Phaxiam Therapeutics SA (PHXM) 2021 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the ERYTECH business update and financial highlights for the second quarter of year 2021. (Operator Instructions) Please be advised that today's conference may be recorded. (Operator Instructions)

I'd now like to hand the conference over to your speaker today, Gil Beyen, Chief Executive Officer. Please go ahead.

Thank you, Liz, and good afternoon. Good morning. (Spoken in French) Thank you for joining us for our earnings call to discuss the highlights and financials for the first half of this year. I hope everyone is well and safe today wherever you may be taking today's call.

We announced our business and financial update yesterday evening, September 20. The press release and the first-half earnings presentation can be found on the -- in the Investor sections of our website.

Joining me here today on this call are Dr. Iman El-Hariry, our Chief Medical Officer, together with me here in Boston; and Eric Soyer, our Chief Financial and Chief Operating Officer, dialing in from Léon.

And switching to Slide 2 and before starting, indeed, I would like to draw your attention to the disclaimer to remind you that today's call includes forward-looking statements such as relating to the company's operations, anticipated timelines, and financials. As you know, they all involve risks and uncertainties that could cause actual timings and results to differ materially.

Now switching to Slide 3, the agenda for the call. I will, as usual, start with a short introduction and present the key business highlights of the year and the year to date and focusing on the more recent ones, the ones that occurred after our last call in May.

Iman will then provide an update on the status and the progress of our four clinical programs to date, after which Eric will present the financial results for the first half of the year.

He will also summarize the expected milestones for the coming year before we then open up the lines for Q&A, and both -- all three of us will be available to answer your question afterwards.

Moving to Slide 4, the introduction for anyone new to the company. Here is a brief overview of ERYTECH. We are the leader in red-blood-cell-based cancer therapeutics, as you know. Our focus is on targeting cancer cells, altered amino acid metabolism, an increasingly important and exciting area of cancer therapy.

In this area, we have late-stage clinical programs, pancreatic cancer, triple-negative breast cancer, and acute lymphoblastic leukemia. And as I noted at our last call, the upcoming quarter, the fourth quarter, is truly a key quarter for ERYTECH with some inflection -- some key inflection points for the company.

We have -- as you know, we have four clinical program programs ongoing, two of them potentially pivotal, potentially supporting an application for regulatory approvals. And for both of them, we expect important news this quarter; more on that in a minute.

Just to summarize the introduction, we are producing our product in two fully operational facilities, one in Léon to serve the European market and one in Princeton for the US market. And also, in terms of shareholder base, very balanced between Europe and US with a Euronext and a NASDAQ listing with roughly 50-50 shareholder base.

And then the highlights for the year, Slide 5. Again, it has been -- we've made critical steps forward since our last call or the first half of the year to bring our lead product, eryaspase, to patients in need and this both in Europe and the United States.

And the four highlights I'd like to mention, starting with TRYbeCA-1, of course, our Phase 3 trial in second-line pancreatic cancer, the work towards the final readout is continuing -- continued in full force over the summer and is continuing. And now, the eyes are really on the results, which we continue to expect in the fourth quarter of this year.

So TRYbeCA-1 is, to our knowledge, the largest clinical trial ongoing in second-line metastatic pancreatic cancer and has the potential, if successful, to lead to a treatment paradigm shift against this terrible disease. This study was initiated three years ago.

And so now, we are indeed fully -- the highest focus on top-line results not that far away. And Iman will tell some more about this.

Then our second highlight is in acute lymphoblastic leukemia, more in the -- specific in ALL patients who develop hypersensitivity to pegylated asparaginase. Progressing, we had positive data, as you know, presented at ASH.

We then had the dialogue ongoing with the FDA, met with a pre-BLA meeting in June, after which, in July, we confirmed our intention to submit a BLA by year-end.

This, obviously, subject to successful completion of remaining tests as discussed during the pre-BLA meeting. Also in June -- no, that was in July, we were pleased that we then were granted the fast-track designation for the treatment of ALL. And so now, the teams are working indeed to the BLA submission before the end of the year.

Third highlight, back to pancreatic cancer, but now first line and highlight from our IST trial that is ongoing in Georgetown University. The trial completed its first dose of three patients already before our previous call.

In the meantime, the second dose is fully enrolled, and we are eagerly awaiting the final results on safety. If everything continues to go as we have seen so far, we should be able to determine the MTD shortly.

And then lastly, on this slide, the successful financing, $30 million registered direct offering that was done in May that prolonged our cash [runway] into the second quarter. But also here, I will leave to Eric, who will provide more detail shortly.

