Astria Therapeutics Inc (ATXS) 2015 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Catabasis Pharmaceuticals Third Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, there will be a question and answer session and instructions will follow at that time.

(Operator Instructions)

I'd now like to turn the conference over to Andrea Matthews, Executive Director of Corporate Affairs at Catabasis. Ma'am, you may begin.

Thank you, Shannon. Welcome to today's conference call to provide a corporate update for Catabasis Pharmaceuticals and to review our third quarter 2015 financial results. With me today from Catabasis management are Jill Milne, Chief Executive Officer; Ian Sanderson, Chief Financial Officer; Joanne Donovan, Chief Medical Officer; and, Rick Modi, Chief Business Officer.

I would like to note that during today's call we will make statements related to our business based on current and future expectations that may be considered forward-looking statements under federal securities laws. Actual results may differ materially from those indicated by these statements as a result of a variety of risks and uncertainties, including those discussed in our most recent quarterly report on form 10-Q, which we filed this afternoon with the SEC, and is also available on our website.

Such statements represent our judgment as of today, and Catabasis undertakes no obligation to publicly update any forward-looking statements except as required by law. With that, let me pass the call over to Jill Milne, chief executive officer, for the corporate update.

Thank you, Andrea. Good afternoon, everyone and thank you for joining us today for our corporate and financial update for the third quarter of 2015. This is our first quarterly conference call as a public company. I'd like to thank everyone on the phone who supported our IPO, and we are looking forward to keeping you updated on our progress on this and future calls.

Today, I will highlight the important progress we have made in both of our clinical stage programs. Joanne Donovan, our chief medical officer, will give an update on our ongoing MoveDMD trials for CAT-1004 in Duchenne muscular dystrophy, and discuss our Phase 2a trial design for CAT-2054 in Hypercholesterolemia, which is now actively recruiting. Ian Sanderson, our chief financial officer, will provide a review of our financial performance for the third quarter of 2015.

For those new to Catabasis, we have two programs active in the clinic. CAT-1004 for Duchenne muscular dystrophy, and CAT-2054 for Hypercholesterolemia. Underlying these clinical programs is an innovative technology platform we call our SMART Linker Technology Platform. SMART stands for Safely Metabolized and Rationally Targeted. This approach enables simultaneous intracellular delivery of two or more bioactives, resulting in the modulation of multiple targets in the disease pathway.

Catabasis aims to develop novel therapies by leveraging our technology to target difficult-to-drug disease pathways. Behind our lead clinical programs we also have a pipeline of preclinical candidates for the treatment of rare diseases. We are developing CAT-1004 as a potential disease modifying therapy that may regenerate muscle in patients affected by Duchenne muscular dystrophy.

CAT-1004 inhibits activated NF-kappaB, a key protein in muscle health and regeneration. In boys affected by Duchenne, activated NF-kappaB leads to muscle inflammation, fibrosis, and degeneration, as well as inhibits muscle regeneration. We believe that CAT-1004 has the potential to slow disease progression in boys affected by Duchenne across age groups and in all genetic mutations.

While we're developing CAT-1004 initially as monotherapy, we believe that it has the potential to be used in combination with the dystrophin replacement therapies, as well as other therapies that are currently in development. CAT-1004 has the potential to become a foundational therapy in DMD. In July, we received Fast Track designation from the FDA. In September, we received Rare Pediatric Disease designation for CAT-1004 for the treatment of DMD from the FDA. And, in October, the European Commission granted Orphan Medicinal Product designation for CAT-1004 for the treatments of DMD.

As a company, we are focused on rare diseases and plan to commercialize CAT-1004 ourselves, in North America, and potentially worldwide. CAT-2054 is a SREBP modulator that we're developing for hypercholesterolemia. SREBP is a master regulator of lipid metabolism that impacts LDL, triglycerides, and glucose, and has the potential to impact liver fat and hepatocellular carcinoma.

