CohBar Inc (CWBR) 2021 Q3 法說會逐字稿

Good afternoon. My name is Chuck, and I'll be your conference operator today. At this time, I would like to welcome everyone to CohBar's Third Quarter 2021 Financial Results Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Ms. Jordyn Tarazi, Director of Investor Relations at CohBar. Please go ahead.

Thank you, Chuck, and thank you, everyone, for joining CohBar's Third Quarter 2021 Financial Results Conference Call. Joining me on today's call is Joe Sarret, CohBar's Chief Executive Officer; Ken Cundy, CohBar's Chief Scientific Officer; and Jeff Biunno, CohBar's Chief Financial Officer. CohBar's financial results press release was issued earlier today and may be downloaded from our website at cohbar.com. Joe will begin with an introduction, followed by an update on our CB5138-3 program from Ken. Jeff will then provide an overview of the third quarter financial results. We will conclude with Q&A.

Before we begin, I'd like to take a moment to remind listeners that the remarks on today's conference call may include forward-looking statements within the meaning of the securities laws. These forward-looking statements include, but are not limited to, statements regarding the company's business and financial strategies; plans and expectations for its pipeline product candidates, including its lead CB4211 drug candidate program; the therapeutic and commercial potential of the company's pipeline product candidates, including its lead drug candidate, CB4211 and other mitochondria-based therapeutics; statements about the company's ability to provide patent protection for its program and a potential listing of the CB4211 patent in the FDA's Orange Book; statements regarding ongoing and planned research and development activities, including ongoing and planned clinical trials and regulatory status and strategies and the timing of announcements and updates relating to our clinical trials and related data; potential partnerships and our capital resources; financial and operating performance and ability to fund our operations.

Forward-looking statements are based on current expectations, projections and interpretations that involve a number of risks and uncertainties that could cause actual results to differ materially than those anticipated by CohBar. These risks and uncertainties are described in our registration statements, reports and other filings with the Securities and Exchange Commission and applicable Canadian securities regulators, which are available on our website at cohbar.com, sec.gov and sedar.com, as well as in the safe harbor statement included with today's press release.

You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statements. CohBar does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.

Now I'd like to turn the call over to Joe Sarret, CohBar's Chief Executive Officer. Joe?

Thank you, Jordyn, and thank you, everyone, for joining us this afternoon. The last quarter for CohBar was quite eventful. We made significant advancements across many areas of our business, including the achievement of a major milestone with a positive data readout from our first human study. We also strengthened our human capital with the addition of 2 new Board members, Carol Nast and Dr. Joanna Yun. They each bring a wealth of relevant industry expertise, and we are fortunate to have them as part of the CohBar team. Welcome, Carol and Joanne to CohBar.

In addition, we recently completed the financing that extends our operational runway and allows us to continue to advance our pipeline. We believe that the fundamentals of our story have never been better, and we're excited for what lies ahead. CohBar is a leader in harnessing the power of the mitochondrial genome to develop novel peptide therapeutics. Although people tend to think of mitochondria primarily in terms of energy production, they also play a much broader role in the regulation of a variety of biological pathways. As part of this process, many of the peptides encoded in the mitochondrial genome are secreted outside of the cell and enter the systemic circulation or they have important impacts on other organs and tissues.

We believe that our approach of tapping into the tremendous power of the mitochondria has the potential to provide valuable new treatment options for physicians and dramatically improve the lives of patients. Our pipeline is focused on chronic conditions with significant unmet medical need, and our most advanced programs or CB4211 under development for the treatment of non-alcoholic steatohepatitis or NASH as well as obesity and CB5138-3, which we believe has the potential to treat a variety of fibrotic diseases with an initial indication of idiopathic pulmonary fibrosis, or IPF.

With that background, I'd like to discuss each of these programs in more detail. In August, we announced positive top line data from our multicentered, randomized, double-blind, placebo-controlled Phase IA/IB trial of CB4211. While we reviewed the results in detail during our last quarterly call, I think it's worth reiterating the key takeaways from the IB portion of the study. First, the study met its primary endpoints of safety and tolerability with no adverse events occurring in more than 1 subject in the CB4211 group, other than transient injection site reactions. This clean tolerability profile is not only an important derisking outcome for this program, but it is also a validation of our broader hypothesis that analogs of naturally occurring mitochondrial peptides will have fewer off-target effects than drug candidates developed from non-natural sources.

