Bio Path Holdings Inc (BPTH) 2019 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings Year-End 2019 Earnings Conference Call. (Operator Instruction]

I would now like to turn the call over to Will O'Connor of Stern Investor Relations. Please proceed.

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company's year-end 2019 earnings results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release which outlines the topics that we plan to discuss on today's call. The release is available at biopathholdings.com. With me today from Bio-Path are President and CEO, Peter Nielsen; and Vice President of Finance and Accounting, Anthony Price. Before we begin the call, I'd like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call.

With that, I'll now turn the call over to Bio-Path's CEO, Peter Nielsen.

Thanks, Will. Good morning, everyone, and thank you for joining us today. I'm pleased to be addressing you all today to discuss the significant progress we made in 2019, which saw important advances across our clinical development pipeline and meaningful improvement to our company's valuation. The progress we made throughout 2019 formed the foundation for us to advance and expand our clinical portfolio toward key inflection points in 2020. Throughout 2019, we continue to execute on our clinical development plans across our DNAbilize platform of an innovative RNAi nanoparticle therapeutics to treat patients suffering with a variety of life-threatening cancer indications. Despite some groundbreaking progress with immuno-oncology and combination therapies, there continues to be a large unmet medical need for a great number of cancer indications.

We are very excited about the potential for our DNAbilize to play an important role in the treatment paradigm for these difficult-to-treat cancers and look forward to building on our compelling body of clinical evidence in support of those goals. So let me begin with a review of DNAbilize platform, so you can understand and hopefully, share our enthusiasm for its potential.

As you know, the DNAbilize platform is our proprietary antisense, RNAi nanoparticle technology, which we use for the creation of nucleic acid therapeutics. DNAbilize therapeutics integrate with the cellular membrane because of their unique structure, allowing the antisense drug to be delivered to the disease cells with high uptake into the cell via incorporation into the lipid layers. There has been no evidence of toxicity associated with our technology. We are extremely enthusiastic about the potential for our DNAbilize platform for developing novel treatments for patients suffering from diseases with high unmet medical need.

Now let's turn to the progress we've made advancing our lead product candidate prexigebersen. Prexigebersen is being studied in a Phase II clinical trial for the treatment of AML. As a reminder, this trial is a multicenter trial that originally studied prexigebersen combination with low-dose cytarabine or LDAC and de novo patients with previously untreated AML, who are not otherwise eligible for standard or high-intensity chemotherapy regimens or who had elected a low-intensity regimen. The trial was open-label with a 2-stage design to assess the safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen. The primary import endpoint of that study was complete remission, including patients who achieve incomplete hematologic recovery and complete remissions with incomplete platelet recovery. Secondary endpoints assess the safety and efficacy of prexigebersen, including overall survival, time to response, duration of response and adverse events as evaluated by physical examination findings, vital signs and clinical laboratory tests.

In April of 2018, we presented compelling interim results for our Phase II study. And during the first quarter of 2019, we were pleased to report additional analysis from this study. In our original interim analysis from this ongoing Phase II study, our results showed that 47% of the evaluable patients showed some form of response to the combination treatment, including 4 patients with complete remission or CR, 24%, and 4 patients with stable disease include 1 patient who achieved the leukemia free status and 1 patient who had significantly reduced bone marrow blast. As you may recall, during the first quarter of 2019, we announced updated interim results from this study. The updated interim results show that the efficacy profile had improved to where 11 or 65% of the 17 evaluable patients had a response, including 5 or 29%, who achieved CR, including one CR with incomplete hematologic recovery of CRi and one morphologic leukemia-free state. And 6 stable disease responses, including 2 patients who had greater than 50% reduction in bone marrow blast. Moreover, investigation by the principal investigators observed that 68% of these patients were secondary AML, an extremely difficult class to treat. These updated interim results from Stage 1 of our Phase II study of prexigebersen in de novo AML patients only increase our confidence in the safety and efficacy profile of prexigebersen and underscore its potential to treat AML patients.

