ACV Auctions Q2 2024 Earnings Call Transcript

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August 14, 2024

There are 7 speakers on the call.

Operator

Welcome to Telferra's Second Quarter 20 24 Financial Results Conference Call. This call is being webcasted live via the Events page of the Investors section of TOLFERA's website at www.tolfera.com. This call is the property of TOLFERA and any recording, reproduction or transmission of this call without the expressed written consent of TOLFERA is prohibited. As a reminder, this webcast is being recorded. You may listen to a replay of this webcast by going to the Investors section of Telfera's website.

Operator

I would now like to turn the call over to Raffi Asadorian, Telfera's Chief Financial Officer.

Speaker 1

Thank you for joining us on the call today. This afternoon, we announced our Q2 2024 financial results and associated business updates in a press release. This press release can be found within the Investors section of our website. With me today are Vince Angotti, our Chief Executive Officer and Doctor. Pam Palmer, Telfera's Founder and Chief Medical Officer.

Speaker 1

Before we begin, I want to remind listeners that during this call, we will make forward looking statements within the meaning of the federal securities laws. These forward looking statements involve risks and uncertainties regarding the operations and future results of Calfara. Please refer to our press release in addition to the company's periodic, current and annual reports filed with the Securities and Exchange Commission for a discussion of the risks associated with such forward looking statements. These documents can be found on our website within the Investors section. I will now hand the call over to Vince.

Speaker 2

Thank you, Raffi. Good afternoon, and thank you for joining us on the call. Before jumping into the updates for the quarter, I'd like to congratulate Doctor. Palmer on her decision to retire this coming October. Pam was the Co Founder and Chief Medical Officer of the company as well as a dedicated leader for nearly 2 decades.

Speaker 2

Doctor. Palmer is a renowned physician, pioneer and long time entrepreneur with a mission to improve care for patients in the medically supervised setting. Pam has made her mark in the world of pharmaceuticals and healthcare and mentored countless people along the way who will continue her legacy. While she may be retiring, Doctor. Palmer will continue to advise TALFERA and support Doctor.

Speaker 2

Shaquille Aslam until the nephro study has been completed and the potential FDA of approval of NIAID is received. So please join me in wishing her all the best in her return. I'm happy to report that we now have multiple sites screening patients in the study. We had a busy quarter continuing to work through the administrative processes encountered at the academic institutions where the NEFPRO study will be conducted and we have finalized clinical trial agreement terms now with 8 large academic institutions, including our potentially highest enrolling sites. The final four site initiation visits of these initial 8 institutions are scheduled to be completed this month.

Speaker 2

While each institution has had their own unique upfront administrative activities, once enrolling, we do not expect additional delays as the protocol dictates how the study is conducted. NIAID's breakthrough designation has continued to prove valuable in our interactions with the FDA. Our ongoing real time communications with the FDA regarding the study have been efficient and we expect this to continue as we progress the study over the coming months. For example, we recently requested and promptly received the FDA's approval to increase the number of nephro study sites to a maximum of 14. We sought this approval to 1, expedite study completion by increasing the number of high volume CRRT institutions and 2, maintain access to a broad patient population to inform healthcare providers on the use of NIAID if approved.

Speaker 2

Doctor. Azlim's nephrology expertise and established professional network has already proven invaluable in identifying this expanded base of potential clinical sites in support of the study. As communicated on the last call, Doctor. Aslam joined Talferra as our new Chief Development Officer on May 20th. Doctor.

Speaker 2

Azim has over 20 years of clinical research experience specializing in nephrology. Doctor. Azim joined us from BioCryst Pharmaceuticals where he served as Vice President, Clinical Development, Nephrology and Rare Diseases. He's held development roles at Angion, Fresenius and Amgen and was an assistant professor at Georgetown University Hospital for 12 years focused on clinical care of acute and chronic kidney disease, hypertension, renal transplantation and other nephrological diseases. Doctor.

