Dogwood Therapeutics Q3 2023 Earnings Call Transcript

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November 13, 2023

There are 5 speakers on the call.

Operator

Day, and welcome to the Verios Therapeutics Inc. 3rd Quarter 2023 Earnings Update. At this time, all participants have been placed on a listen only mode. Please be advised that today's call is being recorded at the company's request. At this time, I'd like to turn the call over to Angela Walsh, Senior Vice President, Finance and Treasurer for Verios Therapeutics.

Operator

Please proceed, Angela.

Speaker 1

Thank you. Good morning, everyone, and thank you for joining us on today's conference call. We are pleased to be with you today to discuss Verios Therapeutics' 3rd quarter financial results and to give you a corporate update. Please note that our financial results press release is now available on our website. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially from the information expressed or implied by these forward looking statements.

Speaker 1

For more information regarding such risks and uncertainties, please see the risk factors outlined in the company's filings with the SEC. Any forward looking statements are made only as of today, and we disclaim any obligation to update these forward looking statements other than as required by law. Please see the forward looking statements section in our financial results press release issued this morning for more information. Now it is my pleasure to turn the over to our CEO, Greg Duncan. Greg?

Speaker 2

Thank you very much, Angela, and good morning, everybody, and thank you for joining today's Quarter 3, 2023 earnings update. We'll be going through several slides over the course of the next 15 or 20 minutes, and then we'll open it up to questions and answer. Please go to slide 2, please. I'll note during the course of today's presentation, we'll be making several forward looking statements That is subject to risks and uncertainties. You should read the documents that we have filed with the SEC for more complete information about Vireos.

Speaker 2

Next slide please. The first thing I'd like to mention relative to the past quarter is One of our absolutely key achievements and that is securing FDA guidance and agreement on our plan to progress IMC1 to Phase 3 development As a potential treatment for patients with fibromyalgia. As you may recall, the Phase 2b study clearly identified The patients that are most likely to respond to IMC1 therapy and as such will be enriching the Phase 3 program to target new to fibromyalgia research patients only. That said, these patients represent the vast majority of the opportunity in the U. S.

Speaker 2

Territory. The proposed Phase 3 program is comprised We'll start off with the pharmacokinetic and food effects study as a precursor to the 301, 302 and 309 studies. This pharmacokinetic and food effects study will be focused on the dose formulation we'll be using to commercialize IMC1 presuming success in Phase 3. The second key component of the program is the 301 study. This is a head to head study Comparing IMC1 to placebo with patients randomized 1 to 1 in groups of 160 for a total of 320 patients treated over 12 weeks.

Speaker 2

The primary endpoint for this study will be the same endpoint we used in the Phase 2a, the Phase 2b and is consistent with the endpoint required by FDA to gain approval for new fibromyalgia treatment. The 2nd program we'll be affecting will be the 302 study. This is a multifactorial trial. This is comparing IMC1 of placebo again, but in this study we'll be adding any independent components of tamsiklobir reference drug And Cellcoxib reference drug. These patients will be randomized into 1 of the 4 groups, again targeting 160 per group for a total of 640 patients in this multifactorial trial.

Speaker 2

Very consistent with the 301 study, the primary endpoint in this trial is reduction in pain, again, using the key endpoint These will be patients treated for up to 1 year, effectively the requirements we've agreed with FDA are 300 patients will Be treated in the 309 study for 6 months and a total of 100 or more will be treated at 1 year. Data from the 301, 302309 study will be rolled into the NDA or New Drug Application that will be submitted to the FDA at the end of the Phase 3 program. Or IND as it's called for IMC2 as a treatment for long COVID. IMC2 is a little different than IMC1. It compares contains valsiclidir and celecoxib, whereas IMC1 is famcyclidine celecoxib.

Speaker 2

This is a very exciting program. Recent Center For Disease Control prevalence estimates suggest somewhere between 7.5% and upwards of 41% of patients non hospitalized Adults who have COVID who want to develop long COVID sequelae or symptoms. There is very significant disability associated with long COVID. In fact, a study in Australia in 2021 2022 found that 74% Of total disability associated with SARS CoV-two or the COVID virus is actually attributed to long COVID. So effectively, 3 quarters of all of the disability in this patient cohort is due to long COVID, whereas only a quarter of it It was due to the acute infection, highlighting the very significant morbidity associated with this particular illness.

