Astria Therapeutics Inc (ATXS) 2017 Q2 法說會逐字稿

Welcome to the Catabasis Pharmaceuticals' Second Quarter 2017 Earnings conference call.

(Operator Instructions)

As a reminder, this conference is being recorded.

I would like to introduce your host for today's conference, Andrea Matthews, Executive Director of Corporate Affairs. Ma'am, you may begin.

Welcome to today's Catabasis Pharmaceuticals conference call where we will provide a corporate update and review our second quarter 2017 financial results. With me today are Jill Milne, Chief Executive Officer; Joanne Donovan, Chief Medical Officer; Ted Hibben, Chief Business Officer; and Andrew Nichols, Chief Scientific Officer. We issued a press release after the market close today summarizing our corporate update and our Q2 2017 financial results, which we will reference on today's call. This press release is available on our Web Site.

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 that were 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 Web Site. 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, who will provide our corporate update. Joanne Donovan, Chief Medical Officer, will then provide an update on our clinical programs for edasalonexent and will be followed by Andy Nichols, Chief Scientific Officer, who will provide an update on research. Jill will then wrap things up with the financial update. Jill?

Thank you, Andrea. Good afternoon, everyone, and thank you for joining us today for our update on second quarter 2017 financial results and recent business progress. This year, we've been focused on advancing our lead candidate edasalonexent and further developing a strong rare disease pipeline to drive long-term sustainable growth. In the second quarter, we made important advancements across our portfolio including presenting the complete analysis of Phase 2 data from our edasalonexent program and making good progress in our rare disease pipeline.

We are very excited about edasalonexent's potential as a novel disease-modifying foundational treatment for Duchenne muscular dystrophy. We believe it has the potential to be effective regardless of the underlying mutation both as monotherapy and in combination with dystrophin-targeted therapies. As we look forward to presenting our 24-week data, we are enthusiastic about progressing edasalonexent into Phase 3 and our finalizing the design of this trial. In edasalonexent Move DMD 12 weeks Phase 2 results, we are very pleased to have seen clinically meaningful improvements in well-established assessments of muscle function.

Two different pre-specified analyses of the 12-week edasalonexent data show consistent numerical improvements in five assessments of muscle function. As a reminder, the five assessments of muscle function in the Move DMD trial are the 10-meter walk/run, the 4-stair climb and time-to-stand, the North Star Ambulatory Assessment and the PODCI. The first analysis in which boys treated with edasalonexent were compared to placebo was presented in March. The second analysis was a crossover analysis. In this analysis, rates of change across assessments of muscle function during an off treatment period prior to dosing were compared to edasalonexent treatment for 12 weeks.

This analysis was presented at the American Academy of Neurology's 69th Annual Meeting in April. The results showed that 12 weeks of edasalonexent slowed the rate of decline in functions by at least 45%. In both placebo controlled and now the crossover analyses, a meaningful slowing of disease progression was seen consistently across assessments of muscle function in boys treated with edasalonexent.

The therapeutic goal of treatment of Duchenne is to delay the predictable sequential loss of function in boys affected by the disease. Patients and families have indicated that a slowing of disease progression is the most important aspect of a desired therapy. Improvements in the assessments of muscle function in the Move DMD trial are informative as these assessments have precedence as endpoints in pivotal trials in DMD.

Impaired ability to hop, run or jump can be seen as early as age four. And most boys affected by Duchenne lose their ability to walk by their early teens. In boys treated with edasalonexent, we observed consistent slowing and disease progression across both the placebo controlled and the crossover planned analyses of functional assessments. We believe that these data support edasalonexent's potential as a novel disease-modifying treatment for boys with DMD and advancement to a Phase 3 trial.

In the third quarter of this year, we plan to report from the open label extension portion of the trial evaluating edasalonexent after 24 weeks of dosing. From these results we will gain additional information on key functional assessments as well as on longer-term safety and tolerability. These data along with discussions with regulators will guide our work to finalize the design of our Phase 3 edasalonexent clinical trial in DMD in the second half of this year.

In addition to edasalonexent, in the second quarter we advanced our work on our other rare disease pipeline programs, focused on cystic fibrosis and neurodegenerative diseases such as ALS and Friedreich's ataxia. Andy will provide an update on these programs shortly. But first, I'll ask Joanne Donovan, our Chief Medical Officer to provide a more detailed update of our edasalonexent clinical program.