In terms of efficacy, we saw robust and significant improvements in both ALT and AST, which are markers of liver damage in subjects treated with CB4211 compared to placebo. Reductions in these key biomarkers are reflective of decreased liver inflammation and improved liver health. The 25% reduction in ALT seen with CB4211 treatment versus placebo, compares favorably not only when compared to other 4-week studies of potential NASH products, but also when compared to similar time points from longer studies of assets currently in Phase III development for NASH.

In fact, the level of ALT reduction seen in 27% of the subjects treated with CB4211 had reached a level of reduction that is predictive of potential NASH resolution, a very encouraging result after just 4 weeks of treatment with CB4211. We also demonstrated a significant decrease in glucose in the CB4211 group compared to placebo, even though only 1 of the 20 subjects in the trial was diabetic. We believe that this result combined with our preclinical data on improved insulin signaling is particularly promising in light of the fact that almost 50% of NASH patients have diabetes as a comorbidity. Additionally, subjects treated with CB4211 exhibited a trend towards weight reduction.

Finally, we saw substantial reductions in liver fat content in both the active and placebo groups. We believe the similar level of liver fat reduction in the placebo group is due to the fact that subjects were confined for the duration of the trial and were provided a healthier diet than they were eating prior to enrolling in the study. Keep in mind that it's the slowing and reversing of the liver damage related to inflammation and fibrosis, not decreasing liver fat in and of itself, that is the ultimate objective in treating NASH patients. Notably, despite the similar reductions in liver fat between the 2 groups, only the CB4211 arm demonstrated the improvements in markers of liver inflammation and glucose metabolism that I mentioned earlier.

After we announced these results, we were selected for a late-breaker poster presentation at the American Association for the Study of Liver Diseases, or AASLD, which was held last week. The lead author on the poster was Dr. Rohit Loomba, one of the leading key opinion leaders in the NASH field and the poster provided additional data and context for the study. Finally, our CB4211 program gained additional momentum on the IP front due to the issuance in September of a foundational U.S. patent covering the composition of matter of our peptide and related peptides as well as methods of use, including the use to treat NASH. The term of this new patent extends to at least 2037.

In the event that CB4211 is approved as a therapeutic in the U.S., the new patent would be eligible for listing in the FDA Orange Book, which is an important further barrier to generic entry. There are also foreign counterparts of this patent that are currently in the patent prosecution stage in multiple countries throughout the world. Taken together, these developments reflect significant advancement in our NASH program. We believe that the study results clearly demonstrate that CB4211 has a meaningful impact on disease and shows great promise in the treatment of patients with NASH. We have been meeting with key opinion leaders and other experts to determine the most appropriate design for a longer duration Phase IIa study in an outpatient setting that we have additional formulation and preparatory work to do before such a study could begin.

Given the large expense and long timelines associated with developing assets for the treatment of NASH, our preferred path forward with this program would be in the context of a partnership, and we have been discussing our recent clinical data with potential partners. NASH represents a very large opportunity for CohBar and is estimated to impact up to 30 million people in the U.S. alone with a potential market size in the tens of billions of dollars. While no drugs have been approved to date, many expect that combination therapy is likely to become commonplace due to the complexity of the disease. We believe CB4211 is well positioned for use in combination regimens due to its unique mechanism of action and demonstrated synergistic effects in preclinical models with other potential classes of NASH drugs, including GLP-1 agonist.

I'd now like to turn to our second clinical candidate, CB5138-3, which is a peptide with broad anti-fibrotic and anti-inflammatory properties that we are initially developing for IPF. IPF is a progressive respiratory disease of unknown cause that generally impacts adults over the age of 50 and is more common in man. Initial symptoms typically include a persistent cough, shortness of breath and fatigue. While the course of disease varies considerably between individuals, the mean survival after diagnosis is only 2 to 3 years, which is worse than most cancers. Unlike NASH, there are 2 currently approved drugs to treat IPF, but many patients are unable to tolerate them due to gastrointestinal and photosensitivity side effects.