Speaker 2

Azim's extensive experience across industry and academia as a renal expert, particularly in the design and conduct of both drug and device clinical trials is impressive and a true asset to our organization. Immediately upon joining TALFERA, Doctor. Aslam immersed himself in establishing and fostering Telfera's relationships with our selected nephro institutions and research personnel, including personally conducting site initiation activities and training of the institutional teams. Importantly, the balance of our 8 sites, including our potentially largest enrolling sites should be enrollment ready in the coming weeks. And while we're not prepared to provide guidance on expected study completion and PMA filing timelines, our engagement with the principal investigators remains high, and we believe the study will enroll efficiently at the sites.

Speaker 2

Recall that the primary endpoint of activated clotting time is measured over 24 hours with a patient completing the study after activated clotting time is assessed at 72 hours, which is also a secondary endpoint. These relatively short study time points combined with a patient study population of only 166 patients and now expansion to 14 study sites should support efficient completion of the study once fully underway. We expect to provide an updated timeline for study completion, PMA filing and anticipated PMA approval on our next quarterly call. While the clinical study is ongoing, we've been working on pre launch commercial activities in preparation for the commercial launch of NIAID again if approved. This has included further market research with a group of nephrologists, intensivists and pharmacy directors.

Speaker 2

The participants in our research group highlighted nafamistat strong safety profile over the last 30 plus years, particularly for patients with liver impairment or contraindications to heparin and citrate. Specifically, the participants commented on the Famostat safety attributes such as its ultra short half life, allowing it to be rapidly cleared and potentially avoiding unwanted complications seen with longer circulating agents such as heparin and citrate. In addition, our research continues to support the potential commercial uptake of NIAID at a competitive price as compared to the total cost of citrate anticoagulation, which includes the cost of calcium and the required monitoring of calcium levels. These results reinforce our belief that the peak sales estimate for NIAID in the hospital setting approximates $100,000,000 while a potential opportunity in outpatient dialysis settings could add at least another $100,000,000 of peak sales. We remain focused on the hospital opportunity as this is where our current nephro CRRT study is being conducted.

Speaker 2

In addition to the progressing clinical study and commercial preparation, We continue to make positive advancements in our manufacturing and related CMC efforts for NIAID. All active ingredient and finished drug production to date have met our specifications. We're collecting extended stability data on our GMP grade product to support shelf life for our potential commercial product. Our manufacturing partners have done an excellent job achieving timelines, specifications and the cost expectations we've set for them. And before handing the call over to Rafi, it's important to know that our largest investor, Nata Hala, remains supportive and with continued progress in the clinical study committed to ensuring Tafera's adequate funding to reach potential PMA approval of NIAID.

Speaker 2

This continued support is highly appreciated. And as a result of the extension of the original timeline, both parties agree on the need to amend the timing of the planned second close of our financing, which was originally expected to occur by September 30 this year. Now I'll hand the call over to Rafi to take you through the details of our 2nd quarter financial results. Rafi?

Speaker 1

Thanks, Vince. We continue to control operating expenses while prioritizing investments that will facilitate the timely filing of our NIAID PMA. This emphasis on expense containment has helped us close the Q2 with $14,000,000 in cash and investments. Our cash operating expenses or combined R and D and SG and A expenses excluding non cash stock based compensation of $200,000 in the 2nd quarter totaled $4,000,000 compared to $3,800,000 last year. While we incurred certain expenses related to the Nephro CRRT study in the 2nd quarter, we expect these costs will increase for the remaining quarters of the year as study enrollment accelerates.

Speaker 1

The estimated range of cash operating expenses for the year has been reduced to $19,000,000 to $21,000,000 from the previous range of $21,000,000 to $23,000,000 accordingly. As mentioned earlier, we plan on amending the date of the planned second closing from our January 2024 financing that was contingent upon achieving the pivotal trial milestone by September 30 this year. We expect this amendment to be completed before filing our next quarter 10 Q. I'll now turn the call back to Vince. Thanks, Raffi.