The complete response rate for LDAC treatment alone for the class of patients in this study was benchmarked at 7% to 13%, whereas prexigebersen treatment with LDAC showed a 29% CR/CRi rate with a highly favorable safety profile. These data are particularly compelling and encourage us to prioritize advancement of prexigebersen, in combination with the standard of care. The approval of frontline therapy, venetoclax provides an opportunity to add prexigebersen to the combination of venetoclax plus decitabine for treatment of de novo AML patients. We view prexigebersen as an ideal combination candidate with frontline therapy. Our aim is to add prexigebersen with the leading frontline therapies to improve treatment options for patients. As the treatment landscape evolves, we will continue to respond to those advances. The plans for our registration-directed clinical development program for prexigebersen as a treatment for AML reflects these changes. Firstly, we have amended the existing Stage 2 clinical trial. The key changes in the amended Phase II study is [de novo] patients with high-risk myelodysplastic syndrome or MDS and refractory/relapsed AML patients. The restructured Phase II clinical trials now has 2 cohorts of patients; the first cohort being a treated AML patients as per the pre-amended trial, but with the addition of high-risk MDS patients; and the second cohort comprised of refractory/relapsed AML patients and high-risk MDS patients. The amended Phase II study evaluated the safety of prexigebersen in combination with decitabine in both cohorts of patients at a dose of 60-milligram per square meter in combination with decitabine. The study evaluated patients for a safety assessment of prexigebersen and decitabine, determine the combination to be safe in 6 available patients. We are in the process of modifying testing of both cohorts of patients to add venetoclax to the prexigebersen, decitabine combination treatment. Once we have completed the 6 patient safety assessment of the prexigebersen, decitabine, venetoclax combination, the efficacy segment of this trial can commence. It is anticipated that each cohort will include an interim assessment of 19 evaluable patients that would assess whether the treatment and efficacy of the combination of prexigebersen, decitabine and venetoclax exceeds the efficacy of current standard of care therapy with statistical significance.

Upon such favorable data, we intend to petition the U.S. Food and Drug Administration, or the FDA, for accelerated approval. The efficacy segment of the trial is expected to be conducted at 10 clinical sites in the United States, of which we now have 9 sites committed to the Phase II program, 2 additional sites remain as candidates to fill the 10th spot -- site spot.

Moving forward, we plan to evaluate potential clinical sites in Europe, with an emphasis on patient accruals. Overall, these transformational steps will result in 2 registration-directed cohorts of our Phase II clinical trial in AML. It is planned for both cohorts to study prexigebersen plus decitabine plus venetoclax, one forum treated AML and MDS and the other for relapse/refractory AML and MDS.

Before turning to our other programs, I'd like to briefly touch on our planned Phase I clinical trial of prexigebersen in patients with advanced solid tumors, including ovarian and uterine, pancreatic and hormone refractory breast cancer. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen in solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that prexigebersen may provide clinical benefit for such patients. We filed an investigational new drug application or IND, and expect to begin this study in 2020. Turning now to plans for BP1002, our second therapeutic candidate, which targets the Bcl-2 protein. During the fourth quarter of 2019, we filed an IND application for our second pipeline candidate, BP1002. Venetoclax has also shown activity against the antiapoptotic protein Bcl-2, and works by neutralizing the proteins BH3 domain. It is an approved treatment for chronic lymphocytic leukemia, or CLL patients and untreated AML patients. However, with the exception of some patients treated with cell transplantation, disease relapse invariably occurs, often times due to BH3 domain mutation over time. BP1002 also targets the Bcl-2 protein. However, BP1002 activity is based on blocking the Bcl-2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients, who have relapsed, including AML patients who previously received venetoclax treatments. In November 2019, the FDA granted IND clearance to study BP1002 as a potential treatment for CLL, including venetoclax relapses and lymphoma. We can amend this registration to include AML relapses if those occur. The plan of modification of our Phase II clinical program in AML to include venetoclax combination treatment with prexigebersen will give us an early experience with treating Bcl-2 driven antiapoptotic in these patients. We expect to begin our first in-human study, BP1002 in the first half of 2020. Finally, let me review our progress with our third drug candidate BP1003, which targets the STAT3 protein. This is a program for which we have considerable excitement for its future based on very promising preclinical data presented in 2019. We are studying BP1003 for the treatment of pancreatic cancer in a patient-derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments. The results from our preclinical studies of BP1003 were highlighted in a poster presentation at the American Association of Cancer Research annual meeting or the AACR in Atlanta in April 2019. The potential for our STAT3 is compelling for a number of reasons, signal transduction and activator of transcription 3 or STAT3, though typically inactive in normal cells is aberrantly active in cancer cells. The abilities of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induced vascular formation and invade distant organs are well recognized hallmarks of cancer. STAT3 is a regulator of the genes involved in these cancer processes. More recently, the capability of tumors to evade immune surveillance and avoid destruction by the immune system has also gained significant acceptance in the cancer research field. STAT3, which is a point of convergence for many oncogenic pathways, has emerged as a critical mediator of tumor immune evasion at multiple levels. Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic cancer. Activation of STAT3 correlates with poor clinical outcome, high-grade disease and metastasis and has been linked with resistance to chemotherapy, including gemcitabine, considered a standard of care agent for advanced pancreatic cancer. Therefore, inhibition of STAT3 in combination with chemotherapy is expected to produce enhanced clinical benefit. The poster at AACR highlighted 4 antisense oligo sequences directed against STAT3 messenger RNA, identified by Bio-Path and manufactured using DNAbilize antisense RNA nanoparticle technology.