While current treatment can delay some of the loss of lung function, outcomes remain poor and patients continue to experience significant morbidity and mortality. So there is a pressing need for novel therapeutics with better efficacy and an improved safety profile. Despite the limitations of the drugs currently on the market, each has annual sales exceeding $1 billion per year. Ken will say more about our CB5138-3 program in a moment, but we believe that this peptide has the potential to address the significant unmet needs that IPS patients currently face.

Given the tremendous promise of both of our clinical candidates, we recently completed a $15 million public offering, which added much needed capital to our balance sheet to enable us to continue to advance our pipeline. Our recent positive clinical data from CB4211 gives us even more confidence in the power of the approach that we are taking to novel drug development. With the additional funds, combined with our previous cash balance, we are now well positioned to continue to progress our pipeline and are particularly excited about our plans to initiate our first-in-human study for CB5138-3 next year.

I'll now hand it over to Ken, who will review our IPF program, including an update on our current thinking regarding the potential study design. Ken?

Thanks, Joe. Our 5138 analogs are family of peptides that have shown strong anti-fibrotic and anti-inflammatory properties in multiple in vitro and in vivo models of IPS. Based on studies conducted in cultured human lung cells, these peptides appear to work by reducing the production of key proteins involved in fibrosis and by inhibiting the pathological fibrotic process of cell transformation from healthy lung cells to fibrotic cells. We've also demonstrated that several of these improved analogs have clear anti-fibrotic and anti-inflammatory effects in an in vivo animal model of IPS.

In the more challenging therapeutic mouse model, we showed the treatment of animals beginning 1 week after induction of fibrosis with bleomycin had positive effects on all study outcomes, reducing the lung fibrosis, levels of collagen, cytokine secretion and the inflammation. A number of these study effects were greater than the effect seen on those parameters in the same study following treatment with nintedanib, one of the 2 approved drugs for IPF. Since CB5138-3 is based on a natural peptide, it has the potential to have an improved safety and tolerability profile, which, as Joe mentioned, would be an advantage given the relatively poor tolerability of the currently approved drugs.

Since we announced the selection of CB5138-3 as a new clinical candidate in March, we've been conducting the necessary IND-enabling activities in preparation for filing an IND and entering the clinic in 2022. Once we submit the final IND and get approval from FDA to proceed, our initial goal will be to examine the safety, tolerability and pharmacokinetics of CB5138-3 in healthy adult subjects. We expect that will involve testing several ascending doses of CB5138-3 given subcutaneously as single dose and 7-day multiple doses. Our objective will be to identify the most appropriate dose to take forward into subjects with IPF.

Now we continue to discuss the most appropriate development path for CB5138-3 for IPF with key disease area experts like Dr. Toby Maher, Professor of Medicine and Director of Interstitial Lung Disease at the Keck School of Medicine at the University of Southern California; and Dr. Naftali Kaminski, who is Chief of Pulmonary, Critical Care and Sleep Medicine at the Yale School of Medicine. They are on the cutting edge of studying the IPF disease process and ways to slow its progression. They've been involved in the development of other IPF drugs and have a clear understanding of how to design proof-of-concept studies. Based on their input, we believe it may be possible to conduct an initial 4-week proof-of-concept study of CB5138-3 in IPF patients.

While our study design cannot be finalized without input from FDA, this type of early proof-of-concept study in IPF may look at certain key biomarkers of the disease as well as biomarkers related to the effects of CB5138-3 seen in animals. The details of the potential biomarkers are still under discussion. Dose selection in healthy subjects and a proof of concept in IPF subjects could potentially be evaluated sequentially in 1 single Phase I/IIa study design. We will be working to further define our study protocol and plan to request FDA input on our proposed design.

In summary, we believe the preclinical efficacy data for CB5138-3 look promising. This is the second program to be nominated for clinical development from our novel technology platform and it would be a major milestone for the company to have 2 clinical stage programs next year. We look forward to updating you on our progress with this program on future calls.

And with that, I'll return the call to Joe.

Thanks, Ken. I'd now like to ask our CFO, Jeff Biunno, to walk you through our third quarter financial performance. Jeff?

Thank you, Joe, and thank you, everyone, for joining us this afternoon. I will now provide you with a summary of our financial results for the third quarter ended September 30, 2021, compared to the third quarter ended September 30, 2020. Total operating expenses in Q3 2021 were $3.4 million as compared to $2.6 million in Q3 2020, an increase of approximately $800,000. Research and development expenses were $1.6 million in Q3 2021 compared to $1.2 million in the prior year period, an increase of approximately $400,000. The increase in research and development expenses was primarily due to the costs associated with the continuing development of our peptides, partially offset by a decrease in stock-based compensation costs.

General and administrative expenses were $1.8 million in Q3 2021 compared to $1.4 million in the prior year period, an increase of approximately $400,000. The increase in general and administrative expenses was primarily due to higher stock-based compensation costs. For the quarter ended September 30, 2021, CohBar reported a net loss of $3.4 million or $0.05 per basic and diluted share compared to a net loss for the quarter ended September 30, 2020 of $3.2 million or $0.06 per basic and diluted share. Net loss included noncash expenses of approximately $700,000 for the quarter ended September 30, 2021 and $900,000 for the quarter ended September 30, 2020. Excluding the noncash expenses, CohBar's net loss was $2.7 million for the quarter ended September 30, 2021, as compared to $2.3 million for the prior year period.

Moving to the balance sheet. As of September 30, 2021, CohBar had $15 million in cash and investments compared to $21 million as of December 31, 2020. The cash burn for the quarter ended September 30, 2021, was approximately $3.3 million. During the quarter -- during the third quarter of 2021 and subsequent to the quarter end, CohBar realized gross funding of $19.6 million from its recently completed public offering, sales of its common stock under its ATM program and from exercises of warrants and stock options. We estimate that based on our cash and investments balance as of September 30, 2021, and the proceeds from the recently completed public offering, we have sufficient capital to finance our operations into the second half of 2023.

And I'll now turn the call back over to Joe. Joe?

Thanks, Jeff. Before we take your questions, I'd like to highlight our key areas of focus for the remainder of this year and the beginning of 2022. First, we are continuing to optimize the formulation for CB4211, while also working on the design of a Phase IIa study. In addition, we continue to have discussions with potential partners who have an interest in the NASH space, and we'll be speaking on a panel of the Fifth Annual NASH Summit next month.

Our other major focus is continuing to advance the ongoing IND-enabling studies for CB5138-3 for IPF. We remain on track to file the IND and begin our initial clinical study for this program next year. As Ken discussed, we are also working with KOLs to finalize the design for this first human study. As you can see from today's discussion, the fundamentals of the company have never been stronger. We have been leveraging the extraordinary power of the mitochondria and the broad role it plays in biology to develop a whole new class of drugs that have demonstrated potential therapeutic activity in a variety of disease models.

With the recent positive clinical data on CB4211, our expanding IP position, the progression of CB5138-3 towards the clinic and a strengthened balance sheet, we believe that we are well positioned to continue to advance our goal of developing novel products with clear clinical benefits. I would like to thank our shareholders for their continued commitment and support, which has been instrumental in enabling us to make the progress that we have made to date.

Chuck, can you please open the line for questions?

(Operator Instructions) And the first question will come from Kristen Kluska with Cantor Fitzgerald.

Maybe just to start with your late breaker at AASLD. Could you walk through some of the new findings you presented? And it looks like on the poster, you provided a lot more details around baseline assessments. So curious if you plan to evaluate some of the changes across these additional measures with CB4211 post treatment to see how this may correlate with some of the other effects observed.

Ken, do you want to take that one?

