Theriva Biologics Q4 2023 Earnings Call Transcript

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March 25, 2024

There are 6 speakers on the call.

Operator

Greetings, and welcome to the Cereva Biologics Full Year 2023 Investor Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Chris Calabrese with LifeSci Advisors. Thank you.

Operator

You may begin.

Speaker 1

Thank you, operator, and good morning, everyone. Welcome to the 3rd of Biologics Full Year 2023 Investor Conference Call. Leading the call today will be Steven Shalcross, Chief Executive and Chief Financial Officer of Cereva Biologics Doctor. Manel Cascayo, General Director of Cereva Biologics, European subsidiary and Doctor. Vince Wacher, Head of Corporate and Product Development of Cereva Biologics are also on the call and will be available to answer questions during the Q and A session.

Speaker 1

Cereba Biologics issued a press release this morning, which provided operational highlights and included the financial results for the full year ending December 31, 2023. The press release can be found in the Investors section of the company website at www.varivabio.com, together with the annual report on Form 10 ks for full year ended December 31, 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 website, www.tarevabio.com for 90 days. During this call, certain forward looking statements regarding Cereva Biologics and DCN Biosciences' current expectations and projections about future events will be made. Generally, the forward looking statements can be identified by terminologies 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 Cereva 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, and Cereva Biologics undertakes no obligation to update any forward looking statements contained on this conference call on account of new information, future events or otherwise, except as required by law. With that, I'd like to turn the call over to Steve. Steve?

Speaker 2

Thank you, Chris, and good morning. I appreciate everyone for taking the time to join us today. In 2023, we continue to make steady progress to drive forward our oncology focused portfolio designed to address unmet needs for difficult to treat cancers. Our primary efforts and resource are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate, BCN-one. As a reminder, BCN-one is a systemically administered acolytic adenovirus designed to selectively replicate within the tumor, degrade the tumor matrix and increase tumor immunogenicity.

Speaker 2

We believe these multiple modes of action position Vc01 for optimized tumor killing in combination with chemotherapy and immuno oncology products in otherwise refractory solid tumors. We have shown that repeated systemic dosing of VCN-one is feasible from a safety perspective and we can now focus on whether the repeated dose VCN-one regimen may lead to improved clinical outcomes for patients. Beyond VCN-one, we are pursuing new oncolytic virus candidates to leverage our novel AbumenShield technology, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate more frequent repeated administration of oncolytic virus therapies. This may enable our pipeline of products 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 IbIIa clinical trial of SYN-four designed to prevent potentially fatal adverse outcomes in patients who undergo alginate hematopoietic cell transplant, HCT, to treat hematologic cancers.

Speaker 2

With our cash runway into the Q1 of 2025, we believe we're well positioned to execute on our corporate objectives and remain on track to achieving multiple value enhancing milestones. With this brief introduction, I'd like to expand on key pipeline updates starting with our lead program VCN-one. VCN-one has been administered to more than 100 patients across diverse indications, which speaks to the broad therapeutic potential, including pancreatic ductal adenocarcinoma or PDAC, retinal blastoma, head and neck squamous cell carcinoma, colorectal cancer and ovarian cancer. VCN-one has been granted orphan drug designation in the U. S.

Speaker 2

And Europe for the treatment of pancreatic cancer and in the U. S. For retinal blastoma, providing additional opportunities for regulatory engagement and if approved market exclusivity. Our most advanced program for VCN-one is in PDAC for which incidence continues to rise in an indication that has one of the lowest survival rates among all cancers. 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 2

We believe VCN-one's differentiated mechanism of action 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 by co administering cancer therapies. We are pleased to report that dosing is well underway for VIRAGE, our Phase 2b trial of VCN-one in combination with standard of care chemotherapy, gensitabine and nab pacitaxel, which is being evaluated as a first line therapy for patients with PDAC. With 6 sites open in the U. S. And 9 sites open in Spain, Viroj remains on track to complete enrollment in the first half of twenty twenty four.