Cell viability test, Western blocks were conducted to determine the inhibitory effects of liposome incorporated STAT3 antisense oligo on non-small cell lung cancer and AML cells. And ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic patient-derived xenografts to study the overall activity of BP1003 alone and in combination with gemcitabine. Using previously defined criteria, tissue slice viability, in addition, greater than 30% with a p-value less than 0.05 was a response. For validation of ex vivo results, pancreatic cancer patient-derived xenografts of tumor bearing mice were administered BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days. In the live tissue assay, BP1003 at a dose of 10 micromolar significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer patients, drive xenografts by more than 30% with a p-value of less than 0.05. The combination of BP1003 and gemcitabine further enhance ex vivo efficacy of BP1003 in a subset of patient-derived xenografts. In the in vivo study with pancreatic cancer patient-derived xenografts module, a combination of BP1003 and gemcitabine caused tumor regression during the 28-day drug treatment period.

This anti-cancer activity was maintained for another 21 days even when drug treatment had ceased. These very encouraging data were well received earlier this year at AACR, where we had universally enthusiastic response from the audience. We are particularly excited to launch this program as it will be our first-in-humans validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options. In addition, BP1003 was selected as the most potent liposome-incorporated STAT3 antisense sequence and decrease in non-small cell lung cancer cell liability. Further validation in AML cells demonstrated that BP1003 inhibited cell viability and STAT3 protein expression. We are excited by these preclinical data and for the potential role, BP1003 may play in addressing solid tumors, an area that to date has shown difficult-to-treat with current therapies. Moving forward, we are undertaking IND-enabling studies for BP1003 this year with a goal to file an IND application with its very promising product candidate later in the year.

As you can see, 2019 was a very productive year in terms of our clinical development programs. We continue to advance those important programs and remain committed to evaluating new opportunities to people that capitalize on the potential of our DNAbilize technology platform in other oncology indications. With that, I'll now turn the program over to Anthony Price, for a brief review of our 2019 full year financials, along with balance sheet highlights. Anthony?

Thanks, Peter. The company reported a net loss of $8.6 million or $3.24 per share for the year ended December 31, 2019, compared to a net loss of $8.6 million or $14.38 per share for the year ended December 31, 2018. Research and development expense for each of the years ended December 31, 2019, and December 31, 2018, was $4.6 million. General and administrative expense for the year ended December 31, 2019, increased to $4.1 million compared to $3.4 million for the year ended December 31, 2018, primarily due to increased legal fees and salaries and benefits expense. As of December 31, 2019, the company had cash of $20.4 million compared to $1 million at December 31, 2018. Net cash used in operating activities for the year ended December 31, 2019, was $8.4 million compared to $6.1 million for the comparable period in 2018. Net cash provided by financing activities for the year ended December 31, 2019, was $27.8 million. With that, I'll now turn the call back over to Peter.

Thanks, Anthony. We have an exciting year ahead with all 3 of our clinical development programs. We look forward to advancing each of these through to value-creating inflection points with the coming year and remain confident that our strengthened balance sheet will support these goals. As ever, we appreciate your support. As together, we advance our DNAbilize platform in a number of important oncology indications that should benefit cancer patients worldwide. With that, operator, we are ready to open the call for questions.

[Operator Instruction] Our first question comes from Yi Chen with H.C. Wainwright.

My first question is regarding the triple combo trial of prexigebersen plus decitabine and venetoclax. Can you give us the time frame that you expect within which you expect to complete the safety evaluation of the triple combo?

Well, that should -- the safety evaluations have typically taken maybe 3 to 6 months, including wrapping up the results. I mean we're going to have quite a few sites involved. And so I think we should comfortably be able to do that.

So just to clarify, no patient has been dosed with the triple combo yet, right? And if you can comment on additional European-based sites, that would be helpful.