CAT-2054 is our second generation SREBP modulator which we have advanced to the clinic following Phase 2 clinical proof of concept with our first generation molecule CAT-2003. CAT-2054 is designed with a more stable linker than CAT-2003, in order to deliver more of the parent conjugate to the liver where it may have a direct and more potent impact on LDL cholesterol and other lipid parameters.

We just announced top-line - positive top-line data from our CAT-2054 Phase 1 trial in August. In July, we entered into a sponsored research agreement with the University of Texas Southwestern to further study SREBP modulators and our CAT-2000 series of molecules in hyperlipidemia and NASH. As a reminder, our strategic plan is to find a partner and out-license CAT-2054 prior to Phase 3.

Now, I will turn the call over to Joanne Donovan, chief medical officer, to provide an update on our MoveDMD trial with CAT-1004 and to review our plans for our CAT-2054 Phase II trial.

Thank you, Jill. Good afternoon, everyone. We're currently conducting the MoveDMD trial, a Phase 1/2 clinical trial of CAT-1004 for the treatment of Duchenne muscular dystrophy. This trial is enrolling boys, age 4 to 7, affected with Duchenne across all mutation types, and who are currently not taking steroids. We started dosing patients in June. We'd like to thank all of the boys and their parents and caregivers who have participated in the trial to date.

We're pleased with the response that we have received from patients and their families. We very much appreciate their interest in this study, as well as the outreach efforts from advocacy organizations. There are three cohorts in the 7-day dose ranging Part A of the trial, and we've completed cohorts one and two. We are currently completing patient scheduling for the final cohort. We expect to release results from Part A of the MoveDMD trial in early Q1 2016, which will include safety, tolerability, and pharmacokinetics.

Assuming adequate safety, tolerability, and pharmacokinetics in Part A of the trial, we intend to initiate the 12-week double-blind, placebo-controlled efficacy Part B portion of the MoveDMD trial in the first half of 2016, and expect to report efficacy data from Part B in late 2016. We expect that our primary endpoint for Part B of the MoveDMD trial will be MRI with age-appropriate timed functional tests as secondary endpoints.

These timed functional tests will be 10 meter walk/run, the time to stand, and the time to climb four stairs. We're also piloting three biomarker assays of NF-kappaB in Part A, and may bring one or more of these into Part B. Our other active clinical program is CAT-2054. We're actively recruiting in a 4-week, Phase 2a randomized double-blind, placebo-controlled trial of CAT-2054 in Hypercholesterolemia, and we expect to begin dosing this quarter.

We plan to enroll a total of approximately 150 patients, who will be randomized to doses of 250 milligrams qd, 400 milligrams qd, 250 milligrams bid, 400 milligrams bid of CAT-2054 or placebo, all in addition to a stable dose of a high-intensity statin, Atorvastatin 40 mg. The primary efficacy endpoint for this trial will be percent reduction in LDL cholesterol.

We will also explore the activity of CAT-2054 on other metabolic parameters, such as triglycerides and glucose. We expect to report data from the CAT-2054 Phase 2a trial in the third quarter of 2016. Ian Sanderson, chief financial officer will now provide an update on our financials for the third quarter of 2015.

Thanks, Joanne, and hello everyone. Our press release this afternoon provides details of the financials for third quarter, so I'll just provide a brief summary. We completed our IPO in June of this year and raised $69 million gross of expenses, $62 million net of expenses. As of September 30th, we had $73 million of cash and equivalence, which we expect to provide us runway through Q1 of '17, consistent with our guidance at the time of the IPO.

Importantly, we expect that our current cash balance will fund us beyond both the CAT-1004 MoveDMD Part B readout in late 2016, and the CAT-2054 Phase 2a readout in the third quarter of '16. In the third quarter of 2015, our operating cash burn was $7.8 million, and we expect that burn rate to increase in Q4. As for the P&L details, we spent $5.8 million in R&D in Q3, an increase of $1.3 million over our R&D spend in the year ago quarter.