Speaker 2

I will tell you there are no Treatments presently approved by the FDA to treat long COVID sequelae. Our goal for this IND submission is to identify with the FDA's Alignment, the regulatory requirements for this potential first in class medicine. We have filed new provisional method of use intellectual Property protection associated with this particular combination, which if granted, provides coverage to at least 2,043 before extensions. We'll provide feedback on this potential first in class research opportunity in what we project is the next 4 to 8 weeks. What makes this program so exciting?

Speaker 2

If we can transition to the next slide, to Slide number 5, you'll note that the RECOVER Mechanistic Pathways Test Force has identified activation of secondary viruses as a potential cause for long COVID sequelae. Just to back up a second, you may know that the RECOVER initiative was created to address a widespread and very diverse impacts of both COVID and long COVID. This work is done under the umbrella of the National Institute of Health and one of the working groups Within this broader RECOVER initiative is the RECOVER Mechanistic Pathways Task Force. They are really looking for what is The ideology or the catalyst for developing both COVID and long COVID. COVID acute infection, they have determined, activates a very significant immune response, Because of the debilitated nature of the immune response can lead to reactivation of latent herpes viruses.

Speaker 2

Recall, Latent herpes viruses and the activation of those viruses are the target of both IMC1 and IMC2. Latent viral reactivation can lead to further dysregulation of the immune system, very significant inflammation and the development of long COVID symptoms. Importantly, for our purposes, COVID patients exhibit significant Epstein Barr reactivation As compared to non COVID patients, why is that important? Not everybody knows, but we're here to tell you, Epstein Barr is actually a herpes virus And it is a target specifically of valcycliter. And that is very important because data generated by the Bateman Horne Center Actually identify this as a potential cause of long COVID sequelae.

Speaker 2

If we can go to the next slide, please, Slide number 6, you'll see data that were generated by an unrestricted investigational grant to the Bateman Horne Center. Doctor. Bateman requested a grant to assess the potential combination of valsaprevir and celecoxib as a treatment for long COVID sequelae. In this open label, exploratory long COVID trial, we compared patients that were treated with valsiclovir And those who are controlled patients, these were patients matched for gender, age and in particular, the level of fatigue that they were exhibiting as a result of their long COVID and assess those patients after 14 weeks of treatment. As you can see, from each one of the rows demonstrated on the table on Page 6, The val celecoxib treatment group delivered very statistically significant improvements in a whole host of different disease sequelae.

Speaker 2

Specifically, the primary endpoint, the NIH PROMISE fatigue score, this is a validated instrument generated through NIH, So it's statistically significant reductions in fatigue at a p value of 0.008, highly statistically and clinically relevant. The several other assessments in this study pain, patient's global impression of change, which is an overall health status And then measures of orthostatic intolerance and both depression and anxiety were also assessed. And if you take a look at the P values for Every one of those particular disease sequelae, we see highly statistically and clinically relevant improvement for those patients treated with VAL selacoxib combination versus Ozematch controls. In fact, every one of these measures is statistically significant, including anxiety, including orthostatic intolerance, With the exception of depression, this particular assessment was only statistically significant in the 0.059 level. So we think This was moving in the direction of significance and a larger sample size may be able to ferret out a very statistically significant impact with a larger sample size.

Speaker 2

These data are particularly compelling because first, valsiclovir and celecoxib in combination were generally very well tolerated. There were no serious adverse events in this particular trial and the most common adverse events in both the routine care group and in the valsiclibarrelacocic group were Headaches and muscle pain. We're particularly encouraged by these data because these patients on average in both the treatment and matched control group Had long COVID for a period of 2 years. This is particularly important because this is not something that just popped up And then was treated with this particular combination. These patients were suffering the morbidity, the mortality, not going to work, not getting out of bed in the morning for a 2 year period.

Speaker 2

So this is a very significant illness that's responding quite well in this open label exploratory trial. We're really excited because moving forward, we're going to test the thesis again. In fact, Doctor. Bateman requested a second investigational Grant and investigator initiated unrestricted grant to expand the research program in this particular area. And in the second trial we are funding through this investigator initiated grant, Doctor.