Thank you, Jill, and good afternoon, everyone. Edasalonexent is an oral small molecule we are developing to be a potential disease-modifying therapy for all patients affected by DMD, regardless of their underlying mutation. We designed edasalonexent to inhibit NF-kB a protein that is activated in DMD and drives inflammation, fibrosis and muscle degeneration, while suppressing muscle regeneration.

We're currently evaluating the edasalonexent in the third and final phase of our Move DMD trial, an open label extension that's designed to collect a large amount of data on edasalonexent in boys who are enrolled at ages four to seven affected by Duchenne. The open label extension portion of the trial is progressing as planned, and a number of boys have now been on edasalonexent for more than a year.

As Jill shared, we are very encouraged by the data at 12 weeks across the five functional assessments, the 10-meter walk/run, 4-stair climb, time-to-stand, the North Star Ambulatory Assessment and the PODCI. And we look forward to sharing the results of 24 weeks of edasalonexent treatment in the third quarter. As we prepare for the next steps with edasalonexent, we're engaging with regulatory authorities to discuss plans for our Phase 3 clinical trial. We anticipate that the same assessments of muscle function that we've been collecting in the Move DMD trial will be the key endpoints in the upcoming Phase 3 trial. Declines in the speed of these measures of walking, running and stair climbing predict later loss of functional abilities.

We expect to announce our Phase 3 clinical trial plan for edasalonexent in DMD in the second half of 2017, and this plan will include input from regulators and will be informed by the 24 week edasalonexent treatment data.

I'm also pleased to share that the first boy in the open-label extension, who is amenable to exon 51 skipping has started EXONDYS 51 treatment, while continuing edasalonexent. We will continue to follow boys that take both edasalonexent and EXONDYS 51 to evaluate safety and learn more about the potential of combination therapy.

The Catabasis and Sarepta joint research collaboration previously showed increased dystrophin expression with edasalonexent in combination with an exon-skip modality in preclinical studies. Edasalonexent may have the potential to increase dystrophin levels in combination with dystrophin-targeted therapy.

All boys participating in the open-label extension have now transitioned to the 100 mg/kg/day treatment group. At this point, there has been more than 25 years of treatment experience with edasalonexent, no safety signals were seen in the placebo-controlled portion of the Phase 2 trial in the boys in either the 67 mg/kg/day or 100 mg/kg/day treatment groups. And this has allowed us to move all boys to the higher dose in the open-label extension.

We've submitted an amendment for IRB approval to further extend dosing with edasalonexent for an additional year, so that boys that are participating in the open-label extension can continue to receive edasalonexent. In this amendment, in light of the safety experience to date, we've been able to reduce the frequency of ongoing safety monitoring and patient visits as the study has progressed. And we're pleased to be able to reduce the travel and visit burden on the boys, their families and the sites.

In the open-label extension, the boys and their families have continued to travel to study sites, sometimes across the United States in order to continue to participate in multiple assessments. And they've been extremely diligent with their treatment. The continued participation of these boys and their families in our study is deeply appreciated. The Move DMD trial would not be possible without their support and that from their physicians, our trial investigators, and our staff and the Duchenne community.

I'll now ask Andy Nichols, our CSO, to provide an update on our rare disease preclinical programs.

Thank you, Joanne, and good afternoon everyone. As Jill mentioned, this quarter we presented new preclinical data from our CAT-5571 program, highlighting potential benefit on bacterial clearance in cystic fibrosis. CAT-5571 activates autophagy, a process that maintains cellular homeostasis and host defense mechanisms, and which are known to be impaired in patients with CF.

At the European Cystic Fibrosis Society Conference in June, we presented the effects of CAT-5571 on the clearance of two bacterial pathogens that are leading causes of morbidity and mortality for patients with CF, namely Pseudomonas aeruginosa and Burkholderia cenocepacia. This bacterial clearance functionality of CAT-5571 may represent a potential novel approach for treating CF. And importantly, we've shown CAT-5571 enhances the clearance of multiple types of bacterial infections in preclinical models of CF.

Pseudomonas is a common pathogen in the lungs for CF patients, and is associated with more aggressive decline in pulmonary function. Prevalence is high, and once acquired almost always results in chronic infection. We're continuing preclinical evaluation of CAT-5571, and are currently conducting IND-enabling activities. We expect to initiate a Phase 1 clinical trial with CAT-5571 in 2018.

Our SMART Linker drug discovery platform has enabled us to engineer conjugates to target intracellular biological pathways in a novel way that results in synergistic biologic effects on product candidates with patentable compositions of matter and methods of use.

I will now turn the call back over to Jill for a review of our second quarter financials.