On the next slide, Slide 6, you see all of this summarized in an overview. I will not repeat. You see the checkmarks to a lot of achievements over the past months of the year, and then indeed a concentration of milestones: two key ones in the in the fourth quarter, the Phase 3 results, and the BLA submission in ALL, but also significant and defining milestones in the coming 12 months or so.

I'll stop here and hand over to Iman to provide additional color and detail on our four clinical programs and their expected milestone. Iman, the floor is yours.

Thank you, Gil. Good morning, United States. Good afternoon, Europe So I'll provide a quick update and overview on our three main indications with -- for ALL pancreatic cancer, triple-negative, as well as the ALL indication.

So starting at Slide 8, you have seen this slide before. This is our TRYbeCA-1 slide, TRYbeCA-1 study, which is -- areas that in combination with chemotherapy in second-line advanced pancreatic cancer.

As you know, this study is -- it's our Phase 3 pivotal trial, 500 patients -- enrolling patients with Stage 3 and Stage 4 disease with good performance status.

And these patients were randomized to receive chemotherapy with or without eryaspase. At that point, chemotherapy was a menu of two, either [Gem/Abraxane] or irinotecan-based chemotherapy.

As a pivotal trial, the primary endpoint is overall survival, and we have always expected secondary endpoints, particularly key one is progression-free survival.

Here, investigators' assessment as well as objective response, disease control rate -- we'll be looking also at quality of life and safety and biomarkers.

The study operationally was actually executed in 11 countries in Europe as well as United States, almost over -- almost 100 sites participating in this trial and was co-led by Professor Pascal Hammel and Professor Hidalgo in the United States.

Just also to remind you of the study appliance in terms of the statistical design, so study is set to look at an improvement in overall survival with a hazard ratio of 0.725 in favor additional eryaspase treatment.

This is based on control -- overall survival -- median survival in the control arm of six months. And so, we're looking at improvement from six to roughly 8.3 months in the active arm.

So this is our plan for the study. So moving to Slide 9, just give you some quick highlights what we have done so far. Studies have completed enrollment end of last year. We ended up with 512 patients in total. We actually were very happy with the study enrollment.

This was a major achievement, not only for the company, but of course, for the patients who participated in the trial despite the pandemic that hit all of us back in early 2020, so -- which also was didn't have a major impact in terms of the enrollment or the quality of the patients participating in this trial.

The study had an IDMC on board, and the IDMC met four times during the life of the study so far. The first three meetings were safety reviews. There were no safety issues. And then, the last one was conducted last February this year, and this was our first and only interim analysis for efficacy but also safety review.

Based on their recommendation, the study continued to final analysis. We are expecting the trial results in the first quarter of this year, [but are] -- I can tell you -- we're all working day and night to make sure that we have the data cleaning and the results planned as guided to the market.

And I also wanted to make sure that -- to confirm that we continue to be blinded to the study. So -- and that is -- it's a Phase 3 trial, and we need to (technical difficulty) the integrity of the trial.

Moving to Slide 10, so switching gears, also in the same indication this is our investigator-initiated Phase 1 study in first-line pancreatic cancer, which is led by Dr. Noel in Georgetown University. So the study is [reaching] to assess the safety and tolerability of eryaspase in combination with modified FOLFIRINOX in this setting.

FOLFIRINOX it is becoming increasingly popular chemotherapy of choice in that setting and therefore needs a lot of good rationale for us to assess the [combinability] of our drug with this chemotherapy regimen. And as a Phase 1 trial, the primary endpoint is safety and really getting that recommended Phase 2 dose for future study in that setting.

Studies started beginning of this year, started with a dose cohort of 75 units. But actually, it's 75 units per kilogram, and -- there's just a typo there. So as you know, the dose of eryaspase, which we are using in our indication, is 100 units per kilogram. So we started with slightly lower dose, and there was no DLT observed.

And therefore, the [site], in fact, escalated to the second and final dose cohort, which is 100 units per kilogram. We -- this cohort was already fully enrolled, and we are waiting for the last patient in that cohort to clear for any dose-limiting toxicity.

If that is the case, hopefully, soon, we'll be able to declare our recommended Phase 2 dose, which, hopefully, will be the 100 units per kilogram. So we are expecting these results -- again, the confirmation, again, in -- really, in the first quarter now of this year. So that covers the pancreatic indication.

