Biomx Inc (PHGE) 2023 Q4 法說會逐字稿

Good morning, and welcome to the BiomX full year 2023 financial results and corporate update conference call. (Operator Instructions)

I'd now like to turn the conference over to Avi Gabay, Interim Chief Financial Officer of BiomX. Avi, please proceed, sir.

Thank you, and welcome to the BiomX full year 2023 financial results and corporate update conference call. The news release became available just after 6:30 AM Eastern Time today, and it can be found in our website at www.biomx.com. A replay of this call will also be available in the Investors section of our website.

Before we begin, I'd like to review the Safe Harbor provision. All statements on this call that are not factual historic statements may be deemed forward-looking statements. For instance, we are using forward-looking statements when we discuss on the conference call the sufficiency of the combined company's financing, potential stockholder approval of certain matters related to the securities issued and related matters in connection with the Adaptive Phage Therapeutics or APT acquisition, potential market opportunities, the ability to drive value for stockholders, the design, aim, expected timing, and interim and final results of our preclinical and clinical trials, the regulatory process and discussion with the FDA, the potential benefits and commercial opportunities for our product candidates, and the potential safety or efficacy of BX004 and BX211.

In addition, past and current preclinical and clinical results, as well as compassionate use, are not indicative and do not guarantee future success of our clinical trials. Except as required by law, we do not undertake to update forward-looking statements. The full Safe Harbor provisions, including risks that could cause actual results to differ from these forward-looking statements, are outlined in today's press release, which, as noted earlier, is on our website.

Joining me on the call this morning is Jonathan Solomon, Chief Executive Officer of BiomX. With that, I will turn the call over to Jonathan.

Good morning, everyone. The fourth quarter of 2023 proved to be one of the most significant and exciting periods of our company, highlighted by the positive results from Part 2 of our Phase 1b/2a study of BX004. Two months after achieving this major clinical milestones, we announced a transformational acquisition of APT in March, adding to our pipeline, a second Phase 2 product candidate, BX211, for the treatment of diabetic foot osteomyelitis.

In connection with this acquisition, we also raised $50 million in a private placement led by affiliates of Deerfield Management and AMR Action Fund with the participation of additional existing and new investors, including the Cystic Fibrosis Foundation, Orbimed, and Nantahala Capital. We deeply value and appreciate the support from these widely respected institutional investors. Including net proceeds from the financing and our existing capital, BiomX now expects to have sufficient funding to reach multiple clinical milestones over the next two years, including expected data readouts for BX211 and BX004 in the first quarter of 2025 and third quarter of 2025, respectively.

With approximately 80 compassionate use cases, multiple clinical studies, and INDs, the combined company possesses an extraordinary depth of clinical experience in developing phage products along with the expertise in regulatory affairs to help further advance these programs into pivotal testing. The acquisition created a leading phage company with one of the most advanced pipelines of phage-based therapeutics, which includes two clinical-stage products, each having the potential to advance the standard of care in their respective disease area. As noted, the combined company has two significant Phase 2 readouts anticipated in 2025, which, if successful, could potentially drive significant value for stockholders.

I would like to spend more time today focusing on our new program in diabetic foot osteomyelitis or DFL in our ongoing Phase 2 clinical study. The study has already surpassed 70% of our target enrollment, and we remain on track to report the week 13 treatment results in the first quarter of 2025.

Ulcers in patients with diabetes are a complication caused by a combination of poor blood circulation, susceptibility to infection, and nerve damage from high blood sugar levels. When there is limited blood flow to the wounded area, the body struggles to heal its wounds. So these wounds develop into diabetic ulcers. Once infected, ulcer deepens to the extent that it spreads into the bone, the condition is classified as DFO, which is a very serious condition that could lead to lower limb amputation.

DFO standard of care often includes offloading of pressure from the foot to perform surgery, and up to six-week course of topical oral or IV antibiotic therapy. Unfortunately, 30% to 40% of the DFO cases fail leading to amputations. Depending upon the location of the infected bone, amputations often result in the loss of a toe or in more severe cases, the loss of a limb below or above the ankle. With a staggering number of approximately 160,000 lower limb amputations in diabetic patients annually in the US alone, 85% of which are caused by DFO, according to the Centers for Disease Control and literature, this remains an area of a high unmet need.