Speaker 2

I'd now like to open the line up for any questions you might have. Leeway?

Operator

Thank you so much. And ladies and gentlemen, we will now begin the question and answer session. And our first question comes from the line of Ed Arce of H. C. Wainwright.

Operator

Your line is now open.

Speaker 3

Hi, thanks for taking my questions and congrats on the progress. I have a couple of questions, but first, I just wanted to add my congratulations to Pam. I've been covering the company for 12 years now, worked with Pam since the very beginning and

Speaker 2

wanted to

Speaker 3

offer my hearty congratulations to a very well deserved retirement.

Operator

Thank you, Ed.

Speaker 3

You're very welcome. So I know it's coming up in the next call for the timeline update, but I wanted to get a sense for where we are now if possible in terms of the number of patients that have completed the study or perhaps and or patients that have been screened to date to go into the study?

Speaker 2

Yes, I can help answer that. This is Vince. So as it relates to screening, the screening has just begun within the last several weeks and primarily done at what I'll call our lower enrollment potential sites. These sites were selected because of the quality of the care at their particular institutions. And in particular, you might say, why would you have a lower potential enrolling site involved?

Speaker 2

The quality of the PI at these sites and the diversity of patients at these sites, which makes them by nature lower enrolling potential. Doctor. Palmer, maybe you can comment on the characteristics of the patients at these particular sites.

Speaker 4

Yes. They just happen to be the ones that got up and running more quickly. But, these yes, these particular sites, I mean, we need to see NIAID's efficacy and safety in sort of a broad spectrum of patients, different ICUs, surgical ICU, medical ICU, patients with liver failure, younger patients, younger adults versus older adults. And so these two sites were put in the mix for that reason. They just happen to get up and running more quickly than the others, but we're not expecting a lot of patients from them.

Speaker 4

So even though they have started pre screening and screening, they were not the more recently screening site that we've gotten up and running is considered to be a much big heavy hitter.

Speaker 2

Yes. I think importantly to your point on that, while no one has completed the study, the 3rd site that Doctor. Palmer mentioned that just came up to become enrollment ready and screening over the course of, I think it's the last week and a half to 2 weeks, the first day after started screening patients. So they immediately got on to the PI is highly involved and excited about the study. And the balance of our sites are all the highest enrolling sites and they all should complete their site initiation visits this month as scheduled and be enrollment ready as they go by the close of this month.

Speaker 2

And then we'll start to really see the ramp in the cadence on the screening versus completions.

Speaker 3

Okay. That's helpful. Two others, if I may. These 4 are for Rafi. I think you mentioned in your prepared remarks that the cost for the remainder of the year, operating costs would be expected to increase, which is as one would expect within enrolling Phase 3.

Speaker 3

Wondering if there's any sort of quantitative color that you could provide on OpEx. And then the other question was around the financing and I missed what exactly you said about September and what's happening there and your plans to refinance that? Thanks.

Speaker 1

Yes, sure. So the new guidance, Ed, for the year, we reduced this is for cash operating expenses, has been reduced to $19,000,000 to $21,000,000 So if you take that $19,000,000 we've had about $8,000,000 year to date. So we can expect around $11,000,000 for the close of the second half for cash operating expenses given that range. So it increases a bit from the we've had about $4,000,000 of cash operating expenses in the previous for each quarter $4,000,000 for Q1 about $4,000,000 for Q2. So expect that to increase if you forecast that pretty evenly that remaining $11,000,000 for the second half of the year.

Speaker 1

Does that answer that question?

Speaker 3

Yes, that's helpful. Thanks. Okay.

Speaker 1

Yes. And in terms of the yes, in terms of the Nantahala, the amendment, I mean, that's the focus here really is to work on amending that date. And we've already had some initial discussions. But amending that September 30 date to a new date that works for both parties in terms of the study completion and announcement to get to that pivotal trial milestone. Milestone.

Speaker 1

I don't want to forecast what that date will be, but that's the real focus on our discussions with Nantahala to get that done as kind of the first priority.