So moving to Slide 11, we also had a webinar at the beginning of this month, where Professor Hidalgo and Dr. Noel participated. That was -- the news was really a good webinar. Lots of questions were addressed. And basically, the key outcome of this webinar is that number one, pancreatic cancer continues to be unmet medical need.

You know that Onivyde so far is the only approved drug in second-line setting. And also -- so there is certainly room for new treatments and improving survival in these patients.

So moving to Slide 12, so switching gears now to our second indication, which is the triple-negative breast cancer. It's another highly unmet medical need. So we are starting with a proof-of-concept trial led by Dr. Awada in Jules Bordet in Belgium, in Brussels.

And this study is a small, randomized trial of 65 patients in total in first- and second-line setting to assess the clinical activity of eryaspase when added to [gemcitabine/carboplatin].

So far, this trial is a European-only trial, and we have a steering committee [that they met], and they should have used the safety profile so far. And again, no issues, given this is, again, our first combination, and we did not do a Phase 1 trial. So we are expecting our interim data, initial/interim data, in the first half of 2022.

Moving to Slide 13, so this will be our next indication, ALL, and this is, for us, a very exciting opportunity for several reasons. Really, it's addressing, again, another unmet medical need.

It's important for the patients who develop hypersensitivity reactions to asparaginase, particularly pegylated asparaginase, which is the standard of care in -- for treating these patients.

So ALL indication is based on a NOPHO-sponsored study. It was a Phase 2 trial that was presented last year at ASH 2020. And in that trial, which -- around 55 patients in total.

Patients who have developed hypersensitive reactions were switched to receive eryaspase with the same backbone chemotherapy to be able to complete intended courses of asparaginase therapies.

The trial showed that asparaginase activity was maintained in most, if not all, of those patients with a very good safety profile; more importantly, the convenience of treatment since eryaspase is a drug that is given once every two weeks that provides also a better quality of life for -- particularly for the pediatric definition.

With this, it really -- it recapped our -- it confirmed our view that we do have an [unmet medical need]. It's in patients, which represent about 15% to 20% of this definition.

While there are two drugs approved that we need, which have suffered long-term supply shortage, but newly approved -- Rylaze by Jazz -- still, there is an important need for -- a critical need to have an additional option for those patients and the ability at least for the convenience of treatment.

So with eryaspase, we end up with two administrations per month as compared to 12 to 15 patients. And you can imagine the impact of this number of administrations, particularly if you have a kid, one-year-old or two-year also. It is certainly a factor that needs to be considered.

The positive news for us so far that we have met with the FDA last June, three months ago. This is our pre-BLA meeting. And soon after, we have been granted Fast Track for ALL, which, for us, is becoming very important as it helps us in our continuous dialogue with the FDA. And that's really the whole value of Fast Track designation.

We have guided before that we will have -- we intend to have our submission expected in the fourth quarter, and this will be contingent on our successful completion of all the remaining activities.

So with this, I would stop as of here, and then hand over to Eric Soyer, our Chief Financial and Operating Officer, who will provide us with the financial update and the news flow.

So over to you, Eric.

Thank you. Thank you very much, Iman. Good morning, everyone. (Spoken in French) We will now move into Slide 15 of that slide deck. [We will] review the financial highlights for the first half of this year, and we're starting with P&L information.

As you can see, the net loss for the first half of '21 was EUR28 million, and that's down EUR7 million, minus 20% year over year with a EUR6.4 million decrease, minus 18% in operating loss, and then EUR0.6 million increase in financial income.

The EUR6.4 million decrease in operating loss was attributable to the EUR5.6 million decrease in pre-clinical and clinical development expenses.

And of course, that's concurrent with the completion of patient enrollment in the company's Phase 3 trial in pancreatic cancer, TRYbeCA-1; also, a EUR0.3 million decrease in G&A expenses and a EUR0.4 million increase in other income, mostly related to R&D tax credits.

The EUR0.6 million increase in financial results was mostly related to foreign currency gains on the US dollar. And now, we're moving to the next slide, 16, for comments on cash.

As of June 30, 2021, ERYTECH had cash and cash equivalents totaling EUR46.3 million, which is approximately $54.9 million; and that compares with EUR44.4 million, approximately $54.4 million on December 31 last year and EUR37.4 million on March 31 this year.

That's a EUR1.4 million (sic - see Presentation, Slide 16, "EUR1.9 million") increase in cash position during the first half of '21.