Yes. Sure. This is Ken. Yes, the AASLD poster started with really reiterating what we had announced before with respect to the substantial reductions in the ALT and the AST. So that was something we clearly provided in-depth informational, including the time courses there, which are obviously supportive of a continuing decline in ALT and AST that one might expect to go further as we do longer studies. In addition, we also, of course, presented the data on the glucose change and the trend towards body rate reduction in the CB4211 treated group compared to placebo. The new data in the poster is basically the additional information on the characteristics of the subjects, the baseline characteristics and their baseline biomarker values across a longer list of additional biomarkers evaluated in the study. There is ongoing analysis for this study of these additional biomarkers and any correlations there might be between those. We'll obviously update when we have more to say about that.

Great. And as you're looking ahead at next studies, wanted to ask if you anticipate making any protocol changes related to the healthy diet confinement in light of the liver effects that were also observed in the placebo arm. And even if that's not the case, as you're potentially looking for the trial to be much longer, is there a time where you might expect to see a separation, if at all, from these 2 arms?

Yes. With respect to the next study we would do, we would not be using confinement of subjects the way we did in this first study. This was really the product of 2 things. One is the need to observe injection sites following the initial phase of the study where we had improved our formulation to overcome persistent local injection site deposition, but also because of COVID. And we envisage any future study Phase II design we would embark on would be an outpatient setting.

The next question will come from Kumar Raja with Brookline Capital Markets.

So with regard to the partnership for the Phase II trial, how far are you in those? And what are the considerations in terms of proceeding for or with a partnership or moving forward to the Phase II trial by yourself?

Thanks, Kumar. Great question. So in terms of the partnership discussions, as you know, we announced the positive data from our CB4211 trial in August, and we're now coming off of the heels of the AASLD poster presentation that Ken just was speaking about. So we think that, combined with the developments on the IT front, positions us well to continue to progress discussions with interested parties. As you know, it's always kind of difficult to predict sort of how long those discussions are going to take. So it's hard to provide a whole lot more context than that other than to say that we're having those discussions.

In terms of the considerations about partnering now versus moving forward on our own, again, that really, it's a complex decision that is related to how those discussions are going, what potential terms might be available in a partnership and sort of weighing that and what the partner might bring versus the risks of moving forward on our own. As we've mentioned earlier in the prepared remarks, just given the complexity of NASH as a field, we do think all else being equal, that the preferred path forward here would be in the context of a partnership.

Okay. And also you are seeing some trends here in obesity and NASH and also you have some preclinical data where you have like a synergistic effect with GLP-1. So how does that fall in terms of like who would be a potential partner? And what kind of trials do you think would kind of get some more data in terms of obesity?

Yes. So the way we think about that currently is we did see that, as you noted, the trends in weight reduction in the 4211 trial, which was just a 4-week study. So we didn't expect with just such a brief duration to see massive changes in body weight. We think the best way to evaluate obesity, at least at this stage, is likely in the context of a subsequent trial in NASH, where there would be a longer duration of therapy and a better opportunity to sort of see the effects of body weight changes in the context of that sort of subsequent trial, which would then, I think, hopefully give us some additional data to figure out how to pursue obesity.

I think that people that are looking at NASH as a space, as you know, it's -- NASH is a disease associated with a variety of different metabolic sort of dysregulation, including obesity. So many of the people interested in NAS, we believe, are also potentially interested in a BCD as a potential indication, particularly people with NASH assets that are looking at drugs that have potential impacts on body weight. And so there are some -- obviously, people -- there are drugs currently on the market like GLP-1 agonist that are being targeted for obesity. And so those would be obvious potential opportunities for synergy and partnerships as well.

Okay. And in terms of 5138-3, what are the studies remain to be done in terms of filing the IND?

Ken, do you want to comment there?

Yes. So as you are aware, right, there's a process of box checking with respect to construction of an IND from an FDA review purpose, and -- so we're in the midst of that. We're not going to kind of parse that out and give updates on individual pieces. But I think on the next call, we'll be able to give you a better sense of where we are in that process.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Joe Sarret for any closing remarks. Please go ahead.

Thank you, everyone, for joining us this afternoon. We look forward to updating you on our continued progress on our next call. Chuck, would you please conclude the conference call?

Yes, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.