The increase was primarily due to the initiation of the CAT-1004 MoveDMD trial in June of 2015, and expansion of our research development and clinical teams. Our G&A expenses were $2.4 million in Q3, and that's an increase of $1 million over our G&A spend a year ago. This increase was primarily due to increased G&A head count and increased consulting and professional expenses.

Our operating loss was $8.2 million in Q3, and that's an increase of $2.2 million versus the year ago quarter. Our net loss for the quarter was $8.5 million, or $0.55 per share, and that's an increase of $2.5 million over our net operating - net loss in Q3 of 2014. For the 3rd quarter, our weighted average common shares outstanding was $15.3 million. Additional financial information is available in our 10-Q which we filed with the SEC earlier today. That concludes our prepared remarks, and we'll now be happy to take your questions. Shannon, can you please repeat the instructions and poll for questions? Thanks.

Thank you. Ladies and gentlemen, if you wish to ask a question at this time, please press star, then one, on your touchtone telephone. If your question has been answered or you wish to remove yourself form the que, please press the pound key. Our first question is from Christopher Marai with Oppenheimer. You may begin.

Hi, guys. Congratulations on the quarter and thanks for taking the questions. So, you know, first, I was wondering if you could perhaps help us understand some of your clinical path forward in DMD with - with really, respect to, I guess, clinical (inaudible) you might be looking at, and patient enrichment strategies. I mean, obviously, we're well aware that, you know, certain patient populations with certain endpoints are very difficult to detect signals in terms of drug benefit, you know.

But I think there's some pretty compelling evidence on MRI markers for either enrollment criteria or otherwise. And then, again, I guess with respect to your drug, there's also some interesting information about inflammation and MRI markers. I'm wondering how you're looking, really, to use that data to help inform, you know, potentially pivotal trials going forward on inpatient enrollment criteria. Thanks.

Thanks, Chris. This is Jill. I'm going to hand it over to Joanne Donovan, our chief medical officer, to more fully answer that question.

Thanks, Chris, for the question. It's a great point. How do we make the trials homogeneous so that we can better detect a signal? Our signal that we're looking for - our primary endpoint in the study will be MRI. And the reason that we have chosen that is because MRI is a signal that is very sensitive to inflammation, particularly in these young boys.

In these young boys, the - both the MRI, as well as timed functional tests, are relatively homogeneous, so that will allow us to have a greater power in the study. We know that it will be the timed functional tests that will ultimately be the endpoint in our Phase III studies. So, while we are powering the studies for MR in this Phase 1/2 study, this will enable us to rapidly gain proof of concept and then use the timed functional tests in order power appropriately our Phase 3 study. So, that's how we're thinking of the development in this group of boys.

OK, that's helpful. And then, just with respect to, I guess, the MRI marker of inflammation. Would you be benchmarking that against, sort of, a natural history, placebo, or possibly, you know, sort of, the use of steroids? Thanks.

So, the - we will be benchmarking it against placebo. Our 12-week Part B study is a placebo-controlled study. But, we also are fortunate - we are working with Imaging DMD, which has great deal of natural history, both in these boys over a range of years, but importantly, also what happened when they were started on steroids. So, we've used that data to be able to power this and plan for this Phase 1/2 study. So, we think that given that we have derisked the study in important ways by using that data on what happens to the T2 MR signal when - within - with changes in inflammation.

OK, great. And, one quick follow-up just - so, given your comments, is it pretty safe to assume that, you know, a 6-minute block test might not be the primary endpoint as some of your trials going forward? And, do you know if the FDA is on board with some of those other timed function tests? Thank you.

That's, obviously, a very - a key question in this field. We are using the timed functional tests that are appropriate for this younger age group. In fact, in a 4-year-old the 6-minute walk isn't really a measure of anything but attention. And, in the recently released draft FDA guidance, the FDA points to these timed functional tests as being appropriate in this younger age group. So that's exactly where we're guided from.