And that was the result of a EUR32.9 million net cash utilization, including EUR32.6 million in operating activities and EUR0.3 million in investing activities; also, a EUR34.1 million generated in financing activities, and that's including an $8 million placement in the US through the company's at-the-market or ATM equity financing program for net proceeds of EUR6.4 million.

Also, the $30 million registered direct offering for net proceeds of EUR22.9 million and the drawdown of two tranches under the convertible notes, the OCABSA program, the financing agreement that was signed with Alpha Blue Ocean in that year for net proceeds of EUR5.7 million.

And finally, we have the variation of the US dollar against the euro, and that led to a EUR0.7 million positive currency cash impact.

Moving to the next slide, 17, with a word on our most recent financing initiatives. You remember that on April 29 this year, we announced the registered direct financing with several healthcare-focused institutional and accredited investors with the placement of ADS, American Depository Shares, at $7.25. That's EUR6.01 per ADS and also associated with a 75% warrant coverage, the two-year warrants with an exercise price of EUR7.50 per share.

This reduced the direct financing associated with the [minor] OCABSA tranches that were called to date [have] extended covenant cash horizon to Q2 next year, Q2 2022.

This cash horizon could possibly for -- be further extended to Q3 '22 if the company further utilizes the OCABSA agreements, of course, assuming current market price and, of course, subject to the regulatory limit of 20% dilution.

Finally, moving to the next slide, 18, I want to quickly summarize the upcoming key milestones before the -- we will start the Q&A session. That's, of course, the top-line results for TRYbeCA-1, the Phase 3 trial of eryaspase in pancreatic cancer. And as explained by Gil and Iman, we expect these top-line results quite soon in Q4 2021.

We also, before the end of the year, have the potential BLA filing of eryaspase that's for hypersensitive patients of ALL patients. Again, looking forward to potentially the BLA before the end of the year.

Also, we'll have the determination of the MTD, the maximum tolerated dose, in rESPECT, the Phase 1 trial in first-line pancreatic cancer also before the end of the year.

And then towards the first half of next year, we look forward to potential BLA filing for eryaspase in second-line pancreatic cancer following the top-line results of TRYbeCA-1 and also the initial data from the Phase 2 trial in breast cancer, the current -- the ongoing TRYbeCA-2 trial, and that's also expected in the first half of '22.

With that, I would like to thank you already for your attention, and we'll open the call for any questions you may have.

Again, I will be repeating myself and reminding any of you who would like to ask a question in French that you are, of course, very welcome to do so. (Spoken in French)

Operator, please, back now over to you.

(Operator Instructions) Boris Peaker, Cowen.

Good morning. Can you hear me?

Yes, Boris. Good morning. How are you?

Good. How are you? A question that comes up frequently is how does the patient enrollment in your pivotal pancreatic cancer compare to the Phase 2 study in terms of geography, age, or any other characteristics as well as any follow-up care differences.

I'll leave this to Iman to answer.

Hi, good morning, Boris. So compared to the Phase 2 trial, the overall patient characteristics, they are highly similar to what we have in terms of the inclusion/exclusion criteria. The real difference here is -- which we don't believe is going to have any impact -- is the Phase 2 trial, [who] was a French-only study, whereas the pivotal trial naturally was a global trial in Europe and United States.

So that is the -- just the geographical difference. France remains still our highest-enrolling country in the Phase 3 trial followed by [Spain]. So with that in mind, we actually -- compared to the Phase 2 trial, if you remember, most patients received [FOLFIRINOX or FOLFIRI or FOLFOX] in the first line.

So almost 90% of our patients in the second line were gemcitabine-based therapy in the Phase 3 trial that we're expecting also to have more patients receiving Gem/Abraxane in the second line, still going to be 90%.

This probably would be closer to one-third of that. What would be the difference? We have two webinars, and that is actually the same view from Professor Hidalgo, which confirms also our view, which is we don't believe that the backbone chemotherapy will make really much of a difference in terms of the activity of eryaspase in combination with either choice.

But otherwise, [for some] performance status, it's the same, of course, progression after first-line therapy; and many other inclusion/exclusion criteria, virtually the same.

Great. Well, thank you very much, and we all look forward to the big data reveal. Thanks for taking my questions.

Thank you, Boris.

And I'm not showing any further questions at this time.

I think, then, if no further questions, I think we must be very, very clear. And so, I want to thank you all for your attention and for your continued support. And as Boris said, it is now indeed looking forward to the data in the next quarter to come.

So we'll obviously keep you posted, as always. In the meantime, we wish you a great day and a great afternoon in Europe. Thank you all. Take care. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.