Thank you Andy. Turning to our financials, our second quarter 2017 press release provides the details. So I will provide a brief summary. As of June 30, 2017, we had $29.4 million of cash and cash equivalents, which we expect to be able to fund operating expenses, debt service and capital expenditure requirements based on our current operating plan for at least 12 months from today. This is well beyond the expected upcoming Move DMD open-label extension results and announcement of the Phase 3 plan for edasalonexent.

In the second quarter of 2017, our net cash used in operating activities was $5.7 million. Our R&D expense was $4.5 million in Q2 2017 compared to $6.8 million in Q2 2016, a decrease of $2.3 million. The decrease in research and development expenses was primarily attributable to the completion of certain clinical activities.

Our G&A expense was $2.4 million in the second quarter of 2017. Our operating loss was $6.9 million in Q2 2017, a decrease of $2.5 million versus Q2 2016. Our net loss was $7 million or $0.32 per share in Q2, a decrease by $2.4 million compared to our net loss in Q2 2016.

For the second quarter, we had weighted average common shares outstanding of 21.8 million. Additional financial information is available in our 10-Q, which we filed with the SEC earlier today.

As I reflect on the first half of 2017, I'm very proud of what we've accomplished. I'm incredibly excited about edasalonexent's potential as a novel foundational treatment for Duchenne Muscular Dystrophy. We were seeing clinically meaningful improvements across assessments of muscle function in boys treated with edasalonexent as a monotherapy. And we have initiated the addition of Exondys 51 treatment for the first boy amenable to exon 51 skipping in the Move DMD open-label extension.

We look forward to sharing results in boys after 24 weeks of treatment in the third quarter and communicating plans for our Phase 3 clinical trial of edasalonexent in the second half of this year. We're also making great progress in our other rare disease programs. We demonstrated clearance of an additional bacterial type with CAT-5571 and are encouraged by the results of our preclinical studies supporting its potential as an oral treatment for cystic fibrosis.

And we continue to advance our research focused on rare neurodegenerative diseases powered by our SMART Linker drug discovery platform, that has repeatedly enabled us to engineer novel product candidates. I'm continuously overwhelmed by the outpouring of appreciation and support from the boys and their families in our Move DMD trial, their resilience in the face of ongoing challenges inspires us every day.

It is with their commitment to support of our partners and investigators and the dedication of our employees that we together pursue our mission of bringing life-changing therapies to patients affected by rare diseases.

With that, I'll ask the operator to open up the call for your questions.

(Operator Instructions)

Phil Nadeau from Cowen.

First on the Phase 3 trial, I'm curious whether you currently have any endpoints that you prefer over the others. And I guess what do you need to still see from the open label extension I guess to further inform your choice of the program point?

I'll have Joanne finish if I leave anything out.

In terms of what we're looking for in the 24-week data from our open label extension what we've said in the past and continues to be the case, we're looking for persistence of the signal that we've seen on the functional assessments performed in the Move DMD trial. And of course, in addition, continued good, safety and tolerability in this program. As for endpoints, I'll let Joanne answer, but of course those endpoints certainly would be informed by the data coming from the 24-week assessment in the open label.

We haven't finalized the decision yet. We expect that it will be one of the assessments of muscle function that we have been using in the current studies that are have been used as pivotal endpoints in other studies, and we don't expect that it would be time-to-stand, because this measure is more variable. We do expect to share the plans for the Phase 3 trial design including the endpoint in the second half of the year.

On the boy who is on EXONDYS 51 currently, do you have the ability or do you plan to look at dystrophin levels in that patient?

In that current study, we're looking at safety at this point, and that is in anticipation of being able to enroll boys on stable doses of EXONDYS 51 in the Phase 3 study. We wouldn't specifically be looking at dystrophin levels in this study.

Joel Beatty from Citi.

Hi, this is Shawn calling in for Joel. Thank you for taking my questions. I have a few on the open label extension of Move DMD. What are the age range of the boys in the open label extension and in the approval of the longer open label extension, are there more critical milestones that you expect to occur during that time span that could be delayed and are there any that we should really be looking out for?

So what we are looking for as Jill mentioned is the persistence of the signal, and particularly what we're looking for is, we've seen the rate of decline in an off- treatment period in the first part of the study and we'll be able to continue to look at for a separation between the open label extension functional data and compare it to the extrapolated our control period.

