PLx Pharma Inc (PLXP) 2015 Q2 法說會逐字稿

Greetings and welcome to the Dipexium Pharmaceuticals second-quarter 2015 financial and operational results conference call. (Operator Instructions). As a reminder, this conference is being webcast. It is now my pleasure to introduce your host, David Garrett, Vice President of Finance and Corporate Development. Thank you, sir, you may begin.

Thank you, Adam. Good morning and welcome to the Dipexium Pharmaceuticals second-quarter 2015 financial results conference call. This morning we issued a press release providing financial results and Company highlights for the quarter ended June 30, 2015. This press release is available on our website at Dipexium Pharmaceuticals.com.

Joining me on the call today is David Luci, President and Chief Executive Officer, who will provide a corporate update and outlook for the remainder of 2015. Following David's comments Robert Shawah, our Chief Accounting Officer, will provide an overview of the financial highlights from the second quarter before turning the call back to David Luci for closing remarks.

As a reminder, during today's call we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions, estimates and projections about future events that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

Investors should consider these risks and other information described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed by March 23, 2015 and our quarterly reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements and Dipexium disclaims any obligation to update such statements at any time in the future.

In addition, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 13, 2015. Dipexium undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date and time of this conference call. I will now turn the call over to David Luci.

Thank you, David. Good morning, everyone, and thank you for joining us on this morning's conference call. Before I discuss the second quarter I'd like to remind you of the value proposition for Locilex, our lead compound.

Locilex is a potent broad spectrum topical antibiotic that kills bacteria by disrupting cell membrane permeability. It has the potential to become an ideal frontline treatment for patients with mild diabetic foot infection as well as other mild and moderate skin and skin structure infections.

We believe Locilex has several key differentiating features that point to its potential commercial success. It has demonstrated bactericidal title activity against a broad spectrum of pathogens including gram-positive, gram-negative, aerobic, anaerobic and resistant bacteria.

It has not generated resistant bacteria systemically. It has not generated cross resistance with other antibiotics. It has not been systemically absorbed allowing for higher dosing. And it has not caused any significant safety issues in over 500 patients treated in prior clinical trials.

Turning to the second quarter of 2015, we continue to advance our drug development activities for Locilex including increasing enrollment of our pivotal Phase 3 placebo-controlled clinical trials, OneStep-1 and OneStep-2, and continuing our manufacturing efforts.

In addition, we are continuing our work in Europe to prepare certain additional regulatory filings for submission in the second half of 2015.

In the second quarter we also closed our secondary public offering raising an additional $21.3 million in gross proceeds. We expect that our current cash balance can fund operations through 2017.

We announced recently that our abstract was accepted for poster presentation at the ICAAC conference in September. The presentation will describe the activity of Locilex against a broad spectrum of bacteria resistant to seven marketed or investigational topical antimicrobials. We find these data to be compelling and are delighted that this presentation was accepted by ICAAC.

In terms of enrollment, as you know, we reported in the first quarter that we passed 25% enrollment in the pivotal Phase 3 studies. Today we are pleased to report that our pivotal Phase 3 studies are now between 45% and 46% enrolled.

In terms of our CMC program, our API manufacturer is now manufacturing the first of three validation lots of active pharmaceutical ingredient, or API, that we will need for our planned submission of a new drug application in the United States and a marketing authorization application in Europe.

We are planning to initiate the manufacture of the two remaining validation lots per regulatory guidelines and these tests will be performed starting in the second half of 2015. We have also scaled up the size of our API lots and are in the process of scaling up our formulated batches to something larger than a 100 kilogram batch size.

Based upon the advice of our CMC team we continue to anticipate at least two years of shelf life for Locilex at room temperature as supported by the product stability data. We continue to evaluate this stability data going forward.

As previously reported, we continue to anticipate that we will have adequate stability data on three cGMP registration batches of product supply well ahead of the completion of the OneStep Phase 3 clinical trial.

In Europe we plan to file a pediatric waiver as required under EU guidelines in the second half of 2015. A pediatric waiver is requested and granted when the indication applied for in adults is not present in children, as is the case with diabetic foot ulcer and infection. Accordingly, the sponsor would not have to plan or conduct clinical trials in a pediatric population either pre-approval or post approval in the EU.

In the second half of 2015 we also plan to file with the European Medicines Agency for conditional approval of the proprietary name Locilex. As a reminder, a registered trademark for the name Locilex has already been granted by the US Patent & Trademark Office.

In addition to the microbiology data in patients with diabetic foot infection being collected as part of our OneStep Phase 3 trial, our expanded microbiology program includes five additional studies including activity of pexiganan against a broad range of contemporary microorganisms to provide supportive information for inclusion in the clinical and in vitro list for proposed US drug labeling and for the planned marketing authorization application to be filed in the EU.

