Brickell Biotech Inc (BBI) 2021 Q2 法說會逐字稿

Greetings, and welcome to Brickell Biotech, Inc. Q2 2021 Financial Results Call. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Garth Russell with LifeSci Advisors.

Thank you, operator, and good afternoon, everyone. Joining me on today's call are Brickell's Chief Executive Officer, Rob Brown; Chief Financial Officer, Bert Marchio; Chief R&D Officer, Deepak Chadha; and Chief Operating Officer, Andy Sklawer.

Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and other periodic reports on Forms 10-Q and 8-K filed with the SEC.

I would now like to turn the call over to the company's Chief Executive Officer, Rob Brown. Rob, the floor is yours.

Thanks, Garth. Good afternoon, everyone, and thank you for joining our call today. So far, 2021 has been a tremendously productive year for the entire Brickell team. As we've executed against our strategy to advance sofpironium bromide through our pivotal Phase III program as a potential best-in-class treatment option for primary axillary hyperhidrosis, also known as excessive underarm sweating.

First off, we announced -- we recently announced that we completed enrollment in both of our Phase III pivotal clinical studies, Cardigan I and Cardigan II, respectively, and that the last hyperhidrosis patients completed all scheduled visits in the Cardigan I study. We expect the last hyperhidrosis patient in the Cardigan II study to complete their final visit this month.

Accordingly, we remain on track to receive and concurrently announced top line results for both Cardigan studies in the fourth quarter of this year. Secondly, as many of you are aware, we recently completed a financing of approximately $8.1 million. With this infusion of capital, we now expect to have sufficient cash to fund our operations beyond the potential NDA submission for sofpironium bromide gel, 15% to the U.S. FDA, which is anticipated to occur in mid-2022, pending the Phase III results.

Turning now to updates from Japan. Kaken is still in the very early stages of its commercial launch of ECCLOCK or sofpironium bromide gel, 5% for the once-daily treatment of primary axillary hyperhidrosis in Japan. The ECCLOCK launch is an important milestone for both companies as Japan is the first country to approve sofpironium bromide for any indication, and ECCLOCK is the first topical prescription product for the treatment of primary axillary hyperhidrosis in the country.

In addition to the benefit of Kaken building a regulatory and commercial track record for sofpironium bromide, Brickell currently receives royalties based on a percentage of net sales of ECCLOCK in Japan and is also entitled to receive sales-based milestone payments.

We are encouraged by Kaken's early sales progress as well as their continued investment in the commercial ramp-up of ECCLOCK, disease state awareness and life-cycle management activities. Along those lines, this brings me to the most recent news of Kaken. In June, Kaken initiated a Phase I clinical study, exploring the pharmacokinetics, safety and efficacy of sofpironium bromide gel in patients with primary palmoplantar hyperhidrosis or excessive sweating of the palms and soles. This is an extremely embarrassing and anxiety provoking dermatological disorder that commonly interferes with the social and professional aspects of daily life, and there are currently no approved topical prescription treatment options for this disease in Japan or the United States.

We look forward to seeing the results of this Phase I study, which will help us and Kaken determine next development steps, if any, in this new potential indication.

Now let's turn the call over to Deepak to provide a clinical update. Deepak?

Thanks, Rob. Greetings, everyone. As stated by Rob in his opening remarks, we continue to be encouraged by our team's execution of the Phase III pivotal studies evaluating sofpironium bromide, gel 15% for the treatment of primary axillary hyperhidrosis in 9 years and older patient population. We started these 2 studies in the fourth quarter of 2020, less than 1 year ago, midst of pandemic and well before vaccines were available to the public.

As such, we recognize that we are extremely fortunate to have adhered to our clinical study conduct time lines. More specifically, we announced that the last hyperhidrosis patient completed the Cardigan I study. And today, as Rob mentioned, we currently expect to have the last hyperhidrosis patient complete the Cardigan II study this month.

The entire Brickell team and our CROs have worked tirelessly to ensure that these 2 Phase III pivotal studies were started and completed on time, and we greatly appreciate their hard work and dedication to get us to this critical moment in company's history.

In addition, we owe a great deal of gratitude to all the clinical sites, investigators and their associated staff and, most importantly, to the approximately 700 hyperhidrosis patients that participated across these 2 studies. It is because of this strong showing by the hyperhidrosis community that we remain on track to concurrently report such top line results from both Cardigan studies in the fourth quarter of 2021.

If these studies are successful, we expect to proceed towards an NDA submission to the U.S. FDA in mid-2022. As a brief reminder, the Phase III pivotal co-primary efficacy endpoints as agreed to with the FDA are the proportion of subject achieving at least 2 points improvement on the patient-reported outcome assessment that is the Hyperhidrosis Disease Severity Measure-Axillary or HDSM-Ax scale and the change in gravimetric sweat production each from baseline to the end of treatment.

Lastly, on the second quarter, we also announced the results from our Phase III open-label long-term safety study, which assess the long-term safety, tolerability and efficacy of sofpironium bromide gel, 5% and 15% for 48 weeks of treatment in patients 9 years and older with primary axillary hyperhidrosis. We were proud to have these data presented in a late-breaking oral presentation at the American Academy of Dermatology's 2021 Virtual Meeting Experience in April.

