Immunic Inc (IMUX) 2016 Q2 法說會逐字稿

Good afternoon, my name is Laurel, and I will be your conference operator today. At this time, I would like to welcome everyone the Vital Therapies' Second Quarter 2016 Financial Results Conference Call.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be as question-and-answer session. (Operator Instructions) Thank you.

I'll now turn the call over to Al Kildani, Vice President of Investor Relations and Business Development. Please go ahead sir.

Thank you, Laurel. Good afternoon. My name is Al Kildani, Vice President of Investor Relations and Business Development. Thank you for joining Vital Therapies' management team on our conference call to discuss the Company's operations, update and results for the second quarter ended June 30, 2016.

On today's call are several members of the Vital Therapies' senior management team, including Dr. Terry Winters, Co-Chairman and Chief Executive Officer; Dr. Duane Nash, President; Mike Swanson, Executive Vice President and Chief Financial Officer; Rob Ashley, Executive Vice President and Chief Technical Officer; and Dr. Jan Stange, Chief Medical Officer.

Before we begin, we'd like to remind you that some of the statements we make today will include forward-looking statements, such as statements related to the timing and conduct and enrolment of our clinical trials, future clinical trial results, the timing of certain development goals, including regulatory filings, possible mechanism of action of ELAD, our projected cash runway and plans and objectives of management for future operations.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual events or results to differ materially, including the risk at our clinical trials program is delayed or is ultimately unsuccessful. Please note that these forward-looking statements reflect our management's views only as of today's date and we disclaim any obligation to update any forward-looking statements expect as required by law. Please refer to our SEC filings for a discussion of the risk factors that could cause actual events or results to differ materially.

Vital Therapies promptly makes available on its website reports that the Company files with or furnishes to the SEC, corporate governance information, press releases and other posters and presentations. A replay of this call will also be available on our website later today.

I would now like to introduce Dr. Terry Winters, Vital Therapies' Co-Chairman and CEO.

Thank you, Al, and good afternoon, everyone. Welcome to our second quarter 2016 update call. Our prepared comments will be relatively brief this afternoon. First, our usual summary of the company for those of you who may be new to our story.

We are developing ELAD, an extracorporeal human allogeneic cellular therapy, which could improve survival in acute forms of liver failure. ELAD is at the phase 3 clinical trial stage and has Orphan Drug Designation in the U.S. and the E.U. Assuming successful clinical results in the future, we plan to seek regulatory approval and to commercialize ELAD directly in most major markets of the world.

VTI-208 in our first phase 3 trial which reported top line data last August, enrolled 203 subjects primarily in severe acute alcoholic hepatitis, but did not meet its primary or secondary survival endpoints. However, the encouraging data from pre-specified subgroups combined with post-hoc analysis led us to the design of a new phase 3 trial called VTL-308, which is now in progress.

The agenda for today's call will be to review the status of the VTL-308 trial and then to update on our continuing work on ELAD's mechanism of action, to review our financial results, and finally, we will open up the call for Q&A.

So first, the status of or VTL-308 phase 3 clinical trial; this trial is our priority and the quarter has been one of blocking and tackling to implement the details of clinical trial management, including regulatory filings, site contract details, and screening and enrolling of subjects.

As we announced on May the 23rd, we achieved our goal of enrolling the first subject in the trial during the first half of this year. As of today, we have enrolled a total of eight subjects in the VTL-308 trial at sites in the United States and Europe.

Currently, 23 sites are open for enrollment in the U.S. and in Europe and they are all actively screening subjects. We are not using a CRO to run this trial; we're managing it ourselves under the capable direction of Andrew Henry, our VP Clinical Operations. In addition to giving us more control over the progress of the trial, we believe that our direct management time yields time and cost savings.

We also believe we are still on-track to deliver top line results for our VTL-308 trial by mid-2018. However, it is early in the trial process and we need to continue to open sites and to screen and enroll patients.

Turning to our R&D, we have continued our work on the mechanisms by which our VTL C3A cells prevent the death of human liver cells in cell culture. Some of these data have been submitted through presentations at scientific meetings later this year.

We are also continuing our work to relate the mechanisms of action that we have elucidated over the past year to outcomes in our past clinical trials. This is being done primarily by searching for markers of inflammation, regeneration, detoxification, and cell death in blood samples taken from treated and controlled subjects in the VTI-208 trial. We hope to report more on this soon.

I'll now turn the call over to Mike Swanson, our Chief Financial Officer.

Thank you, Terry. We ended the second quarter with cash and cash equivalents of $73.6 million. Our average monthly cash usage for operations and capital expenditures during the first six months of the year was approximately $3.2 million. We expect our use of cash will vary based primarily on the timing of enrollment in our VTL-308 trial. Through June 2016, we have now raised net proceeds of $8.8 million under an at the market sales agreement since initiating the program in March selling 1.1 million shares at an average price of $8.71 per share.

Summarizing our results for the quarter ended June 30, 2016; the company reported a net loss of $9.5 million or a $0.30 basic and diluted loss per share. Non-cash expenses for stock-based compensation, depreciation and amortization totaled $1.5 million in the second quarter of 2016. This compared to a net loss of $15.1 million or $0.63 basic and diluted loss per share for the second quarter of 2015 which included non-cash expenses of $1.3 million for stock-based compensation, depreciation and amortization. For more details on these financial results please refer to our press release issued today and our 2016 Quarterly Report on Form 10-Q.

Thank you. And with that I'll turn it back to Terry.

Thank you, Mike. Before we take your questions, I would like to summarize our anticipated key upcoming milestones. First, there will be quarterly reports on the progress of the VTL-308 clinical trial. Second, there will be additional presentations on ELAD mechanism of action expected at various scientific meetings in 2016. Third, a possible publication of the VTI-208 results in a peer reviewed journal later this year.