Speaker 2

Bateman and her team will be targeting 60 patients in 3 cohorts, Two doses of the valacellacoxib combination and placebo. These patients will be assessed over the course of 12 weeks With consistent measures for assessing both fatigue, orthostatic intolerance, etcetera, And we believe the results from this trial will help guide our planning assumptions, things like the IMC treatment effect size, what's the overall sample size required in the next stage of development For our planned Phase 2b trial, assuming we reach alignment with FDA on the requirements for the investigational new drug application. We're very excited about this potential opportunity and look forward to those results sometime in the middle of 2024. And the final key topic I'd like to update you on before we turn to financial highlights for the quarter is the idea of partnerships. Next slide, please.

Speaker 2

As you can see on Slide number 8, we are actively exploring as we've communicated partnership for both IMC1 for fibromyalgia as well as IMC2 for long COVID. Updates on long COVID will likely follow feedback from the FDA. In addition, we wanted to make it clear that we're also assessing Opportunities in the pain and anti infective space and or unique opportunities that can create value under Veri's expert research and development leadership as compliments to IMC1 and IMC2. As you probably know, but just for the sake of reiterating, partnership discussions include a very thorough review of the fibromyalgia Phase 2b data, timing and details for the proposed Phase 3 program and deep analysis of the commercial opportunity. All of these things take time.

Speaker 2

We will report material progress on any proposed partnership in a very timely manner. With that background relative to operational highlights, me turn it over to our Senior Vice President of Finance, Angela Walsh, once again to summarize our quarter 3 financial highlights. Angela?

Speaker 1

Thank you, Greg. Please proceed to the next slide. First of all, we would like to express that due to our prudent management of cash, We have the capital to fund operations into the Q3 of 2024. We operate a virtual model with less than 4 full time equivalents. As you can see on Slide 8, there were no sales for the 3 months ended September 30, 2023 or during the year ago quarter.

Speaker 1

We reported research and development expenses of $400,000 for the Q3 of 2023 as compared to $1,600,000 for the Q3 of 2022. The $1,200,000 decrease was primarily due to a decrease And clinical trial expenses of $1,100,000 associated with our FORTEST study in Q3 of 2022 And a decrease in drug development and manufacturing costs of $100,000 In addition, we reported general and administrative expenses of $900,000 for the Q3 of 2023 as compared to $1,000,000 for the Q3 of 2022. The $100,000 decrease quarter over quarter was attributable to a decrease in expenses associated with being a public company. Finally, we reported a net loss of $1,200,000 for the Q3 of 2023 as compared to a net loss of $2,600,000 for the year ago quarter. The lower net loss was 2023, we had $4,800,000 in cash as compared to $7,000,000 as of December 31, 2022.

Speaker 1

As I just mentioned, we expect this cash to fund operations into the Q3 of 2024. At this time, I will turn the call back over to Greg, who will moderate the Q and A session of the call. Greg?

Speaker 2

Thank you very much, Angela. And maybe just to progress to Slide number 9. To summarize the key highlights from quarter 3 before we open it up to questions and answers. As we mentioned, we have secured FDA guidance and agreement to our proposed plan for IMC1 in Phase 3 development where we're enriching for patients new to fibromyalgia We have submitted briefing materials to the Food and Drug Administration for our submission of a potential new drug application or IND for IMC2 As a treatment for long COVID and look forward to the results from the second study at the Bateman Horne Center, which are due out in the early part of 2024 We're actively exploring partnership opportunities on 3 levels, iMC1 for fibromyalgia, IMC2 for long COVID and then any complementary therapeutic interventions to continue to build shareholder value as complements to both IMC1 and IMC2. And as Angela just reviewed, through continued prudent expense management running a virtual model, the company expects to have capital to support operations into Q3 of With that background, let's move towards a question and answer session.

Speaker 2

I will turn it back to the operator, Matthew,

Operator

Your first question is coming from David Bautz from Zacks Small Cap Research. Your line is live.

Speaker 3

Hey, good morning, everyone. So, Greg, first of all, about the Phase 3 program in fibro.

Speaker 2

Thank you, David, and good morning, and I appreciate you joining. So it's pretty standard protocol to do a combination study From FDA guidelines to secure regulatory approval under the 505(2) pathway. What is unique here is that we will be doing 1 multifactorial study, but we were able to negotiate a second study, which is just the head to head study of IMC1 versus placebo. So we thought that was a very good outcome because it wasn't 2 multifactorial studies, but specifically, This was one multifactorial plus the head to head. So a little bit more efficient way to get to potential approval, presuming success clinically.

