Bio Path Holdings Inc (BPTH) 2022 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings Full Year 2022 Earnings Conference Call. (Operator Instructions) At this time, I'd like to turn the floor over to Will O’Connor of Stern Investor Relations. Sir, please proceed.

Thank you, operator. Welcome to the Bio-Path Holdings Conference Call and Webcast to review the company's full year 2022 financial 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 Senior Vice President of Finance, Accounting and Administration, Anthony Price.

Before we begin, 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.

Thank you, Will. Good morning, everyone, and thank you for joining us. 2022 was a year in which we made great progress executing on our mission to bringing new medicines to the battle against cancer. With the disease as evasive and resistant to treatments as cancer, we need to bring bold new approaches to fight this deadly disease. At Bio-Path, we are bringing true innovation to the fight against cancer with our DNAbilize platform across a number of hard-to-treat cancers. We are proud of the progress we've made and inspired by the hope we can bring to patients with limited or no treatment options.

In December, we were delighted to report the initiation of an important Phase Ib of clinical trial in BP1001-A in patients with solid tumors, including ovarian, endometrial, pancreatic and triple-negative breast cancer.

Some of the most challenging cancers to treat with today's therapeutic toolkit. BP1001-A is a modified product from prexigebersen sharing the same drug substance with enhanced nanoparticle properties. This trial is being conducted at several leading cancer centers and will initially evaluate the safety of solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that we may provide clinical benefit for such patients. We look forward to cohort completion and data readout from this study around midyear.

Next, let's turn to the progress we have made with our lead product candidate prexigebersen. We continue to make significant progress advancing Stage 2 of our Phase II clinical trial of prexigebersen for the treatment of acute myeloid leukemia or AML, in combination with frontline therapy decitabine and venetoclax. The amended stage 2 of this Phase II trial in AML is an open-label 2-stage multi-center study of prexigebersen in combination with decitabine and venetoclax in 2 cohorts of patients with previously untreated AML and relapsed resistant AML.

A third cohort includes treating relapsed resistant AML patients who are venetoclax resistant or intolerant with the 2-drug combination of prexigebersen and decitabine.

The primary endpoint for this study will be the number of patients who achieve complete remission which includes complete remission with incomplete hematologic recovery and complete remission with partial hematology recovery. An interim analysis will be performed on each cohort to assess the safety and efficacy of the treatment. In the coming weeks, we will assess the initial safety and efficacy of this combination therapy with the potential to qualify for expanded program status.

Turning now to our BP1002 program, which targets Bcl-2. As you know, Bcl-2 is responsible for driving cell survival in up to 60% of all cancers. High expression of Bcl-2 has been correlated with poor prognosis for patients diagnosed with AML.

Venetoclax has shown activity against antiapoptotic protein Bcl-2 and works by neutralizing the protein's 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 allogenetic hematopoietic cell transplantation disease relapse invariably occurs oftentimes due to BH3 domain mutation over time. BP1002 also targets the Bcl2 protein. However, BP1002 activity is based on blocking the Bcl2 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.

A total of 6 evaluable patients will be treated with BP1002 monotherapy and a standard 3+3 design with a starting dose of 20 milligrams per square meter. The improved treatment cycle is 2 doses per week over 4 weeks, resulting in 8 doses administered over 28 days. The Phase Ib portion of the study will commence after completion of BP1002 monotherapy cohorts and will assess the safety and efficacy from BP1002 in combination with decitabine in refractory/relapsed AML patients. We expect cohort completion and initial data readout from this study around midyear.

Finally, let's review the progress we've made with BP1003 and which targets the STAT3 protein. STAT3 is a transcription factor that regulates various tumorigenic processes, such as tumor proliferation, metastasis and drug resistance. Its overexpression and aberrant activation characterized many cancers, including breast, lung, ovarian, liver and colon cancer.