I would now like to open up the call to your question in addition to Mike joining me for the Q&A portion of our call are Dr. Duane Nash, our President; Rob Ashley, Executive VP and Chief Technical Officer; and Dr. Jan Stange, Chief Medical Officer.

Operator, could you please provide instructions and open up the call for questions.

Thank you. (Operator Instructions) Your first question comes from the line of Katherine Xu of William Blair. Your line is open.

Thank you, and good afternoon. I have a couple of questions. So with regard to the enrollment of VTL-308, you already enrolled eight patients. I'm just wondering how many patients did you screen to actually enroll those eight. Is that percentage higher or lower or in line with your expectations based on -- as far as the time, it's much for restricted inclusion criteria?

Can we take that question first?

Sure.

Great. [Jan, would you comment]?

Yes, there is are two different levels of screening or prescreening as when we look at everyone with -- in the vicinity of the inclusion criteria and then as the actual screen level is when patients come close to qualify and paperwork is submitted through the site. So for those -- and I'm only referring to the second level, we've screened 17 subjects to get eight enrolled.

You said you had another question, Katherine.

Yes sir, I didn't quite hear. How many patients did you screen to get the eight enrolled? I didn't catch it, sorry.

Just the 17 that are on the database we have screened in order to get those -- of course, we reach out far into referring sites and pre-screen far larger number of patients, of course.

Got it. Okay. My other question is more kind of theoretical, so we understand that in the retrospect its subgroup analysis from the 208 study where you had the 60 patients that had the pretty much the inclusion criteria for the phase 3 study right now. And in those -- in that subset, the hazard ratio was extremely impressive 0.28 and the survival 90-day, 180-day was also very meaningful. But, of course, at the same time this is again retrospective, subgroup analysis, which is statistically strong or weak. I wonder can you name a few prior studies that are of the similar nature, it was based on the retrospective subgroup analysis that turned out to be successful.

You mean our analysis or someone else's?

Someone else's, sort of any precedent of this because I think what is in people's mind are -- on the one hand, the subgroup analysis seems to be very strong, but of course it's compromised by the theoretical risk there just embodied with the subgroup analysis. So just wondering from your survey of literature any success with studies that were actually turned out based on a retrospective analysis?

Rob, you want to take down or would you, I mean?

I think one that sort of springs to mind was the Dendreon work were originally subgroup proved. The whole analysis proved negative and then subgroup analysis that were then proven prospectively supported the marketing authorization and the BLA filing.

Every situation is different and I think what I would say Katherine is that whenever you do a clinical study, you learn something which you then apply to the next clinical study, and in a sense every evolving clinical development program is evolving as a result of the data that you had previously.

In our case, whereas you're absolutely, right, the subgroup analysis were post-hoc and albeit based on pre-specified data. I think as this development program has evolved all the way through, we learn from our previous studies and apply those learnings to maximize the opportunity for the next study. And I think that's probably true of a lot of the biotechnology industry.

Thank you.

Your next question comes from the line of John Newman with Canaccord. Please go ahead.

Hi guys, thanks for taking the question. I just wondered are you using the same number of clinical sites as the prior phase 3 in terms of enrolling patients. And can you describe the process with the Data Safety Monitoring Board for the study in terms of how often there will be meaning to take a look at the study to see how it's coming along? Thanks.

Well, the answer to the first question is we're using about the same number of sites. As I recall, we had just over 40 sites in VTI-208 and we are going to be using approximately the same number here.

For the second question, I think I'd like to ask Dr. Stange to respond.

Yes. The Data Safety Monitoring Board now look on this stuff, American and European members, and they will meet once monthly and we'll always be updated about the course of adverse events, severe adverse events coming into the trial which of course includes also [bad].

Right. And given the study's open label, do you plan on taking any interim looks or at this point you just plan on waiting until the study is complete?

We are not planning any internal looks.

Okay, great. Thank you.

Thanks, John.

(Operator Instructions) Your next question comes from the line of Edward Nash with SunTrust. Your line is open.

Hi, this is Mike Guo on for Edward, thanks for taking the question. So two question. The first one is that if I'm not mistaken, you have to observe 55 events in order to close the trial, the phase 3 trial. So have you observed any kind of mortality from the trial?

My response is too early to comment on that.

Yes, we haven't looked at the mortality events. Rob, do you want to talk in a general sense about how we're going to assess the 55 after we've enrolled a 150?

Yes, we will look at the overall mortality rate for this study and if that rate is unexpectedly low then we have the opportunity to expand the study. We won't be looking at the mortality rate between the control and ELAD arms. But at the moment obviously, with just eight patients enrolled, we're way too early to estimate that.

Okay, got it. That's helpful.

So do you have another question, Mike?

Yes, I have another question. So regarding the funding for phase 3 trial, so just wonder for ATM, how much remain do you have -- can you draw from ATL and whether that amount of money can be sufficient to fund the phase 3 trial data?

Duane?

Sure. So I believe the size of the ATM in series, $75 million, but we have no intention of drawing down anywhere near that amount on the ATM. I think we've said that current cash still gets us into early 2018 and data is mid-2018. So I'm not sure we can provide any more color on precise numbers, but I think one can get a sense that that's not a tremendously large number.

Okay, got it. That's helpful. Thanks a lot.

Okay, thanks.

Ladies and gentlemen, there are no further questions at this time. I turn the call back to the presenters for closing remarks.

Okay, well thanks for joining us on the call, appreciate all the questions. Have a great rest of the summer, and we'll see you on the next call, I believe, probably sometime in early November. Meantime, we're going to continue our blocking and tackling. Bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.