Salarius Pharmaceuticals Inc (SLRX) 2017 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Flex Pharma Q1 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this call will be recorded.

I would now like to introduce your host for today's conference, Ms. Elizabeth Woo, Senior Vice President, Investor Relations and Corporate Communications. You may begin.

Thank you, Catherine. Good morning. Thank you for joining us today to discuss Flex Pharma's first quarter financial results, as well as the recent progress and outlook.

Earlier today, we issued a press release announcing recent business highlights and detailing our first quarter 2017 results. You can find these documents on our website at flex-pharma.com.

Today, we will be making certain forward-looking statements about future expectations, plans, events and circumstances including statements of other strategy, future operations, development of our consumer and drug product candidates, plans for future potential product candidates, and studies and our expectations regarding our capital allocation and cash resources.

These statements are based on our current expectations and you should not place undue reliance on these statements.

Actual results may differ materially due to our risks and uncertainties including those detailed in the risk factor section of our 10-K file with the SEC and other filings we've made with the SEC from time to time. Flex Pharma disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise.

We'll provide a brief overview today and then open it up for Q&A. And joining us on the call today is Dr. Cristoph Westphal, our CEO; Dr. Tom Wessel, Chief Medical Officer of Flex Pharma; Dr. Bill McVicar, President of R&D; Kathie Lindemann, Chief Operating Officer; and John McCabe, Chief Financial Officer will join for the question and answer session.

I'll now pass the call to Flex Pharma CEO, Cristoph Westphal.

Thanks, Elizabeth. Thanks for joining us this morning.

Our efforts are increasingly focused on creating value by accelerating the development of FLX-787 to address the significant unmet medical need of patients suffering from debilitating cramps and spasms as a consequence of severe neurological diseases.

As a team, we are excited that the FDA has cleared FLX-787 to go straight into a Phase 2 trial in ALS. Under this open IND, we expect to initiate two Phase 2 clinical trials in ALS and in Charcot-Marie-Tooth this summer in the U.S. Together with our exploratory Phase 2 studies currently underway in Australia, FLX-787 will be amongst the most advanced novel compound in the clinics for ALS and CMT.

Human efficacy data from our study in nocturnal leg cramps was resented at AAM last week here in Boston when a neurologist evaluated in blinded manner, subjects likely to have NLC based upon a questionnaire administered after the study was completed in the fall.

The data from first treatment exposure of these 26 subjects showed a statistically significant effect in the reduction in camp frequency and pain when compared to placebo. We were also pleased to see data presented at AAN that genetically links TRPA1, the pharmacological target of FLX-787 to human muscle cramp fasciculation syndrome. This study was conducted by independent researchers at NYU and Mount Sinai.

In early April, Bill McVicar joined Flex as President of R&D. Bill has an impressive track record of multiple drug approvals based upon his operational excellence and execution. Bill was recruited by our Chief Medical Officer, Dr. Tom Wessel who worked with Bill at Sepracor. With their successful time together at Sepracor, Bill and Tom are a great team to rapidly advance FLX-787 in MS, ALS and Charcot-Marie-Tooth.

We have multiple shots on goal that would read out by 2018 while our cash carry ourselves to early 2019.

Tom and Bill will now give an update on R&D efforts followed by Kathie Lindemann who will provide a brief update on HOTSHOT.

Thank you, Cristoph. Following up on Cristoph's comments, I'm delighted that Bill has joined us at Flex as we plan to initiate our Phase 2 trials in ALS and Charcot-Marie-Tooth or CMT in the United States this summer.

Bill and I know each other well and experienced many clinical research and regulatory successes as Sepracor. His operational savvy, strategic thinking and energy are major assets to guide us through the development of FLX-787.

As previously discussed, FLX-787, our small molecule co-activator of TRPA1 and TRPV1 ion channels has been shown to prevent and reduce the frequency and intensity of muscle cramps and help the subjects in our human model of electrically induced cramps.