Speaker 3

Okay. Now if IMC1 does not beat either arm In that study, does the FDA view that as a failed trial then?

Speaker 2

So we don't believe we need to show statistical significance versus is focused on is effectively showing the contribution of both components. As you are well aware, I'm sure David, selacoxib Actually is used for pain and things like osteoarthritis. And so what they're looking to assess is what is the relative contribution of both components As we roll up to a combination therapy versus placebo as the primary endpoint. So the data will dictate that Obviously, over time, if there's not a lot of separation between IMC1 and the independent components, I don't think that would be viewed favorably. But we do believe if we show statistical significance And we see replication of data that has been generated prior to our research showing NSAIDs don't really move the needle on fibromyalgia, Antivirals independently don't really move the needle on fibromyalgia.

Speaker 2

We have a very good chance of success moving forward.

Speaker 3

Okay. So you talked about partnership opportunities this morning. And I guess, is the company prepared to move ahead with The Phase 3 program in fibro on their own or are you going to have to partner that to initiate that program?

Speaker 2

Yes. We're looking at both options, But we do think partnership offers us the opportunity to scale less capital. And then probably Needless to say, but I'll articulate it, if you can find the right partner with an interest that already has commercial operations, you obviate the need for scaling capital in the future To fund the commercialization of the asset. So we think that's probably the most efficient way to progress. And that is the primary way we think is the best way, if you will, to move forward.

Speaker 2

But obviously, if we do not secure a partnership, then we will consider scaling the capital to do this as an independent entity. But that is a secondary objective.

Speaker 3

All right. And then, lastly about the long COVID program. So I missed the size of the study that the Bateman Center is going to be running, for the second study. Could you go over that again?

Speaker 2

Sure. The Bateman Horne Center in the 2nd investigator initiated grant run Via the Bateman Home Center, so they are in control and conducting the study, recruiting, etcetera, is targeting roughly 60 patients, 20 per arm, Two doses of vosiclofir and celecoxib combination and a placebo line. That is the rough draft of the study.

Operator

Your next question is coming

Speaker 4

I just had a question on the long COVID plan. Would you be initiating a company Sponsored study anytime soon on that and would you be testing additional doses and regimens in that study? Thanks.

Speaker 2

Sure. And good morning, Sean. Thank you for joining. The plan will be to secure FDA guidance. As I mentioned during the course of today's presentation, We have developed a briefing book, as you probably know, Sean, but just for the edification of others, when you're opening up an IND, you questions to the FDA.

Speaker 2

You get their feedback about things like what's the primary endpoint. We think fatigue, for example, should be the primary endpoint. It's the most dominant symptom in long COVID. What are the sample sizes, etcetera, required to advanced development? And we should get feedback sometime In the next 4 to 8 weeks, we hope to have it in 2023, but there's not a timeline per se on getting specific alignment with FDA here.

Speaker 2

So that could lead into the very early part of 2024. Once we have those requirements in hand, We will do 2 things. 1 is begin planning the proposed Phase 2b study. And secondarily, we will open up The partnership discussions on a more fulsome basis because now we know what the target is moving forward, presuming again alignment with FDA on the Next steps of regulatory pathways, shall we speak, endpoints, duration, etcetera. And then we will likely use The outputs, the treatment effect size, the sample size, etcetera, that will be generated by the BHC study That is ongoing, which we expect to read out sometime in early 2024 as the basis for Finalizing the study design for the next Phase IIb study in long COVID.

Speaker 2

Does that answer your question, John?

Speaker 4

Yes, that's very helpful. Thank you.

Speaker 2

Of course.

Operator

Thank you. That concludes our Q and A session. I'll now hand the conference back to Greg Duncan for closing remarks. Please go ahead.

Speaker 2

Thank you very much, Matthew. Hopefully, you get a sense that these are very exciting times for Vireo Therapeutics. We're on the cusp of progressing 2 very novel programs, IMC1 for fibromyalgia and IMC2 for long COVID. These are 2 very novel, potentially game changing new therapies to advance care for patients suffering the debilitating effects of both fibromyalgia and long COVID. And we really think with continued success, we have some very exciting value appreciation for various stockholders.

Speaker 2

We, as we always do, will commit to very timely update on progress on both research, regulatory and the partnership front as we progress through the balance of 2023 and into early 2024. We thank you for attending today's call.

Operator

Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

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Earnings Conference Call
Dogwood Therapeutics Q3 2023
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