Progress in these areas has been encouraging and we hope to build on this momentum through the course of 2015. I will now ask Robert Shawah, our Chief Accounting Officer, to guide you through our financial highlights for the quarter ended June 30, 2015.

Thank you, David. As mentioned earlier, our second-quarter 2015 financial results were included in our press release issued earlier this morning. The Company ended the period on June 30, 2015 with cash and short-term investments totaling $40.7 million compared to $24 million for the period ending March 31, 2015.

Cash used in operating activities for the six months ended June 30, was $6.2 million versus $5.7 million for the six months ended June 30, 2014. The increase in cash and short-term investments is primarily due to additional proceeds from the closing of our secondary public offering in June of this year.

Research and development expenses were $2.3 million for the three months ended June 30, 2015 compared to $2.6 million for the three months ended June 30, 2014. The slight decrease is primarily due to higher manufacturing-related expenses in 2014 due to the commencement of our clinical trials.

General and administrative expenses were $1.7 million for the three months ended June 30, 2015 compared to $1.3 million for the three months ended June 30, 2014. The increase was primarily due to an increase in professional and administrative costs as well as a slight increase in stock-based compensation-related expenses.

The Company reported a net loss of $4 million or $0.47 per diluted share for the three months ended June 30, 2015 compared to a net loss of $3.9 million or $0.46 per diluted share for the three months ended June 30, 2014. The Company had 10,269,507 shares outstanding as of June 30, 2015. With that I will turn the call back over to David.

Thank you, Rob, and thank you all for joining us for today's earnings conference call. I would now like to open up the call for questions. Operator?

(Operator Instructions). Ben Haynor, Feltl & Company.

Okay, just wondering how the rejuvenation meetings you guys have held so far have gone. Have you seen an uptick in enrollment in some of the early sites, I think Miami, Phoenix, I think Texas and California sites, where those were held?

Yes, we have. In fact there was also a rejuvenation meeting held in Charlotte a couple of weeks ago. We have seen a clear uptick in the past 30 days in the enrollment, particularly in Study 305 or OneStep-1 as we call it.

So, in Study 305 we are just two patients away from achieving 50% enrollment. And it being material, we would come out with a press release we anticipate when we hit 50% enrollment in the coming days or week or weeks in Study 305.

So, yes, we have seen a real nice uptick and we think we will hit 50% enrollment in one of the two studies in the coming days or one or two weeks and hopefully by the middle of next month in the second study. And keep in mind, we prognosticated last quarter that we would hit 50% in the month of August. So we are right on track.

Okay, great. I don't want to steal your thunder for ICAAC, but can you give us any additional color on the poster presentation there? Does it look at other topical antibiotics against the same microbes or is it just known in effectiveness of those topical antibiotics against those?

Yes, so the group is JMI Labs out in Iowa, run by Ron Jones. And it is a facility where the FDA has microbes stored. So it is somewhat well respected among folks in our industry sector.

What Ron and his team have done is take a list of known organisms -- microorganisms that are resistant to existing topical antibiotics, both commonly known approved antibiotics and those that are commonly known and under development, a list of seven in total. And take those microorganisms that are most resistant to these other seven topicals and run them against pexiganan to determine their sensitivity to pexi.

And the results were very impressive and showed that pexi is very good at killing bugs that are known to avoid being killed or stopping from replication by other topicals. So, it was data that was strong enough or compelling enough not just in our view but in the view of the ICAAC committee that they accepted it for poster presentation. So it is a bit of an independent validation of the data.

Excellent, I am looking forward to that. And then lastly for me, have you done any more work on an IV formulation of pexiganan and anything to report there?

Yes, we don't have anything new to report from last quarter on that. We have completed one microbiology study at the University of Wisconsin. And we didn't get through the gut wall an elevated enough concentration that we were comfortable with.

So our group is going back and making some changes to the formulation to see if they can't couple it with a vehicle, for example, that will help get it through the gut wall in a higher concentration level similar to the topical formulation.

So that process is ongoing, but we are still on target by the end of the year to have a second micro study performed with whatever new formulation or formulation plus vehicle is created by the scientific team led by Jack Dean who, as you know, is one of our Board members and ran preclinical development for Sanofi for several years.

Excellent. All right, thanks for taking my questions, gentlemen.

(Operator Instructions). Ladies and gentlemen, there are no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Well, thank you all for attending today's conference call and we look forward to updating you in the very near future on the status of enrollment in the Phase 3 study.

Thank you. Ladies and gentlemen, this does conclude our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.