Speaker 2

In the Q1 of 2024, we completed the 1st safety review with the Independent Data Monitoring Committee or IDMC. With a positive recommendation from the IDMC, Viroj will continue to enroll patients without any changes to the protocol. Notably, intravenous VCN-one has been well tolerated and demonstrated profile consistent with prior clinical trials. Importantly, no additional toxicities were observed in patients receiving a second dose of VCN-one providing the first clinical evidence of the feasibility of repeated systemic dosing. As a reminder, primary endpoints for the VIRAGE trial include overall survival and BCN-one safety and tolerability.

Speaker 2

Additional endpoints include progression free survival, objective response rate, measures of VCN-one biodistribution, replication, immune response and measures of the quality of life of treated patients. 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. This could shift the approach to standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy and may lead to improved clinical outcomes for patients with PDAC and other difficult to treat solid tumors. In addition to advancing the VIRAGE PDAC trial, we continue to work closely with key opinion leaders in the U.

Speaker 2

S, Europe and Central and South America as well as with regulatory agencies to refine our clinical strategy in retinal blastoma. We believe intravitreal VCN-one has the potential to treat vitreous seeds in children with retinoblastoma. Since current clinical practice varies and there is no regulatory guidance specific to retinoblastoma drug development, we held a pre IND meeting with the FDA in the Q4 of 20 23 to discuss development pathway for VCN-one as an adjunct to chemotherapy and pediatric patients with advanced retinoblastoma. During our meeting with the FDA, we were provided some guidance on the potential endpoints in patient population for an advanced clinical trial and encourage to submit a formal protocol under a U. S.

Speaker 2

IND in order to provide a more detailed commentary for this program. We are encouraged by our actions with the FDA and look forward to driving this program forward. 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. Notably, collaborators at Sanjung D'Ao have completed patient treatments in the Phase 1 investigator sponsored trial evaluating the safety and activity of intravitreal VCN-one in pediatric patients with refractory retinoblastoma. The trial evaluated escalating doses of VCN-one administered by 2 intravitreal injections separated by 14 days and remains on track to complete patient follow-up in the first half of twenty twenty four, which will help to inform the planned Phase II trial design and the protocol.

Speaker 2

As a reminder, preclinical data have shown that topotecan treatment enhanced BCN-one oncolytic activity against retinal blastoma and more broadly reinforced, BCN-one's possibility as an adjunct to intravitreal chemotherapy in patients who fail currently available treatments. We remain encouraged by the potential of this novel combination approach to provide superior clinical benefits for children with this devastating cancer. Additionally, the University of Pennsylvania continues to enroll and treat patients in their Phase 1 investigator sponsored trial VCN-one is designed to increase tumor immunogenicity and improve access by additional therapies such as hucard meso cells. While cell based immunotherapies have had limited efficacy against solid tumors to date, we are encouraged by initial results highlighting the feasibility of administering BCDN-one with this type of CAR T therapy. These preliminary results were presented last year at the Society For Immunotherapy of Cancer Annual Meeting or SITC.

Speaker 2

The UPenn investigators are continuing to explore the optimal dosing regimen for VCN-one co administered with UCART meso cells and we look forward to further data from the study in 2024. Turning to our ongoing Phase 1b2a clinical trial of Washington University evaluating SYN-four or ribaxamase. The trial is designed to evaluate the therapeutic potential of SYN-four to reduce fatal adverse events related to IV beta lactam antibiotic use and 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 enterococci. The Phase IbIIa study is designed to assess the feasibility of using SYN-four and consists of 3 sequential cohorts comparing different IV beta lactam antibiotics following conditioning therapy.

Speaker 2

In each cohort, 8 patients will receive SYN-four and SYN-four 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. Our second cohort is underway and is designed to evaluate SYN-four in combination with pebrosillan and tazobactam. The trial is on track to complete enrollment in the 2nd cohort in the Q2 of 2024. This cohort will provide important additional safety information, in particular, whether oral SYN-four has the potential to alter IV antibiotic levels in this patient population.

Speaker 2

We look forward to sharing this data in the second half of 2024. Overall, we are encouraged by the progress across our pipeline and the growing clinical data that underscore the promise of our systemically administered oncolytic adenovirus in key indications and combinations. We remain focused on driving our clinical programs forward and exploring opportunities to leverage our novel AbbVu MinShield technology and exciting additional technologies from our OV discovery platform. I'm confident that the company's upcoming catalyst will provide a solid foundation for execution and value creation. Specifically, we remain on track to complete enrollment for the VIRAGE study in the first half of twenty twenty four, complete follow-up in the Phase 1 investigator sponsored trial evaluating the safety and activity of intravitreal visenolone in pediatric patients with refractory retinoblastoma in the first half of twenty twenty four and complete enrollment in the second cohort of our Phase IbIIa clinical study of SYN-four the prevention of AGVHD in bone marrow transplant patients in the Q2 of 2024.

Speaker 2

Now I'd briefly turn to our financial results for the 1st full year ended December 31, 2023. General and administrative expenses decreased to $7,100,000 for the year ended December 31, 2023 from 9.9 $1,000,000 for the year ended December 31, 2022. This decrease of 28% is primarily comprised the decrease in the fair value of contingent consideration of $2,800,000 along with lower salary, Investor Relations, legal costs, consulting fees related to the VACN acquisition and director and officer insurance, offset by higher audit fees and other consulting fees. The charge related to stock based compensation expense was $400,000 for the year ended December 31, 2023 compared to 0 point $4,000,000 for the year ended December 31, 2022. Research and development expenses increased to $14,300,000 for the year ended December 31, 2023 from $11,700,000 for the year ended December 31, 2022.

Speaker 2

This increase of 22% is primarily the result of higher clinical trial expenses related to our VIRAGE Phase 2 clinical trial of VCN-one and PDAC, offset by lower expenses related to our Phase IbIIa clinical trial of SYN-four and alginate HCT recipients, the completed Phase 1a clinical trial of SYN-twenty, decreased manufacturing expenses related to our Phase 1a clinical trial SYN-twenty and lower other indirect costs. We anticipate research and development expense to increase as we continue enrollment in our VIRAGE Phase 2 clinical trial of VCN-one in PDAC and 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. Research and development expense also includes a charge related to non cash stock based compensation expense of $165,000 for the year ended December 31, 2023 compared to $112,000 for the year ended December 31, 2022. Other income was $1,442,000 for the year ended December 31, 2023 compared to other income of $471,000 for the year ended December 31, 2022. Other income for the year ended December 31, 2023 is primarily comprised of interest income of $1,439,000 and an exchange gain of $3,000 Other income for the year ended December 31, 2022 is primarily comprised of interest income of $512,000 offset by an exchange loss of $41,000 Cash and cash equivalents totaled $23,200,000 as of December 31, 2023 compared to $41,800,000 as of December 31, 2022.

Speaker 2

We remain deeply committed to improving patient outcomes for 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 delivering on our mission. 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 questions.

Operator

Thank you. Thank you. Our first question comes from the line of James Molloy with Alliance Global Partners. Please proceed with your question.

Speaker 3

Hey, guys. Good morning. Thank you very much for taking my questions.

Speaker 2

Hello.

Speaker 3

I had a question. Hello, Steven. A question for you, Steven, for you or Manel. Looking across the multiple ISTs, which are a very cost efficient way of getting trials done, excellent use of capital, Which do you guys see as sort of the most promising? I know you love all your children, of course, but which seems like might be growing the tallest when you're looking across the plethora of ISTs you guys have got underway?

Speaker 3

Thank you.

Speaker 2

So let me just highlight what we've got going on once again. And then, Manel, you could talk specifically about some of the exciting findings that we've have disclosed at various scientific conferences. So as you're aware, we put out some incredible head and neck cancer data at ESMO last October. This is using BcN-one in combination with checkpoint inhibitors in patients that were refractory to previous rounds of checkpoint inhibitor therapy. So Manel could talk a little bit about that.

Speaker 2

We've got the retinal blastoma program, which we've just concluded and now we're in the middle of follow-up. And then we've got the ongoing UPenn study, which is down to their organization trying to isolate the right dose to take forward. So we would expect to see some more data sometime this year related to the work they're doing there. So Manel, maybe you could just highlight the important findings in those three studies that are ongoing or if recently completed?

Speaker 4

Yes, sure. So obviously, the muscle complete data, let's say, it's from the trial in HettenNet that we presented at ESMO in October. As you know, this was a trial combining VCN-one with dorvodumab and in patient refractory to the action of immuno checkpoint inhibitors in head and neck carcinoma. Okay. And we have previously presented safety data that demonstrated that DCN-one has an acceptable safety profile when administered prior to durvalumab.

Speaker 4

And in this new presentation that we conducted in October, we presented data on efficacy. And we have seen that the patients treated with BGN showed an increased response to a subset of chemotherapy treatments after progression to this trial. But specifically, we have also seen that the survival of patients has been enlarged for a number of patients. And in fact, there are some patients still alive more than 4 years after participating in the trial, which in my view is quite remarkable because those patients who are entering the trial has an expectancy of life between 3 or 4 months. And what we are seeing, obviously, it's really impressive.

Speaker 4

And moreover, it's not just a question of efficacy, but there's a very good correlation between these response and the biological data that we are getting from the tumor biopsies of those patients. And in fact, we have seen down regulation of the tumor matrix genes. We have been observing increasing levels of immune markers in the tumor biopsies. And interestingly, there was a correlation between the survival and with the CPS score at a day after VGN-one treatment. CPS score, it's a kind of marker about the immunological status and what looks in our biological data is that Vision 1 treatment is changing this environment and there's a correlation between the magnitude of the change that we use and the survival of patients, which is I think exciting.

Speaker 4

Obviously, it's a reduced population, but it's exciting. In retinal glaucoma, we have been treating more patients. We have seen some patients with reduction in the VQ seats. But specifically, we have been also collecting data of combination with chemotherapy. The chemotherapy that is used in retinoblastoma, it's topotecan.

Speaker 4

And in this trial, we have seen not here in the clinical patients, but in preclinical work that we have done with biopsies and from human cells, we have been observing that there's a synergy between the action of DECISION1 and COPUTIKAN, which is very encouraging and opens the door for a combination approach in our Phase 2 program that is basically what we discussed with FDA in our meeting, okay? So basically, the data we are collecting, it's very exciting. And in my view, it's very exciting to see that in different indications, we can confirm the mechanism of action and we can see initial evidence of activity in head and neck, in retinoblastoma, which is also the thing that we have observed in our Phase I for pancreatic cancer. So that data is quite consistent in that way.

Speaker 5

Great. Thank you very much

Speaker 3

for taking that. A quick follow-up on the retinoblastoma IST. When do you anticipate potentially filing an IND and starting the Phase twothree, again, presuming the Phase 1 wraps up as you hope? And then I have a follow-up too. In the Phase 2b Viroj, I know the enrollment is complete in your first half twenty twenty four.

Speaker 3

When should we anticipate final top line data for Viroj?

Speaker 2

So, Manel, why don't you take the first one and then Vince, you could take the second.

Speaker 4

Yes. For retinal restoma right now we are just following the follow-up of patients, okay. As you know in the clinical trial you treat the patients that part is already finished, but we need to follow the patients for 6 months after the last dosing. So we are expecting to finish our database with data of the trial in mid-twenty 24 probably. And after that, we need to write the clinical study report and start discussing with FDA the final design of the IND.

Speaker 4

So I don't expect to go for an IND until 2024 'twenty five, sorry, by sure, because obviously, we need finish some activities before submitting any IND for writingoblastoma. Vince, do you want to give some color on the pancreatic program?

Speaker 5

Yes. Thanks, Manav. So as Steve indicated, our VARAGE study is enrolling and we anticipate completing our enrollment in the first half of this year. With the patients all in, then we will be very closely monitoring the emergence of our data. And there's 2 key outcomes.

Speaker 5

1, obviously, our primary endpoint is survival. We'll be following those patients and the longer the better from our perspective because we want to have a good effect. So the primary endpoint data, the survival won't read out until next year. And I can't pick when we would like to for that to be potentially in the second half of the year for the longer as long as these patients keep going. We want patients on our drug to do well.

Speaker 5

In the interim, we'll be looking at our data to see if there's something that we can around which we can build a formal interim analysis to review with the FDA and discuss the next steps how we can potentially advance our program quickly into a pivotal trial. And as we know, as you know, we've got the orphan drug designation. So we'll leverage that strategy. But again, we can't necessarily timing other than later in the year for potential interim analysis if we choose to do one. But the overall endpoint for the primary endpoint for survival will be next year.

Speaker 4

Great. Thank you very much.

Speaker 3

And maybe a final couple of questions for me. On SIN-four, can you walk through sort of the end game for SYN-four, where so what which we anticipate sort of coming to a conclusion on that on the data, sort of timing on that? And then can you talk a little bit about how the partnership and characterize the partnership environment currently for potentially out licensing, O2O or really any of your compounds?

Speaker 1

Sure. So

Speaker 2

as you know, the SYN-four trial is a single site study at Washoe and those partners have been outstanding. Fortunately or unfortunately, the time it takes to enroll a trial like that is subject to the number of patients that actually meet the screening criteria so they can be brought into the trial. We're going to complete that trial as I stated earlier in relative short order. And then we'll obviously have some disclosure around that. This cohort is pretty important because SYN-four does degrade the combination of preprosillon and tazobactam.

Speaker 2

And obviously, we're monitoring the data in this trial and want to make sure that the antibiotic is not interfered with in this more fragile patient population. So once we have that data in hand, we'll make a decision about whether or not we advance into the 3rd cohort or whether or not we have enough to answer our questions that were brought to us by the FDA. And then this asset ties in more broadly to the initiatives we have underway to identify potential partners across our entire pipeline. So we've hired some outside advisors, one group specific to help us finding a home for SYN-four and we've had engagement. And again, a lot of this has to do about when we have the data.

Speaker 2

We also have a group we're working with and outreach to potential partners for the VCN-one platform. And once again, we've had multiple engagements and interest and we'll continue those discussions. And once again, data is key. We've also have some folks that we're working with to try to find a home for the SYN-twenty program. And again, those discussions are ongoing.

Speaker 2

I think the environment has gotten a bit better recently. I think over the last couple of years, given sort of the bear market that biotech and small and microcap biotech has been in, has hindered a lot of discussion. But I'm more optimistic. Things seem to be picking up a little bit. And in keeping with our strategy and how we view these ongoing discussions, We're not going to talk about specific interactions.

Speaker 2

And when we have something, obviously, we'll make a disclosure about that.

Speaker 3

Of course. Great. Thank you very much for taking the questions.

Operator

Thank you. Mr. Shawcross, I'm not seeing any other questions at this time. I'll turn the floor back to you for any final comments.

Speaker 2

Okay. Thank you, Melissa. Well, thanks again everyone for taking the time to join us today. I hope you sense that we're incredibly focused on driving all of our programs forward. We're doing this in a way which I think we're very good stewards with our cash and making and stretching that dollar the best we can to get as much data and as many clinical outcomes and results as possible.

Speaker 2

We'll continue as we just ended with Jim here to evaluate our strategic options and we'll continue to look for ways to drive additional value for our shareholders and for the long term success of what we're trying to do, namely delivering promising treatments for very, very difficult to treat cancers. Thanks again for joining us and we look forward to keeping you updated on our progress.

Operator

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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Theriva Biologics Q4 2023
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