Speaker 2

I'll make a comment about Nantahala just quickly. I just want to remind you they're on our Board, Avi Jain as a representative of Nantahala and they're highly active with the management team and in the know on how the study is being conducted in the pace. So there's very good alignment there,

Speaker 1

which has been very helpful to have with them. Right.

Speaker 3

Got it. Thanks for all the perspective. Appreciate it. Sure.

Operator

Thank you so much. And your next question comes from the line of Nazaraman of Maxim Group. Your line is now open.

Speaker 5

Hi, thanks for taking my questions. First, I also want to extend my congratulations to Doctor. Palmer on her work and her well earned retirement. I just have a couple of questions, if I may. So seeing how you mentioned that you're expanding the number of study sites to 14, What gives you confidence that you could initiate the new and additional sites in a timely manner?

Speaker 5

Do you think you can get that done by the end of 2024 considering what happened to the prior sites? And how long do you think it would take to initiate the additional sites?

Speaker 2

Yes, I think that's a really good question. And a couple of things, then I'm going to turn it over to Doctor. Palmer. So I think it's important to understand why we did that with the FDA. And while we've got 8 sites now that we feel are prepared to be enrollment ready by the close of this month.

Speaker 2

And again, I'll emphasize the highest enrolling sites, the highest potentially enrolling sites within that group occurring in August. We've always been sourcing sites to get up to the original 10. And so of course you sourced many more sites than that. I think what we've learned along the way is that the facilitation of the contracting process and administrative process in combination with the quality of the sites is the key element moving forward. So Doctor.

Speaker 2

Palmer, maybe you can comment that what we've learned to date and how we're going to apply that to the next set of sites. And I do believe that we might not have them all up and rolling by the end of the year. And they likely won't affect the first half of enrollment. We certainly expect them to affect the second half of the 166 patient enrollment.

Speaker 4

Yes. It's really an insurance policy. I mean our site feasibility questionnaires were focused around volume of CRRT patients, the type of CRRT patients, at these different academic centers. And this new set of sites that we're evaluating is really going to be focusing not only on that, but on the rapid ability to contract and budget. That is just absolutely critical for them to be able to quickly get on board and give us an insurance policy.

Speaker 4

So at the last half of the enrollment, will be a lot faster than the first half.

Speaker 5

Hi. Just on that point, could you, I guess, give more color or context around the scale of these additional sites? Are they closer to like the high enrollment sites or closer to, I guess, the lower enrollment client sites?

Speaker 4

No, definitely the higher, but it's not just their CRRT volume and their ability to enroll, but it's also going we're going to be selecting, for rapid paperwork processing universities, sites that really can streamline that.

Speaker 2

We've already started our initial contact with an additional 20 sites. So we're going out pretty large to funnel it down to get to the ultimate fourteen number. And again, they early assessment is they know fairly quickly and respond fairly quickly where the contracting process can be facilitated in an expedited manner or not.

Speaker 5

Got it. Thanks for taking my questions. And once again, congrats on your retirement, Doctor. Palmer.

Operator

Thank you. Thank you so much. And our next question comes from the line of James Malloy of Alliance Global Partners. Your line is now open.

Speaker 6

Hey guys, thank you for taking my questions. Congratulations to Doctor. Palmer on your retirement as well. Could you walk through a little bit, I don't know if Doctor. Aslan is on the call.

Speaker 6

I'd love to get his thoughts, if he is on the changes that were instituted on coming in to sort of get this thing going, hopefully in the near term? And then I think you highlighted the 8 sites being the highest enrolling sites. What does that mean since no one's been enrolled yet?

Speaker 2

Yes. So I can comment on the last part. So it's a total of 8 sites. The final four site initiation visits are occurring this month, meaning August, so then there'll be enrollment ready. Of these final sites, they are the highest enrolling sites.