We believe our approach with FLX-787 may benefit many patients afflicted with various underlying neurological diseases involving hyperexcitable alpha motor neurons. These hyperexcitability is thought to be central to the generation of fasciculations, cramps, spasms, and spasticity apparent in many neurological diseases.

As Cristoph noted, we have gained important insights from our exploratory study in nocturnal leg cramps, which we just presented at the American Academy of Neurology Conference last week. In addition to several randomized controlled human efficacy studies previously reported at scientific meetings, we now have a better understanding of how NLC patients benefit from TRP channel activation.

We are thrilled that the FDA has allowed us to go direction into ALS patients in our Phase 2 study. And I think this speaks to the safety profile of FLX-787 seen to date. The open IND allows us to initiate our Phase 2 multi-centered trial and represents an important milestone for Flex Pharma.

We are also in the process of evaluating other orphan indications in the neurology space where cramps, spasms and spasticity impact the patients every day.

We plan to begin enrolling ALS patients this summer in this randomized controlled, double blinded, parallel designed study in the United States which we refer to as the COMMEND Trial. This Phase 2 clinical trial is designed to evaluation 787 in patients with motor neuron disease focused on ALS, who suffer from cramps and will include a running period to establish a baseline in cramp frequency.

Patients will then be randomized to 30 milligrams of FLX-787 administered three times a day for control for 28 days. Patients will be evaluated for changes in cramp frequency as the primary endpoint, along with a number of secondary endpoints. The planned clinical study in CMT patients will have a similar design without spasticity endpoint.

Our lead investigator for our ALS study in the U.S. is Dr. Bjorn Oskarsson of the Mayo Clinic in Jacksonville, Florida. He recently authored a paper describing the severe impact muscle cramps can have on functional performance and quality of life for patients with motor neuron diseases like ALS.

As Dr. Oskarsson stressed, neurologists are often confronted with the situation where the patient experiences worsening symptoms and current treatments are either infective or have limiting side effects. FLX-787 may provide a better approach to this challenging problem.

[Dr. Nix Johnson], a neuromuscular expert at the University of Utah will serve as our lead investigator for our CMT trial, and also presented at the AAN meeting. We are excited to work with Dr. Johnson and his colleagues at the Inherited Neuropathies Consortium who have reviewed and endorsed our CMT protocol and they will help us reach out the CMT patients who are suffering from cramps to enroll in this study.

As a team, we are working diligently to advance 787 into Phase 2 clinical trial for ALS and CMT patients this summer.

I'll now hand the call to Dr. Bill McVicar to comment on our clinical operations efforts.

Thank you, Tom. It's my great pleasure to be joining the team at Flex that's applying the scientific advances of a Nobel Laureate to improving the lives of patients living with debilitating neurological diseases.

In partnership with our Chief Medical Officer, Tom Wessel, my former Sepracor colleague, we are poised to execute on our U.S. Phase 2 development plans.

Very shortly, we plan to submit a second protocol to the IND for our clinical trial of FLX-787 to treat patients with CMT. This would enable us to begin another Phase 2 trial this summer, making FLX-787 one of the most advanced novel compounds in development for CMT.

The Australian sites currently in our exploratory ALS study are already familiar with FLX-787 and are understandably excited about the U.S. Phase 2 trial under the IND. As a result, we're considering including these Australian sites in the parallel designed IND study which should supplement patient enrollment and get us to a robust ALS dataset sooner.

The R&D team is focused on the execution of these new Phase 2 IND studies, as well as completion of the ongoing exploratory Phase 2 work in Australia which together are expected to result in several data readouts in 2018.

I attended several session at the AAN and was quite intrigued by recent data from the independent researches at NYU and Mount Sinai that implicate TRPA1 ion channelopathy in cramp fasciculation syndrome.

This is interesting to us because our data in a human electrically induced cramp model indicates that co-activation of both TRPA1 and TRPV1 is required to decreased hyperexcitability, and this is led to the selection of FLX-787 for development.

FLX activates both receptors. Their work appears to be consistent and showed that a mutation suppressing signaling from just one of these two ion channels, TRPA1, perhaps attenuating co-signaling is associated with hyperexcitability underlying cramp fasciculation syndrome.