Overall, the safety, tolerability and efficacy results of sofpironium bromide gel, 5% and 15% in the long-term open-label safety study were consistent with prior clinical experience and no unexpected safety findings were observed.

With that, I will now turn the call over to Bert to provide a financial overview. Bert?

Thanks, Deepak, and good afternoon to everyone on the call. Before I provide a summary of the second quarter financial results, I want to encourage you to read our full consolidated financial statements and MD&A contained in our quarterly report on Form 10-Q, which can be accessed through the Investors Section of our website once filed with the SEC.

Starting with cash and cash equivalents. The company reported $24.4 million as of June 30, 2021. As noted by Rob, subsequent to the end of the second quarter, we announced the completion of an equity capital raise for gross proceeds totaling approximately $8.1 million. We intend to use the net proceeds of our offering for research and development, working capital and general corporate purposes.

Most importantly, we believe our current cash position will support our operations beyond the potential sofpironium bromide NDA submission to the U.S. FDA, which is anticipated in mid-2022, pending the outcome of our ongoing Phase III clinical program.

Revenue for the second quarter was the royalty revenue we recognized from the sales of ECCLOCK in Japan by Kaken of approximately $151,000, up from $17,000 in Q1. This was compared to $600,000 in total revenue reported for the same period in 2020, which was driven by collaboration revenue recognized for R&D funding provided by Kaken to Brickell back in 2018.

R&D expenses were $8.8 million for the second quarter of 2021 compared to $2.7 million for the second quarter of 2020. This increase was primarily due to an increase in the clinical trial plus related to the Phase III Cardigan studies.

G&A expenses totaled $2.9 million for the second quarter of this year compared to $3 million for the second quarter of the prior year. Net total other income was $429,000 for the second quarter of 2021 compared to $7,000 for the second quarter of 2020. The increase was primarily due to a gain on extinguishment of debt that resulted from the forgiveness of the Paycheck Protection Program loan in June of 2021.

Lastly, our net loss for the second quarter of 2021 was $11.1 million compared to $5.1 million for the second quarter of 2020. As I previously noted, this increase was driven by the increase in our R&D expense.

And with that, I'll turn the call back over to Rob for closing remarks. Rob?

Thanks Deepak and Bert for your recap. This is an exciting time for Brickell. We continue to work together and build momentum towards the upcoming Phase III readout later this year, which we hope will be a meaningful advancement for the company, the patients we support, and the physicians who treat them.

In addition, we are continuing to explore potential business development opportunities to expand our pipeline with products that we believe can become potentially transformative therapies for patients. We look forward to providing additional updates to the extent these efforts materialize.

Lastly, it's worth mentioning that the clinical, financial and corporate milestones that we've achieved over the past year would be meaningful in normal times. But considering they were all accomplished in the middle of the pandemic speaks to the resilience and resourcefulness of our team as well as the unmet need that exists for a safe and effective hyperhidrosis treatment.

This concludes our prepared remarks. I'll now ask the operator to open the call up for questions. Operator?

(Operator Instructions)

Our first question is from Leland Gershell with Oppenheimer.

Great. Congratulations on the progress. 2 questions from me. First, I wanted to ask, pending the data from the Cardigan trials, assuming they're positive. Are there any significant items outstanding required for the NDA? Or is it simply a matter of compiling the pivotal data, the CMC section and so forth.

And then I wanted to ask with Kaken's going into Palmoplantar, that leads me to kind of wonder how you may see indication expansion under Brickell. And would that be an indication that you would look to do a trial in for perhaps an sNDA? How should we think about expansion opportunities for sofpironium?

Leland, thanks for the questions. This is Rob. In regards to the submission, there aren't any -- there are no clinical any -- no clinical work needed to do that submission. Obviously, there is a significant amount of work to pull the whole thing together.

We do plan to have a meeting with the FDA post Phase III meeting with the FDA. But all the big pieces are done for clinical trial, once the Phase III data is completed. So we feel really good about that.

In terms of Kaken and their work in this Phase I, I mean, we're really excited about that. We have obviously, rights to that data. We'll be really interested to see the results of that and be interested then to make a decision on how we go forward. It's a really interesting indication in the sense that there's a lot of unmet need, and in many ways, the sweatiness of the hands is one of the most debilitating aspects of hyperhidrosis. It's hard to use a phone, keyboards, et cetera. Besides the social embarrassment that people have.

So there's a real functional challenge to that, and it can create significant problems for patients. So obviously, we need to see the data, and we'll take a look at that. Obviously, when Kaken gets done. But we're happy that they're investing in the products, and we're excited about that being a potential future opportunity for this asset.

(Operator Instructions). There are no further questions at this time. So I would like to turn the call back to Rob Brown for any closing remarks.

Great. Thank you, Joe, and thanks to everyone for taking the time this afternoon to listen to our update. I wanted to close out the call by thanking everyone for joining us and your continued interest in Brickell.

We look forward to keeping all of you updated on the progress and the outcome of our studies over the coming months. As always, please feel free to reach out to us at any time with any further questions.

Have a great rest of your day.

This concludes today's conference. You may disconnect your lines at this time. Thank you very much for your participation. Have a great day.