Yes. No one has been treated with the triple combination. We are being a reining just to, get that to IRBs for approval. And we have all the documentation done. It's just now that the paperwork process, as you know, can take some time, depending on the frequency of site IRB meetings and then those kinds of things. European, the sites will be -- I've had some -- our CRO was a -- its roots come from actually European operations and then they expanded into the U.S., so a fairly large and very confident. And so we're using those people to pull us, but we -- Central Europe is more of the area that we plan to go. And we believe, based on discussions with our CROs, if those are places that we should be able to have access to patients. More of the Central Europe area, though.

Second question, regarding the prexigebersen combo therapy for CML, is it still being considered?

What we did -- that's a good question. CML is -- there's a lot of flux in that treatment. Now our drug works very well at accelerated and blast crisis. We've gone through 2 amendments to expand the trial for enrollment. And the issue is that advances in TKI treatments have just continued to extend the period upon which patients remain in the chronic phase. So what we have done is engaged the CRO that was on that study to go out and evaluate 15 sites. And so we are pulling the results. Just the evaluation being, of course, their interest in the number of patients that they think that they can produce. So we're not going to beat a dead horse. We'll evaluate this and then put back, there are just not that many blast crisis, accelerated crisis patients out there than we'll probably take a look at just stopping it. So it's a good question. It's a little early. We haven't -- we need to go through all the results, and we do have couple of sites that we're interested, but we just need to complete our evaluation of whether we want to continue with that.

My last question is regarding the solid tumor study of prexigebersen. Do you expect to start patient enrollment in first half of this year? Or that's likely to occur in the second half?

What we're doing is, again, we've got our IND in, and already filed, and we had some additional -- when we did 1002 IND, we advanced our testing along to the really state-of-the-art for CMCs, and so the FDA had wanted us to apply some of that to the solid tumors of the study. Recall, that really is prexigebersen, it is, a, it's got some modification, minor, very minor to the final product. We engineered it so that we get small and smaller particle sizes with the goal of wanting to enhance tumor uptake in the interior through the pore spaces, vascular pore spaces. So drug substance is the same, but when you make a small modification, we have to redo everything and bring it up to date. So we're waiting on that. But by the first half, we could -- we certainly should be open. And ideally, we'll have some patients, so it would be prudent there.

It's a study that's had a lot of interest from sites, so that's the current hold up. We're just waiting to complete a couple of tests, leads and pays appropriate value -- validations. The testing is fine, but you have to get everything proper. So that's what we're doing.

Our next question comes from Laura Engel with Stonegate Capital Partners.

So just one financial question. Looking at the filing from yesterday, you actually had a decrease year-over-year for your R&D line item, and was everything going on and ramping up. I had expected a little bit more than that. Can you make any comments on the upcoming year, especially maybe first or second quarter, given the plans you've outlined on today's call, and things we've talked about historically? Any insight on that would be helpful.

Well, remember, we had a lot of activity going on, the issue is that the way, again, it's accounted for. This is not an approved drug yet. So when we finish batches, GMP batches, in the process of producing them, and it takes a while because recall, we have a drug substance that has its own clinical batch. And so it has its own queue in investments in it along the way. And then that becomes a raw material in our drug product. So we go through a period of accumulating costs in the balance sheet item, which is a holding area. It's not an inventory because it's not an approved product. So doesn't have that status, but it's a prepaid expense. And then once the drug product, the final product, which includes, again, all those costs from the drug substance that was released, once that final drug product is released to the company than it is expensed. Again, it's not an approved product, so it doesn't have inventory value. So as soon as it's released, it's expensed. And at that time, it goes into the R&D expense. So really, what drives the -- a lot of the R&D expense is just that cycling of when we get drug batches.

Now we certainly had things in line last year, but they had released. We've got several batches coming in that are close to being released this year. So it's that as well, plus we engaged some CRO, a new CRO. And a lot of times, the payments as you initiate new trials, can create prepaids, which are not necessarily, of course, are not a research expense. So it's really, I think, cycling of things that has that the effect that you see. Anthony, any other comment?

Yes. Just to piggyback on that. If you look on the balance sheet at our prepaid drug product for testing, you'll see that year-over-year, we actually have an increase of 450,000 -- approximately $450,000. And so that will -- right there, that's an area where you'll see an increase with all of our upcoming activity, because we'll need all that drug moving forward.

Okay. And so in the upcoming year, we should see some of that flow through?

Correct.

[Operator Instruction] And I'm not showing any further questions at this time.

All right. Thank you, again, everyone, for joining us. And we appreciate your continued support of Bio-Path. Have a great day.

Ladies and gentlemen, that does conclude today's presentation. You may now disconnect, and have a wonderful day.