One of the main reasons for the limited effectiveness of antibody therapy is poor delivery as a therapy to the infected bone. Biofilm, a polysaccharide mesh secreted by a bacteria infecting the bone and ulcer, creates a barrier to inhibits antibiotic penetration in these patients who already suffer from poor blood circulation. Beyond delivery, antibiotic resistance is an additional contributing factor to the limited effectiveness of antibiotic treatment. For example, according to literature, approximately 40% of staphylococcus aureus infections are MRSA or methicillin-resistant staphylococcus aureus.

Phage therapy has the potential to address these key drivers for treatment failure. When properly selected, phage effectively target and kill antibiotic-resistant bacterial strains and have the capacity to break down faster. For example, phage were selected for the treatment of patients under our current DFO study, and were found, when sequenced, to have multiple domains of catalytic activity against staphylococcus biofilm components.

Moreover, a main factor that supports phage therapeutic approach to improved human outcomes in DFO are our deposit results from numerous compassionate cases using phage therapy. Out of 12 cases reported in the scientific literature, 11 resulted in positive outcome of wound healing and avoiding amputation.

BX211, developed under APT's technology platform, is based on personalized approach, which utilizes one of the largest phage banks in the world to optimally pair individual phage therapy to the specific strains of bacteria as biopsied from the patient. The treatment target staphylococcus aureus, which is considered the most common bacterial infection in DFO, compromising approximately 50% of cases and is considered the most pathogenic bacteria due to its rapid doubling time, an arsenal of virulence factors. We estimate that the BX211 represents a commercial opportunity of $1 billion in the US and over $2 billion worldwide.

We are now conducting a randomized, double-blind, placebo-controlled, multi-center Phase 2 study investigating the safety, tolerability, and efficacy of BX211 in subjects with DFO associated with staph aureus. Approximately 45 subjects are planned to be randomized at a 2:1 ratio to BX211 or placebo. BX211 or placebo is administered weekly by topical and IV rod at week one. And by the topical round, only at each of weeks 2 to 12. Over the 12-week period, all subject continues to be treated in accordance with the standard of care, which includes antibody treatment as appropriate.

As of now, we have enrolled 32 patients in the study, which amounts to over 70% of the target enrollment and are on track to report results at week 13, evaluate healing of the wound associated with osteomyelitis in the first quarter of 2025. We then expect to report a second readout in the first quarter of 2026, which is planned to evaluate amputation rates and resolution of osteomyelitis based on x-ray, clinical assessment, and established biomarkers such as ESR and CRP at week 52.

With respect to cystic fibrosis or CF program, in the second quarter of 2024, we expect to hold a Type C meeting with the FDA to discuss our clinical development plan for BX004. Assuming alignment with the FDA and the completion of our CMC work, we intend to submit a protocol to all relevant regulatory authorities, and following approval, begin patient enrollment in Phase 2b study. As already noted, we estimate releasing top-line results from this study in the third quarter of 2025.

And now, I'll pass it over to Avi to review our fourth quarter end full year 2023 financial results.

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-K, which will be filed later today. I will walk you through some of our brief highlights.

As of December 31, 2023, cash balance and short-term deposits were $15.9 million compared to $34.3 million as of December 31, 2022. The decrease was primarily due to net cash used in operating activities.

In 2023, our R&D expenses net were $16.7 million compared to $16.2 million in the previous year, mainly because of increased expenses related to the CF clinical trial that was partially offset by reduced salaries and related expenses and stock-based compensation expenses as well as pausing in the development of the atopic dermatitis clinical trial. In addition, increased consideration from research collaboration, which resulted in reduced R&D expenses.

General and administrative expenses were $8.7 million for 2023 compared to $9.5 million for the prior year. The decrease was primarily due to a decrease in company's directors' and officers' insurance premiums.

Net loss for 2023 was $26.2 million compared to $28.3 million for the prior year. Net cash used in operating activities for 2023 was $21.3 million compared to $29.1 million for the same period in 2020.

On March 15, 2024, we closed the acquisition of APT concurrent with an investment of $15 million. Subsequent to this financing, we have fully repaid the remaining balance of approximately $10.4 million under the Hercules loan agreement. We would like to emphasize that although after the financing, we have sufficient cash, cash equivalents, and short term deposits to fund our current operating plan for at least the next 12 months.

