Theriva Biologics Q3 2023 Earnings Call Transcript

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November 13, 2023

There are 5 speakers on the call.

Operator

Greetings, and welcome to the Zareba Biologics Inc. 2023 Third Quarter Operational Highlights and Financial Results. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

Operator

It is now my pleasure to introduce your host, Steve Shallcross. Thank you. You may begin.

Speaker 1

Thank you, Irene, and good morning, everyone, and thank you for joining our call today. Welcome to Thrivo Biologics' quarter 2023 investor conference call. Joining me on today's call will be Doctor. Manoch Skou, Director General of Theriva Biologics European subsidiary and Doctor. Vince Wacher, Head of Corporate and Product Development of Theriva Biologics.

Speaker 1

Dereva Biologics issued a press release this morning, which provided operational highlights and included the financial results for the Q3 ended September 30, 2023. The press release can be found in the Investors section of the company website at www.arivabio.com together with the quarterly report on Form 10 Q for the quarter ended September 30, 2023, which we plan to file today with the Securities and Exchange Commission. In addition to the phone line, this call is being streamed live via webcast, which will be archived on the company's website, www.trivabio.com for 90 days. During this call, certain forward looking statements regarding 3va Biologics and VCN Biosciences' current expectations and projections about future events will be made. Generally, the forward looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions.

Speaker 1

These statements are based upon current beliefs, expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in 3 of Biologics' filings with the SEC, many of which are difficult to predict. No forward looking statements can be guaranteed and actual results may differ materially from such statements. The information on this call is provided only as of the date of this Call, ANTHREEVA Biologic undertakes no obligation to update any forward looking statements contained on this conference call on account of new With that, I'd like to start by discussing our progress during the quarter. In the Q3 of 2023, we continue to make steady progress to drive forward our oncology focused portfolio Designed to address unmet needs for difficult to treat cancers. With our extended cash runway into the first Quarter of 2025, we believe we're well positioned to execute on our corporate objectives and remain on track to achieving multiple value enhancing milestones.

Speaker 1

Our primary efforts and resources are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate VCN-one. As a reminder, VCN-one is a systemically administered oncolytic adenovirus designed to selectively replicate within the tumor, Degreed the tumor matrix and increased tumor immunogenicity. We believe these Modes of action position VCN-one for optimized tumor killing across several indications and in combination with different types of therapies. The potential use of VCSEL1 to enable and enhance the use of chemotherapy and immune oncology products and otherwise refractory solid is a strategic focus for Treva that may provide multiple opportunities in areas of high therapeutic need. Today, I'm pleased to report recent highlights from our ongoing programs evaluating VCN-one in different indications in combination with chemotherapy, immune checkpoint inhibitors and CAR T cells.

Speaker 1

Building on our exploration The potentially broad synergistic clinical benefit of VCN-one, we are pursuing new oncolytic virus candidates to leverage Our novel albumin shield technology, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate repeated administration of oncolytic virus therapies. This may enable our pipeline programs to be used in standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy. Additionally, As part of our oncology focused portfolio, we continue to screen and enroll patients in the 2nd cohort of the Phase 1b2a trial of SYN-four designed to prevent potentially fatal adverse outcomes in patients who undergo allogeneic With this brief introduction, I will now provide further details on how these programs continue to position Thuriva at the forefront of oncolytic virus development, Starting with our lead program, VCN-one. Our confidence in VCN-one is built on a strong Clinical foundation is VCN-one has been administered to more than 100 patients across diverse indications, including Pancreatic ductal adenocarcinoma or PDAC, head and neck squamous cell carcinoma, colorectal cancer, ovarian cancer and retinoblastoma. VCN-one has been granted orphan drug designation in the U.

Speaker 1

S. And Europe for the treatment of pancreatic cancer and in the U. S. For retinal Our most advanced program for BCN-one is in PDAC, which has one of the lowest survival rates among all cancers and is an indication that is ripe for innovation. It is well established that the PDAC tumor matrix is one of the key reasons for the overall poor therapeutic outcomes for these patients.

Speaker 1

We believe VCN-one has the potential To address the urgent need for new treatment options for patients with PDAC by degrading the tumor matrix and increasing tumor access I co administered cancer therapies. VIRAGE, our Phase IIb trial of VCN-one in Combination with standard of care chemotherapy, gensitabine and nab pacitaxel as a first line therapy for patients with PDAC Continues to advance with dosing well underway across sites in the U. S. And Spain. VCN-one has been With a safety profile consistent with prior clinical trials, we remain on track to complete enrollment with 92 available patients As a reminder, the primary endpoints for the trial include overall survival and VCN-one safety and tolerability.

Speaker 1

Additional endpoints include progression free survival, objective response rate and measures of VCN-one biodistribution, replication and immune response. Since this is an open label trial, Progress will be monitored very closely and steps to accelerate the clinical program may be implemented if supported by emerging data. More broadly, the VIRAGE trial will enable us to determine the feasibility of repeated dosing of VCN-one, Which could shift the paradigm to standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy and may lead to improve clinical outcomes for patients with PDAC and other solid tumors. In addition to advancing the VIRAGE PDAC trial, We continue to work closely with key opinion leaders in the U. S, Europe, Central and South America to refine our clinical strategy in retinal blastoma.

Speaker 1

Since current clinical practice varies and there is no regulatory guidance specific to retinoblastoma drug development, We have submitted our meeting request with regulatory agencies and look forward to discussing the development pathway for VCN-one is an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. We believe intravitreal VCN-one has the potential To treat B3 receipts in children with retinal blastoma and we look forward to leveraging our orphan drug designation in this indication To facilitate protocol discussions with the FDA and other regulatory agencies to enable the development of new potential treatment options In parallel with company sponsored studies, The potential utility of VCN-one is being explored in a number of investigator sponsored studies that are underway at leading oncology research Institutions around the world. Today, I'll focus on recent updates from our collaboration with the Catalent Institute of Oncology or ICO for patients with head and neck cancer and the University of Pennsylvania for patients with pancreatic and ovarian cancer. Data from the ongoing study of VCN-one in combination with durvalumab in patients with recurrent metastatic head and neck cancer We're recently presented at the European Society For Medical Oncology Annual Congress or ESMO. Results showed enhanced patient survival up to almost 4 years in one patient, which correlated With VCN-one mediated increases in CPS score, a key determinant of outcomes with anti PD L1 checkpoint inhibitor therapies.

Speaker 1

These data are remarkable given these patients had all failed prior lines of anti PD L1 treatment. In addition to the presentation at ESMO, we hosted a virtual KOL event featuring Doctor. Ricard Rousseff de HEICO. In addition to reviewing key takeaways from the ESMO poster presentation, Doctor. Masaid discussed The unmet medical needs in head and neck cancer, current treatment limitations and the therapeutic potential of VCN-one.

Speaker 1

Doctor. Museo also highlighted data from the IKO Phase 1 study showing that VCN-one treated patients and improved responses to later lines of therapy. This is consistent with VCN-one's matrix degrading effect, which enables better access by the Co administered cancer therapies and the potential to elicit an extended anti tumor immune response. Consistent with these clinical data, a significant increase in the infiltration of tumors with NIP-one hundred and eleven positive immune cells was observed, which statistically correlated with patient survival. Additionally, the University of Pennsylvania Continue to enroll and treat patients in their Phase I investigator sponsored study administering VCN-one with UCART T meso cells to patients with ovarian and pancreatic cancers.

Speaker 1

BcN-one is designed to increase tumor immunogenicity and improved access by additional therapies such as HUG CAR T meso cells. While cell based Immunotherapies have had limited efficacy against solid tumors to date. We are encouraged by the initial results highlighting the feasibility of administering PCL1 with UCAR T MACE cells. These preliminary results were recently presented at the Society For Immunotherapy of Cancer Annual Meeting or SITC. With no dose limiting toxicities observed today, the study will continue to explore higher doses of VCN-one We look forward to further data from the study to determine if ECN-one can improve patient outcomes with these powerful immunotherapies to treat solid tumors.

Speaker 1

Turning to our ongoing Phase IbIIa Clinical trial, Washington University evaluating SYN-four or ribaximase to reduce potentially fatal Adverse events related to IV beta lactam antibiotic use in allogeneic HCT recipients, including Acute graft versus host disease or AGVHD and overgrowth and infection by pathological organisms such as C. Difficile and vancomycin resistant enterococcal. The Phase IbIIa study is designed to assess the feasibility Using SYN-four, it consists of 3 sequential cohorts comparing different IV beta lactam antibiotics following conditioning therapy. In each cohort, 8 patients will receive SYN-four and 4 will receive placebo. While the data remain blinded, Interim analysis suggests that SYN-four is well tolerated and was not observed in the blood samples of a majority of the available patients.

Speaker 1

Our second cohort is underway and is designed to evaluate SYN-four in combination with peprocillin and tazobactam. This cohort will provide important additional safety information, in particular, whether oral SYN-four has the potential in key indications and combinations. We remain focused on driving our clinical programs forward and exploring opportunities to leverage Our novel and Bloomin Shield technology and exciting additional technologies from our OV discovery platform. I'm confident that the company's strong cash position and upcoming catalysts provide a solid foundation for execution and value creation. We remain on track to complete enrollment for Viroj in the first half of twenty twenty four, Meet with the FDA to discuss the clinical program and potential registration pathway for BCN-one as an adjunct in pediatric patients with advanced retinal blastoma before the end of the year and complete enrollment in the second cohort of our Phase clinical study of SYN-four for the prevention of aGVHD in bone marrow transplant patients in the first half of twenty twenty four.

Speaker 1

Now I'd like to briefly turn to our financial results for the Q3 ended September 30, 2023. General and administrative expenses decreased to $212,000 for the 3 months ended September 30, 2023 from 2 $400,000 for the 3 months ended September 30, 2022. This decrease of 91 Percent is primarily comprised of the decrease in the fair value of contingent consideration of $1,600,000 along with lower salary and bonus costs, Investor relation fees, audit fees, travel and VC and administrative expenses not included in the prior year offset by an increase in consulting fees. The charge related to stock based compensation expense was $95,000 for the 3 months ended September 30, 2023 compared to 90 $3,000 for the 3 months ended September 30, 2022. Research and development expenses increased to $4,000,000 for the 3 months ended September 30, 2023 from approximately $2,600,000 for the 3 months ended September 30, 2022.

Speaker 1

This increase of 56% is primarily the result of higher clinical trial expenses related to our VIRAGE Phase 2 clinical trial of BCN-one and PDAC, offset by decreased expenses related to our Phase IbIIa clinical trial SYN-four in allogeneic ACT recipients, Phase IbIIa clinical trial We anticipate research and development expense to increase as we continue enrollment in our VIRAGE Phase 2 clinical trial of BCDAC In our ongoing Phase 1 clinical trial in retinal blastoma, expand GMP manufacturing activities for VCN-one and continue supporting our VCN-eleven and other preclinical and discovery initiatives. The charge related to stock based compensation expense was $1,000 for the 3 months ended September 30, 2023 compared to $28,000 related to stock based compensation expense The 3 months ended September 30, 2022. Other income was $388,000 for the 3 months ended September 30, 2023 compared to other income of $161,000 for 3 months ended September 30, 2022. Other income for the 3 months ended September 30, 2023 is primarily comprised of interest income of $382,000 and an exchange gain of $6,000 Other income for the 3 months ended September 30, 2022 is primarily comprised of Interest income of $170,000 offset by an exchange loss of $9,000 In a further strengthening of our balance sheet during the quarter ended September 30, 2023, we recognized A $1,400,000 tax credit receivable and offsetting deferred R and D tax credit is a result of our patient in the program, we will be required to maintain certain workforce levels in research and develop expenditures over the next 24 month period.

Speaker 1

Beginning in Q1 2024, the deferred R and D credit will be amortized monthly as a contra expense during 2024 2025. We expect to receive the full cash payment under this program by the end of 2024. Cash and cash equivalents totaled $31,200,000 as of September 30, 2023 compared to 41,000,000 $41,800,000 as of December 30, 2022. We remain deeply Committed to improving patient outcomes through these very hard to treat cancers. And before we conclude today's call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to developing and delivering on our mission.

Speaker 1

I'd like to thank the entire 3 of the team, our investors and the many people who have been supportive along the way, including our patients and their families. With that, we're happy to take a few questions.

Operator

Thank you. We will now be conducting a question and answer session. The confirmation The first question we have is from James Molloy of Alliance Global Partners. Please go ahead.

Speaker 2

Hey, good morning. Thank you for taking my questions. I had a question on expectations for The Phase 2b viroge, the PDAC, I know that we expect to complete first half twenty twenty four, except the enrollment completed in first half twenty twenty four, when should we anticipate Sort of final data and what are expectations for next steps for that trial? Is that something that should the data look good enough, Potentially go to the FDA and be talking about registration or do you think you need an additional trial regardless and you'll talk to the FDA about that?

Speaker 1

Right. So thanks for the question, Jim. A couple of points here. So first and foremost, the Plan is to have the trial completely enrolled in the first half of twenty twenty four and that's consistent with our guidance. I can tell you that we're on track with our enrollment expectations as we speak, and we should be able to achieve that objective.

Speaker 1

The primary endpoint of the trial is overall survival. And if you recall From our Phase I study, we had a cohort where the mean survival was over 21 months. Obviously, completing the trial in early 2024 is not going to bridge you to that primary endpoint And that data won't be available until mid- to late 2025. However, There are other endpoints that we're evaluating in this trial. The next probably more important endpoint is Response rate.

Speaker 1

And because the trial is open label, we will have the ability To evaluate the data as it comes in real time from both of these arms and if we are in a position to Observe response rates that were along the lines of the observations in the Phase I study. That will give us an opportunity To perhaps have discussions with regulators, both in Europe and the FDA. And if you recall that Phase I data at the high dose, we had a response rate of over 80% where the response rate For the standard of care treatment, nab pacitaxel and gensitabine was around 23%. So obviously, one of the reasons for running this Phase II trial with 92 patients is to see if we can replicate the observations that we had And the results we observed in the Phase I study. With that type of data in hand, We'll have that option, if you will, to have discussions with regulatory authorities and anything is Possible.

Speaker 1

Obviously, the agencies, both in the U. S. And abroad, want to get these types of treatments So the patients as quickly as possible, especially if we're seeing significant improvements in survival. So I guess an option is, if the data are as robust as we observed in the Phase I, To convert this ongoing Phase II into a pivotal trial, and I guess, there's always Possibility of some form of accelerated approval with the continuance of enrollment to collect additional data. Does that help answer your question?

Speaker 2

It does indeed. Thank you very much. Much will depend on how the data works, of course.

Speaker 1

Exactly. It's all about the data.

Speaker 2

Exactly right. There are a couple of INDs, I think that previously you had guided to Potentially filing by the end of 'twenty three the adjunctive to chemo With enritinoblastoma potential IND guidance for the end of this year and then also the next gen oncolytic adenovirus, VCN11, A potential IND filing with trials starting sort of Q4 'twenty three. Could you please update where those stand? I know that maybe timelines have adjusted. Right.

Speaker 1

Let me talk to retinal blastoma very quickly, and then I'll have Manel discuss where we're at in our research and development initiatives. The retinoblastoma program continues. Interestingly, we continue to enroll in patients Enrolled patients in the Phase I study. And as that data further matures, we'll have something to talk about At a later date, we do have a meeting with the FDA in December To discuss a path forward for the retinoblastoma program. And Together with our key opinion leaders around the world, we've come up with some ideas about potential Designs for retinoblastoma program, as we mentioned in our discussions earlier, There's no approved treatment for retinal blastoma.

Speaker 1

And those patients today that you treated are done so In multiple different ways depending on what part of the world those patients are being treated. So having an approved treatment with the SET protocol is something that Not only we're very much interested in, but I think treating physicians around the globe would be interested in. So after our meeting in December, I think we'll have a bit better idea about how that program and that trial design May look. And then after those discussions have been finalized, then we could talk To all of you about what the timing of a program like that may look like. Manel, you want to talk about The R and D efforts?

Speaker 3

Okay. Thank you. Yes. So very briefly, so our R and D team is working very intensively in the development of new candidates right now. So we have a bunch of different technologies that some of them has been already been public.