I'll now hand the call to Kathie Lindemann, our COO for a few comments on the consumer business.

Thanks, Bill. Good morning everyone. HOTSHOT has built the base of loyal customers in the first nine months on the market. The usage has been growing amongst endurance athletes and hundreds of professional and collegiate teams who rely on HOTSHOT to treat and prevent exercise-associated muscle cramps in addition to other neuromuscular performance benefits related to recovery and muscle soreness.

We're learning a great deal about the dynamics of this nascent market including the expected impact of seasonality reflected in our first quarter revenues of $243,000.

Our activation at the Boston Marathon in April was successful. Over 2,500 expo attendees sampled HOTSHOT. And on race day, over 800 runners sought out bottles of HOTSHOT at Mile 20 on the course, the beginning of Heartbreak Hill.

To grow the business, our objectives for 2017 are to continue to focus on the endurance athlete market, continue to drive trial and increase brand awareness, build our base and leverage our learning, expand into five additional geographies with specialty retailers and events, add new collegiate and professional teams to our growing list of regular customers, and to study additional neuromuscular co-benefits such as recovery and muscle soreness.

As we move in to the warmer months and the busy racing season ahead, we're already seeing an expected increase in HOTSHOT usage and we are making investments appropriate to recognize HOTSHOT's medium and longer term value.

I'll now turn the call back to Elizabeth.

Thanks, Kathie. Joining us for the Q&A portion of the call is our Chief Financial Officer, John McCabe. And I'll now ask the operator to open the queue for questions.

(Operator Instructions) And our first question is from Mara Goldstein with Cantor Fitzgerald. Your line is open.

Thank you for taking the question. I had a question on CMT and I'm wondering if you could just characterize for a moment how patients from an interventional perspective are treated, and so how 787 might fit in to their current course of treatments and any other sort of pharmaceutical interventions they may be taking?

Yes, in terms of the pharmacological therapies that are used in CMT, it varies very broadly. And obviously any compounds like gabapentin and so forth are utilized because they're relatively easy to administer and have few side effects and drug interactions. But it really expands to the whole gamut of various compounds that are used for cramping and spasticity.

This is an area that is much under researched and therefore we were really received with open arms by the Inherited Neuropathies Consortium because there is a lack of controlled studies in this field.

Could you envision that in order to test the drug, patients will have to come into the study and exit the existing medications that they're taking?

No. The idea is always in the studies that you don't want to remove treatments that patients might be benefiting from. However, they would have to have a certain threshold of cramp frequency to be able to enroll in the study. Obviously, we want to keep the experimental conditions as constant as possible. So therefore, they would continue on drugs like gabapentin or baclofen at the doses that they are currently receiving. And we would in those cases actually be an add-on therapy.

Of course, we anticipate that in our studies, we would have the mix of de novo patients that are actually not being treated with any pharmacological agent and those patients where we would basically be an add-on therapy.

The goal of course is to reduce cramps, spasms and spasticity in MS and ALS patients. In CMT patients, they really primarily suffer from cramps and hand tremor.

Okay. And if I could just ask on the formulation. The formulation that you'll be using, is that -- how far from sort of commercial-ready are you with that formulation?

This is Bill McVicar. That's a basic -- the basic composition of that formulation is pretty fixed. It will allow us to deliver the drug into the mouth with a very fast dissolution on the tongue, and that allow us -- the drug to be exposed to all of the receptors in the tongue, the soft palate and the epiglottis.

We don't expect a big change, maybe a tweak or two. But we believe that the data from this tongue disintegrating tablet will be highly relevant to predicting the behavior of the ultimate commercial product.

Thank you. And I'm showing no further questions at this time. I'd like to turn the call over to CEO, Cristoph Westphal, for any closing remarks.

Thanks to all of you for supporting our mission of developing treatments for debilitating muscle cramps and spasms. It is an honor to be providing hope and the potential to help patients with ALS, MS and Charcot-Marie-Tooth built on our strong foundation of excellent people and great science. Thanks so much for joining us this morning. Goodbye.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.