Our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. This is mainly due to the potential risk of our stockholders, not approving the conversion of the convertible preferred stock that were issued as part of the acquisition of APT and the concurrent investment.

And now I'll turn the call back over to Jonathan for his closing remark. Jonathan?

Thank you, Avi. 2024 is shaping up to be a substantial year for BiomX. With the completion of the APT acquisition and the $50 million investment from top institutional healthcare investors, our company is well positioned to build significant value for stockholders as we continue advancing the BX004 and BX211 clinical programs. BX004 has already demonstrated safety and proof-of-concept efficacy in our Phase 1b/2a study. We look forward to reporting data on both BX004 and BX211 in 2025.

We have also added additional scientific and business leadership to our Board of Directors that will play an important role in helping guide our clinical development efforts and interaction with regulatory authorities while also helping us optimize our capital resources.

Thank you again for joining us this morning, and we look forward to providing you with updates throughout the year.

(Operator Instructions) Joe Pantginis, H.C. Wainwright.

Hi, everybody. Good morning. Good afternoon. Thanks for taking the questions. So first, Jonathan, I just wanted to get the update since the merger. How is the process looking with regard to outstanding efficiencies? And what might still be outstanding of note?

So good morning, Joe. Great question. I think things are now moving as we go through the process. We're often in Gaithersburg now, and we're quite impressed with the team and the work that APT is doing. Of course, this is a process that will take a while and we're actively evaluating redundancies, there will be some. And it will take us a while to kind of finalize all the specific plans going forward.

Understood. And then if I could just -- I appreciate all the added details you provided today on DFO. So just to dive into the weeds a little bit. So one of the things I've been thinking, when you look at for DFO itself, to me, there's a lot of reminiscent characteristics of, say, critical limb ischemia, and one of the things, I guess, I would associate with that is obviously amputation rate is a key endpoint here, just like critical limb ischemia. And you know, there are a lot of aggressive physicians out there trying to be, I'll almost go so far as to say, cowboys, to try to prevent amputations where it might be necessary. So I guess the curiosity on my end is with different aggressive physician techniques or, say, maybe lack of standards, potentially, how does that impact what might be considered a placebo impact or placebo effect on this study?

So you're spot on. I think, you know, amputation is a much more complicated endpoint, and I think that when we look at it as more exploratory. Looking onto that, I think in this study, we're looking at a shorter time frame and focusing on the ulcer potential shrinkage and maybe healing some of these patients.

I do agree that amputation is tougher. There is an ongoing research and body of work on trying to look into the additional surrogate endpoints, they're looking at the x-ray and some other endpoints. So that might give us a better sense of the healing process in a shorter timeframe. There's also some KOLs which are looking at even shorter timeframe than the 12 weeks we're looking. So I think we'll see all of that.

Again in this study, we're looking at a shorter time point and way before, kind of, all of amputations kick in. We will obviously follow the patients for a longer period of time. We'll take all that information conversation with the FDA. But I agree, I think, if we can be very reminiscent of the discussions we had, yes. You can have and try to look at endpoints, which you could see, you know, see something going on earlier and hopefully with less patients, that's ideal because it is more difficult.

Yeah, absolutely. I really appreciate the color, Jonathan. Thanks.

Bet.

Michael Higgins, Ladenburg Thalmann.

Good morning, guys. This is [Furhana] on behalf of Michael. Congrats again from us on the adaptive acquisition being launched. Two questions from us. On BX004, any feedback for us or any additional data analysis you have going on from the past two data? And if yes, when might we see that additional data?

So good morning and thank you for the kind words. So far, we're not giving any guidance on anything new. We are considering presenting a few on the top conferences. So once we have it and get, you know, the acceptance, we'll obviously update.

I think the important activity that we're now gearing up to accept for the preparation for the next clinical study is obviously the meeting with the FDA. So that's something we're expecting in the middle of the year. That would be crucial. And again, as I said before, we are working hand-in-hand with the CF Foundation and this kind of represents probably the most advanced phage program. So I think there's a lot of interest in the feedback that the FDA will give us.

Okay, great. Thank you.

Bet.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further closing comments.

So I just want to thank everyone for joining us this morning and wishing you all a great day. And hopefully, we'll keep on updating you as we make further progress. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.