Now the boys were ages four to their eighth birthday on entering the study, so now the boys are a year older, clearly, so they are boys that we have boys in the eight and nine age range. So we will be recording changes in their functional measures as well, but we are really focused on the velocity, the speed of the functional measures that we've highlighted as well as the North Star and PODCI and how they change over the open label extension period.

And in the open label, just as a quick follow-up in the open-label data readout, what do expect to see, will there be any additional T2, fat fraction data and is the patient in the combination, will there be any data from that patient as well?

So, we are continuing to collect MRI, T2 and fat fraction data. We don't expect the fat fraction data to change substantially until more like the 6 to 12 month range. So we won't necessarily be highlighting that, we won't have that in all of the boys at the longer time range, but we will continue to collect that and be reporting some of that data.

And then the follow-up question about the boy on EXONDYS -

we will continue in him as well to be collecting those data.

Right. Yes, but, in the open label extension I think what you're asking John was, would we have any data about the combination at the time that we release data from the open label, and that boy just went on to EXONDYS 51, so that would be at a later time.

Carol Werther from H.C. Wainwright. Your line is open.

Also on the combination treatment, in this open label portion, do you expect to add more boys to be on the combination and how many -- if so how many are eligible?

In the extension we're not anticipating increasing enrolment, but what we are doing is planning towards the Phase 3 study and based on the safety for the combination therapy, we would anticipate enrolling boys that are on stable doses of EXONDYS 51 in the pivotal trials. Just to remind you, that's about 13% of the population. So this is a small fraction of the overall population of boys in this age group.

We're not expecting to see more boys on the combo near-term, we just have this one patient?

We have boys in the study, but it's a small fraction of the overall enrollment, since it's about 13% of the population.

And then, just in terms of measurement of dystrophin and what your thoughts are there and for -- planning for the pivotal trial, are you going to include that and which measures do you think are most appropriate if you are?

We think that the boys of course in general don't have any dystrophin. And this offers a potential mechanism to enhance dystrophin production in patients that are on dystrophin focused therapy, so potentially an additional benefit. We haven't finalized the design of the Phase 3 study. So we will be considering how to evaluate those patients in the Phase 3 study and analyze those. But we're not -- we will be announcing more detail for a Phase 3 plan after the year.

And when the data releases come in the second half, are there going to be press releases. Or do you think there will be presentations at medical meetings?

We expect probably some combination of those two.

(Operator Instructions)

Ted Tenthoff from Piper Jaffray.

Obviously the focus is on DMD and I'm looking forward to the data coming in the back half. But I just wanted to sort of touch base on some of the other programs that were highlighted at the R&D day. Does the recent Vertex data in triple therapy and both homozygous and heterozygous F508del change sort of the urgency with that program and I just want to kind of get an update on sort of some of the other efforts at the company.

I can start, then hand over to Andy.

Certainly the Vertex data was incredibly exciting and I think in particular exciting for the patient population. It certainly doesn't change our urgency, I can assure you, we are feeling very compelled to get our program into the clinic and into patients as quickly as possible, and so as soon as we can in 2018 we hope to be in the clinic with CAT-5571.

And I think this could be a really novel approach to treating patients with cystic fibrosis that we believe has great potential as monotherapy, but also it could be quite useful in combination with germs like the Vertex ones. And I can hand it over to Andy to talk a little bit about that and what else is going on in the pipeline like with CAT-4001 as well.

Our focus actually on the CAT-5571 for a while now, has actually been much more directed towards the enhancement of host defenses. Autophagy is a key regulator of host defense mechanisms and in cystic fibrosis, autophagy is suppressed and host defense mechanisms are suppressed.

And we have demonstrated the CAT-5571 can enhance autophagy and can enhance host defense mechanisms. And that enables the macrophages and the epithelial cells that actually clear that the common infectious microorganisms, which are present in cystic fibrosis and which ultimately cause the inflammation and the loss in lung function over periods of time.

Again we're actually very excited about the data of Vertex and particularly for the patients. But we believe our approach will actually significantly add onto the top of that because it's independent of any potential effect on the CFTR.

I share your enthusiasm. I do agree that the Vertex data, I know it's impressive. And I still think there's going to be even more room for improvement for those patients so I appreciate all we've covered and I'm looking forward to data in back half.

At this time I'm showing no further questions.

Thank you, all, for joining our call today and for your continued support of Catabasis. We look forward to speaking with you again soon and keeping you updated on our progress throughout the remainder of the year. Have a good evening.

That concludes today's call.

A webcast replay will be available for 90 days via the Investor Relations page on our Web Site at www.catabasis.com.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect.