This is our third consecutive successful study in infants hospitalized with viral lung infections, and along with the previous two studies, provide the evidence we need to move forward with a definitive study to establish the efficacy and safety of nitric oxide generated and delivered by our LungFit Pro. The pivotal study for bronchiolitis was delayed due to COVID-19. We are planning on starting a pivotal bronchiolitis study in the fourth quarter of 2021, pandemic permitting. Please note that bronchiolitis is seasonal. I will now provide updates for our LungFit Go, which was previously named LungFit Home. LungFit Go is a non-ventilator-compatible system being developed for home use in non-tuberculous mycobacterial lung infections, or NTM. The Go is similar to the Pro, with reduced functionality, significantly reducing potential user error. For our LungFit Go program, we are aiming to initiate a single-arm, multi-center, 12-week, self-administered, at-home, pilot study in 20 patients with NTM lung infection. We have had delays due to the pandemic, but are expecting to begin screening patients in December of this year. We are focused on enrolling refractory NTM patients infected with either mycobacterium avium complex or MAC or mycobacterium abscessus. Patients will be titrated up to 250 parts per million NO in the hospital over several days and then sent home to complete the 12-week treatment period. The first two weeks will see 40-minute administrations four times per day, and the remaining 10 weeks will be twice per day. The study will evaluate safety, quality of life, physical function, and bacterial load. The FDA has emphasized the importance of quality of life improvement and physical function, as well as improved safety profile as markers of success versus solely eradication of the bacteria. Based on our current expectations, we expect to report interim data from the at-home study towards the middle of 2021 and final results toward the end of 2021. We recently published data from a compassionate use study performed at the National Institute of Health, or NIH, using our LungFit system. The 24-year-old female cystic fibrosis patient with chronic and progressive pulmonary mycobacterium-obsessive disease was treated with 160 parts per million nitric oxide for three weeks and then subsequently treated with 160 parts per million titrate at 240 parts per million NO five months later. Over the course of the follow-up period after the first course of treatment that included 160 ppm inhaled NO, the patient had improved respiratory symptoms and quality of life and was able to lead a more active life. The second course of therapy was requested by the patient. This course of treatment at 240 parts per million nitric oxide was stopped on the eighth day for reasons unrelated to nitric oxide therapy. These results demonstrate the potential clinical benefits of NO in the treatment of this patient population and we look forward to initiating the 12-week pilot study next month. As a reminder, our system is very easy to use, thus our enthusiasm for a successful outcome in the at-home study. I will walk you through the four-step process for administration. Turn on the power switch, insert the smart filter into the system, place the breathing mask on the face, and press the start button. With a successful study, we believe our LungFit Go system opens the door to a very significant underserved market for chronic severe lung infections that can be treated in the home. Last but not least, we come to our solid tumor program. This program has generated exciting preclinical data demonstrating nitric oxide's ability to elicit an anti-tumor systemic immune response when high concentration gaseous NO or GNO is administered directly to solid tumors. Our hypothesis is that GNO at extremely high concentrations, greater than 10,000 parts per million, and even up to 200,000 parts per million, will cause local cell death when injected into solid tumors, thus exposing tumor antigens to the immune system. This exposure may result in a memory immune response that will recognize and attack subsequent primary tumor regrowth as well as distal metastases for the same type of tumor, creating a type of in-situ cancer vaccination. This program is early in development and will not use our LungFit platform due to the ultra-high concentrations of NL. We have developed a novel delivery device, which we will discuss at a later date. We are extremely excited by this program, especially since the checkpoint inhibitor market alone sold for $23 billion in revenue in 2019 and is still growing. We have presented our preclinical data at three different major conferences this year, including the American Association for Cancer Research, or AACR, conference in June, the NACLC for lung cancer, as well as the AACR subsection conference on tumor immunology and immunotherapy this past October. Given our goal of systemic anti-tumor immunity, we used a tumor challenge model to test this hypothesis in mice. Simply put, we treated tumor-bearing mice with a single treatment of high-concentration GNO intratumorally with the intent to cause tumor cell death, not complete tumor ablation. After initial treatment, the remaining primary tumor was surgically removed. A challenged tumor with the same cancer cells as the initial primary tumor was introduced on the opposite side of the body. The percentage of tumor take or tumor reload was monitored as well as survival. There were control arms for comparison. In our largest study to date, colon tumor-bearing mice received either 20,000 or 50,000 parts per million GNO. There were 11 mice per arm. Treatment was for five minutes for a single treatment. And then the mice were inoculated with a challenge tumor 21 days later. At day 45, post-challenge tumor inoculation, 0% of the colon tumor-bearing mice treated with 50,000 parts per million were observed with a challenged tumor versus 100% of naive mice and 27% of 20,000 parts per million mice. So again, 0% for 50,000 PPMR, 27% for the 20,000 PPMR, and 100% of the naive mice had tumor growth. Similarly designed trials in breast tumor-bearing mice and lung tumor-bearing mice with smaller numbers of mice showed similar trends. To date, we have not observed any safety issues with these experimental models. The possibility of treating solid tumors and potentially treating and preventing metastases may be truly groundbreaking. To our knowledge, ours is the first and only program testing the concept of injecting high-concentration NO gas into solid tumors. Solid tumors and their metastases are responsible for approximately 90% of all cancer-related deaths, and we are humbled by the huge unmet need for these patients. With that, I will now turn the call over to Doug for the financial review.