Activation of the STAT3 pathway in breast and ovarian cancer cells promote tumor initiation, migration and Taxol resistance. STAT3 also promotes 5-FU resistance in colorectal cancer cells. It's role in numerous malignancies made STAT3 a potential cancer therapeutic agent.

BP1003 is a novel liposome-incorporated STAT3 antisense oligodeoxynucleotide that efficiently reduces STAT3 expression and enhances a sensitivity of breast and ovarian cancer cells with Taxol and 5-FU. These results are in line with previous work in which BP1003 plus gemcitabine displayed enhanced antitumor activity to pancreatic ductal adenocarcinoma. Together, these results strongly suggest that BP1003 combination therapy is a novel strategy for patients with advanced solid tumors. We are particularly excited to launch our first-in-human validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options. We look forward to filing an IND application for its very promising product candidate later this year.

With that, I'll now turn the program over to Anthony Price for a brief review of our financials along with balance sheet highlights. Anthony?

Thanks, Peter. The company reported a net loss of $13.9 million or $1.91 per share for the year ended December 31, 2022, compared to a net loss of $10.4 million or $1.55 per share for the year ended December 31, 2021.

Research and development expense for the year ended December 31, 2022, increased to $9.2 million compared to $5.9 million for the year ended December 31, 2021, primarily due to manufacturing expenses related to drug product leases in 2022, increased enrollment in our Phase II clinical trial for prexigebersen and AML and start-up costs related to our Phase I clinical trial for BP1002 in refractory/relapsed AML patients.

General and administrative expense for the year ended December 31, 2022, increased to $4.7 million, compared to $4.5 million for the year ended December 31, 2021, primarily due to increased legal fees.

As of December 31, 2022, the company had cash of $10.4 million compared to $23.8 million at December 31, 2021. Net cash used in operating activities for the year ended December 31, 2022, was $15.1 million compared to $9.9 million for the comparable period in 2021. Net cash provided by financing activities for the year ended December 31, 2022, was $1.7 million.

With that, I'll now turn the call back over to Peter.

Thanks, Anthony. As I hope we have conveyed, we have an exciting year ahead with several potentially value-creating clinical milestones across our portfolio, including cohort completion and data readout from our Phase I/1b clinical trial of BP1001-A and solid tumors around midyear. Cohort completion and data readout from our Phase I/1b clinical trial of BP1002 in relapsed/refractory AML around midyear.

An initial interim safety and efficacy analysis from our Phase II clinical trial of prexigebersen AML beginning in the coming quarter. At Bio-Path, we never lose sight of our goal to bring new medicines to the fight against cancer. It is this singular mission that drives us to push the boundaries in our work every day with passion and purpose.

With that, operator, we're ready to open the call for questions.

(Operator Instructions) Our first question today comes from Laura Engel from Stonegate.

Well, lots of good news, busy, busy, as always, finding a good bite. I love that, how you finished your comments. But could you just comment, given recently reported year-end cash balances. Obviously, the explanation for the change in the R&D year-over-year, which you've mentioned the manufacturing kind of details how that works a little bit differently. But just kind of what you see high level, of course, for the upcoming year, comparatively speaking, as we kind of model with everything with all the different programs going on and try to get some insight on that?

Yes. I -- a little background color. Recall in the previous 2 years with COVID, the manufacturing environment was tough for us and probably for everybody. And both our plants had COVID shutdowns. And it was difficult for them to reestablish manufacturing, and we worked with them.

And one of the key things we did was we concluded that we needed to go out and double our supply chain in both the oligo manufacturer and the drug product manufacturer. The limitations on drug supply over those 2 years really slowed and limited our enrollment because obviously, we're not taking people in if we have the risk of cutting them off. So we were very successful in doubling our supply chain. And so we spent a lot of last year, and of course, this year, we -- in the first quarter, wrapping things up.