Got it. Thanks. Congrats on the progress.

Thanks.

Thank you. Our next question is from Jeff Chen with Cowan and Company. You may begin.

Hi. Congrats on hosting your first earnings call, and thanks for taking my questions. So, perhaps one question on 1004. It seems like the data is pushed out just a little bit here. Could you just provide us with an update in terms of is it a cohort 3? Was it enrollment was lower, or just scheduling conflicts?

Enrollment has really been on track for Part a, even with two of the three expected sites up and running. And, we don't really anticipate that this is going to be an issue for Part b. As I mentioned, we've really been gratified with the response from patients. We are now completing scheduling for the final cohort, but there - we're conscious of scheduling issues that may crop up over the holidays. And, so we're guiding to results in early 2016, rather than in late 2015.

That makes sense. Thanks. And, in terms of 2054 in hypercholesterolemia, can you give us a sense of what type of data you're looking for in terms of additional LDL lowering, on top of statin background?

Sure. So, in addition to looking at effects on LDL cholesterol, we'll also be looking at other metabolic parameters. So, things like triglycerides, and we'll also be looking at glucose. So, two parameters that are known to be modulated by SREBP, and that we saw move in our Phase 2 studies with our first generation molecule CAT-2003.

Thank you very much.

Thank you. Our next question is from Joel Beatty with Citi. You may begin.

Hi. Good afternoon, and thanks for taking the questions. You know, I guess, with the trials wrapping up, maybe just a quick question on expenses. And, if you'd comment on, you know, how you expect the expenses to ramp up while the, you know, trial enroll?

Yes. I'll let Ian answer this.

Yes. I'm not sure I want to give projections for 2017, which is when the trials will ramp up. But, you know, are consistent with what we said at the time of the IPO. We expect our current cash to carry us through - all the way through '16 and through Q1 of '17. So, we'll have a bit of runway after we get through both of these Phase 2 readouts. Does that help you at all?

Yes, yes, sure. That sounds good. Thank you.

Thank you. (Operator Instructions) Our next question comes from Heather Behanna with Wedbush. You may begin.

Hey, guys. Thanks for taking the question. Just a quick chat - 1004 question. When you think about getting, sort of, a safety read in early 1Q for the three doses, how are you thinking about those selections for the Phase 2? Is it something that you'll want to probably just take the two highest, as long as it's tolerable and safe to push it? Or, are you thinking maybe of going lower and higher as far dose ranging, assuming that everything looks OK on the tolerability front?

Hi, Heather. Yes. So our intention would be take the two highest doses, assuming good safety and tolerability, and really try to maximize the efficacies seen in the Part B of the study.

Great. Thanks.

Thank you, and I'm showing no further questions at this time. I'd like to turn the call back over to Jill Milne for closing remarks.

Thank you, Shannon, and thank you to everyone for being on the call today. In summary, 2015 has been, and will be, an eventful year for Catabasis. In Q3, we received key designations for our CAT-1004 program in DMD, with both Fast Track and Rare Pediatric Disease designations from the FDA. And, in October, Orphan Medicinal Product designation from the European Commission.

We made important progress in Part A of the MoveDMD trial, and are now completing patient scheduling for the final cohort. We expect to release safety, tolerability, and pharmacokinetics results from the seven days of dosing in Part A in early Q1 2016, and expect to initiate Part B in the first half of next year.

We also entered into a sponsored research agreement with UT Southwestern to explore our CAT-2000 series of compounds in hyperlipidemia and NASH. And, we're actively recruiting in our Phase 2a trial of CAT-2054 in Hypercholesterolemia and expect to begin dosing later this quarter.

Thank you for joining us on today's call, and for your support of, and interest in, Catabasis. Andrea?

That concludes today's call. A replay of the call will be available at the dial-in number listed in the press release, and a webcast replay will be available for 90 days via the investor relations page on our website at www.catabasis.com. Thank you.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation and have a wonderful day.