Speaker 3

I've said for instance the ABD technology as you are perfectly aware, it's a technology that basically allows our products to escape interaction with neutralizing antibodies, but our scientists have also developed the new technologies right now and they are right now evaluating the combination of these new technologies with the ABB technology to generate a more powerful product. And in fact, that's something They are very actively working in just fine tuning the best candidate to move to the clinic. That's something that we expect to occur Probably at some point during the first half of next year also. And in parallel to that, the team has also been working in all this asset Related with manufacturing, which is an intrinsic part of the development of products and it's very relevant because as you know for our products, the replication It's a critical feature that allows for a much better clinical behavior. So we have been increasing our capabilities here also in the Manufacturing terms for testing the process development for the new candidates that we are developing and we Acquired new equipments in our lab here in our facilities in Europe.

Speaker 3

And we are very committed that with this New capabilities, we are going to just generate very relevant data for just moving ahead The new candidate faster than we have done previously.

Speaker 2

Okay. Maybe last question on the pipeline then, if I could please. I think you guys touched on most of your early stage ISTs. Okay. Can you touch on the glioblastoma one with University of Leeds where that IST stands?

Speaker 2

And then as you look that you've been You've been in these trials for a little bit. Can we stand back and look? Do you see 1 or 2 that look most more promising than others at this juncture?

Speaker 1

Sure. Vince, you want to take the leads question first?

Speaker 4

Yes. So thanks, Jim. The University of Leeds study, We had to well, it's an investigator sponsored study. The investigators wanted to make an amendment to the protocol, which they did to help With the scheduling of the surgery that's part of that protocol, as you're probably well aware in the U. K, everything runs through the NHS.

Speaker 4

And so scheduling was becoming a bit of a challenge and they submitted that protocol. That protocol has recently been approved by the MHRA And we are now working on the appropriate drug supply for them to move forward with that study. It's a study that's really a PK study. I just want to remind everybody fundamentally to see whether or not intravenous virus can get into the brain. So we have the one patient that's been treated.

Speaker 4

We don't have the final results from them. But that study is moving comparatively slowly just because of this amendment took quite a while to get approved.

Speaker 1

So then maybe I'll just touch briefly on what I think we're learning from What we're doing in the clinic and what offers the most promise for unlocking the most value for the shareholders. Obviously, PDAC is the most important program to the company. It's the one where we're committing, I would say, 90 plus percent of our financial resources to. The other program that is very exciting that we just recently talked about From ESMO, is the data using BCDN-one in combination with davirilumab in head and neck cancer patients? We had an investigator call following the release of the data at ESMO and when we put that press release out, That interview and conference is still available on our website, and I encourage investors to go listen to it because it was quite revealing.

Speaker 1

Essentially, this was a group of 20 patients that had failed checkpoint inhibitor therapy. These patients typically die within 7 months after they've failed multiple rounds of checkpoint inhibitor therapy. These patients were then given VCN-one and then started up on checkpoint inhibitor therapy once again. And we had some pretty remarkable results. On average, at the low dose, we had a survival rate of Program for partnering and we have engaged with folks That should be interested in a program like this and we'll keep you updated on the progress of those types of discussions.

Speaker 2

Okay. Well, last question, I know that you touched on it in the prepared remarks of a G and A pretty remarkable drop in the quarter. Is Is this the level we should expect going forward? Or is it going to go back to more than $2,000,000 roughly per quarter than it had been over the last number of quarters?

Speaker 1

It will go back to more of the $2,000,000 That was an anomaly resulted to the accounting for the contingent consideration. We had a payment To the Grifols and obviously every quarter you readjust and revalue The future payments that are all milestone driven, so that was more of an anomaly for the quarter.

Speaker 2

Great. Thank you for taking the questions.

Operator

Thank you. There are no further questions at this time. I would like to turn the floor back over to Steve Shallcross for closing comments.

Speaker 1

Thanks Irene and thank you to everyone for taking the time to join us today. Again, we remain focused on driving our key programs forward and will continue to evaluate strategic opportunities that we believe Have an opportunity to drive significant shareholder value and long term success. Once again, thanks for joining us today. Look forward to keeping you updated in the future. Have a great week.

Operator

This concludes today's conference. Thank you for joining us. You may now disconnect your lines.

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Theriva Biologics Q3 2023
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