But last year, building our supply of drugs, Recall that our drug product, remember, it's not approved. So therefore, the final drug product doesn't have an economic value, and it has to have be expensed as -- and we do that once we release the product. We had a tremendous -- we had a fourfold increase in our supply of drug vials, which is important because that's what's allowed us to kind of release the gates and get the enrollment going. But of course, the other side of that coin is that, that tremendously increases your R&D expense because that's where it goes.

So part of that you see on the year-over-year in the R&D expense is a fourfold increase in the drug supplies, and that was several million of that increase. I think that we would expect the -- I don't have a specific forecast, but I know that the total development expense should be in probably about maybe the $4 million range going forward, but that's not a steady number prepared to cash budget, but it goes out and lapse over into the first quarter of '24. But it should not be that as high as it was simply because we won't have that hard push on building drug inventory.

Great. Well, that was my guess, but I wanted to just go over that with you, and I appreciate you giving us the insight.

(Operator Instructions) Our next question comes from Jonathan Aschoff from ROTH MKM.

I was wondering, did you just say that your R&D will only be $1 million a quarter, is that $4 million for the year?

I think that instead of [$9 million], I would expect it to probably be in the [$5 million] or [$6 million] range. But I don't have the studied number. What I think I tried to say was it would be down a couple of million from what we saw in the last year. So because I won't have that large inventory buildup.

Okay. All right. That definitely makes a lot more sense. I was wondering the venetoclax resistant or intolerant arm for 1001, when might we see data there as well as 1002 in CLL?

Okay. The third cohort of the Phase II trial? Is that what you're asking for?

Yes.

Yes, that one -- we've had a lot enrolled, but those are very difficult patients, that would not be middle year. That would be showing up probably in the third or fourth patients -- quarter. We've had quite a few come through, but those are pretty rough patients. And it's harder to find them, quite frankly. So we've had a lot come in. So I think you're looking in the second half of the year for that one. That's the furthest or the slowest of the 3 cohorts.

Okay. How about the CLL trial with 1002.

The CLL trial, we have -- we only need 1 more patient. We had that patient to complete out the rollout for that first cohort. And we've added 2 more, including Albert [Einstein] -- pretty good institution, which I understand they have looked at the protocol and think that they can do some good with it. So I think that one, again, I think we've got to go several more months on that because those institutions won't be final [tough] and run. So ideally, in the third quarter, we'll have that third [patient] and then can report out on that first cohort. Again, the (inaudible) with that trial is there's a real -- it's a low dose starting. It's a monotherapy, so we don't have a chemo component to it. And there's a CAR-T trial going on attractive to people who want to try.

Okay. And lastly, you said you would file that IND for 1003 this year, right?

That's our goal. We finally -- let me just again give the background color on that. What has slowed us down. We've done everything for that. We just have that final second species tox study to do. And to do that, we have to have our PK study available. Again, specific for that, being able to demonstrate that, in fact, you have drug substance in the animal. We have a successful PK study that has -- method, I'm sorry, that has worked in our other 2 drugs. It has not worked in his third drug. And we've gone through some analysis, the molecule has a significantly lower melting point than the other 2. And we think that it may not be durable enough for the chemical additions and the steps that go to when you get a plasma from an animal that it can't withstand it.

And so it interrupts the binding, which gives off the signal that detects it. So we've had to come up with another technique to be able to (inaudible) detect and we have one now. And in fact, this past 2 weeks, we've been interviewing some large CROs that have an acceptable method, and they don't have much of a backlog which is great on their mass spec side of the business that you need to use with this technique. And so we think we can get that round up and going on at the actual animal study will only take 2 months to test and report. So we think we can make that IND by the end of the year. But that's been the trouble. We've been all set. It's just we've had to come up with a different technology to be able to detect the presence of the substance in the blood and serum.

And ladies and gentlemen, with that, we will -- we've reached the end of today's question-and-answer session. I'd like to turn the floor back over to Peter for any closing remarks.

Thank you again, everyone, for joining us and for your continued support of Bio-Path. Have a great day. Thank you.

And ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for joining. You may now disconnect your lines.