Speaker 2

So there'll be enrollment ready by the close. Our goal is by the close of August. The first initial sites that are now

Speaker 6

What does high enrolling sites mean in a trial that hasn't enrolled anybody? I don't mean to pick on it, but what do you mean highest enrolling sites? You think they'll be the highest enrolling?

Speaker 2

Yes. Well, these are the non specialty sites. So as we mentioned earlier, the initial 2 of the 3 are specialty sites that are focused on maybe cardiothoracic surgery, maybe younger patients where the patient flow is going to be much lower and the screening process and volumes can be much lower. The balances of these sites are unlike those 2 original sites where the volumes in both screening and enrollment will be higher just based off of the pure patient population that they have that fits our criteria. Also based off of the feasibility of the study parameters that they filled out in order to be included within the study.

Speaker 2

So that's according to them and our assessment of them. Beyond that, I think your question Jim was what are some of the changes or modifications that might have been occurred since Doctor. Aslam has joined the company? Call. Yes.

Speaker 2

And he's not on the call.

Speaker 1

He

Operator

is not on

Speaker 4

the call at this time. But yes, he's really he knows some of these folks. He comes from this world. I'm an anesthesiologist pain specialist. He's a nephrologist, knows CRRT extensively and knows a lot of folks in this area.

Speaker 4

So he's really handholding a lot of these sites and getting them

Operator

just

Speaker 4

pushing and urging and getting them through this contracting budgeting phase so that we can get on to the more fun enrollment part of things. So and that's just a critical part of this is relationships and just his deep knowledge in this field.

Speaker 1

Jim, did that answer your question on the first part of your question? No, I want to make sure we answer that in terms of highest enrolling because the highest enrolling haven't started screening yet. That's coming at the close of this month. Is that just to make sure we're answering that question?

Speaker 6

Yes. I guess the highest enrolling is sort of an aspirational name for them. I guess they will be the highest enrolling once you start enrolling.

Speaker 2

Well, I can give you an idea based on the feasibility study. These particular institutions feel they have the ability at 400% times what I'll call the low enrolling sites would be.

Speaker 4

Yes. There are site questionnaire. Yes. I mean, all the sites had to fill out their feasibility questionnaires at the beginning of the study. And these were the ones that we asked, how many CRRT patients are you seeing per week that would fit into your inclusion, exclusion criteria of the protocol.

Speaker 4

So we already knew ahead of time, again, just a little bit unlucky that the two sites that we knew would be low enrolling happened just to be the ones that got up and running first.

Speaker 3

Right.

Speaker 1

So it's not our guests, Jim. This is based on their feedback us and the questionnaires that we sent to them when we get this process started with an institution. Does that make sense?

Speaker 6

Yes, yes. I guess in that respect it does. I appreciate very much the clarification, gentlemen and lady.

Speaker 2

I think it's also important, Jim, that you might ask and if I was an investor or someone evaluating, so why would you again we read it, we said before, why would you include potentially some lower enrolling sites? It's again because of the quality of the PI, the influence of the PIs, their involvement with international guidelines and domestic guidelines, the fact that they are the key thought leaders in this, even though they might have a smaller patient population that is streaming to their particular facility. That's 1. And 2, with some of these, in particular these 2, they give you the diversity of patients that I think could be important in the data set. It is interesting as Doctor.

Speaker 2

Palmer mentioned that of these 2 more unique sites that they were the first 2 up and ready to screen.

Speaker 6

Thank you very much. Thank you, Jim.

Operator

Thank you so much. And there are no further questions at this time. I would like to turn it over to Vincent Goede for closing remarks.

Speaker 6

Yes. Thank you, Leeway. And again, thanks

Speaker 2

to all of you who are joining us today and for your continued support. We remain absolutely focused on controlling our spend and driving shareholder value through the execution of the NEFRA study and to make NIAID available to health care providers and their patients, again, if approved. Please feel free to contact us after the call if you have any additional questions, and we look forward to sharing our future developments. We have high expectations moving forward. Thank you.

Operator

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for

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