Greetings and welcome to the Chemomab First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host Barbara Lindheim, Consulting Vice President, Strategic Communications for Chemomab. Thank you, you may begin.

Welcome to the Chemomab Therapeutics 2022 first-quarter conference call. Thank you for attending. I'm Barbara Lindheim, Consulting Vice President and Strategic Communications at Chemomab. With me today are Dale Pfost, our Chairman and CEO; Don Marvin, CFO, Chief Operating Officer, and Executive Vice President; Dr. David Weiner, interim CMO; and Dr. Adi Mor, our Co-Founder and Chief Scientific Officer. Before turning the call over to Dale, please take note of our forward-looking statements. Today's call may contain forward-looking statements, which may be identified by words such as may, could, will, expect, intend, plan, and other similar words and expressions. All forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our earnings press release that we issued this morning, together with our SEC filings for a more complete discussion of factors that could cause our actual results to differ materially from those expressed or implied in forward-looking statements. You can read a comprehensive list of those factors under the heading Risk Factors contained in our Annual Report on Form 10-K, together with factors under similar headings and in other reports and materials we filed with the SEC. Except as required by Federal Securities Laws, Chemomab does not undertake to publicly update or revise any forward-looking statements subsequent to the date made as a result of new information, future events, changing circumstances, or for any other reason. Let me now turn the call over to Dale.

Welcome to the Chemomab conference call covering the first quarter of 2022. It's just been two months since our last conference call and I'm pleased to report that we have been making good progress in refining and implementing the revisions to the CM-101 clinical program that we outlined in March. CM-101 is a first-in-class monoclonal antibody that neutralizes CCL24, a soluble protein implicated in both fibrosis and inflammation. We are currently developing CM-101 for the rare disease indications of primary sclerosing cholangitis, or PSC, and systemic sclerosis, or SSC, as well as evaluating other potential clinical indications where its multiple mechanisms of action at the confluence of fibrosis and inflammation could be valuable. Our interim CMO, David Weiner, will have more to say on our clinical progress shortly. There are several areas of notable developments in the first quarter. We named Jack Lawler, Vice President of Global Clinical Development Operations. Jack, who is based in the US, is a tremendous addition to our clinical team, bringing us more than 20 years of diverse clinical drug development experience. Jack's deep knowledge of clinical trial operations is already proving invaluable, working with both our existing clinical trial staff in Israel and with additional essential team members he is bringing on including in the United States. Jack will be playing a pivotal role in advancing our clinical development objectives and we are delighted to have someone with his expertise and hands-on knowledge in this important position. During the quarter, we presented data at two scientific meetings. At the International Rheumatology Conference in Israel, our CSO, Dr. Adi Mor presented preclinical data on CM-101 as a possible treatment for systemic sclerosis with the potential to impact inflammation, fibrosis, and endothelial damage. Data from patient samples demonstrated that the soluble protein, CCL24, the target of CM-101, is highly expressed in samples from systemic sclerosis patients compared to healthy individuals. CCL24 levels also correlated with fibrotic markers and disease progression, and in a well-established experimental systemic sclerosis model, CM-101 profoundly reduced skin and lung fibrosis. Our scientific collaborator Professor, Francesco Del Galdo, a respected scleroderma key opinion leader at the University of Leeds presented CM-101 data at the 7th Annual Systemic Sclerosis World Congress. The data supports the role of CCL24 as a novel biological target for systemic sclerosis, demonstrating that systemic sclerosis patients have elevated serum levels of CCL24. Furthermore, high CCL24 serum levels were correlated with disease activity and the worst prognosis in these patients, as reflected by high fibrotic activity and deterioration of lung function over time. This provides additional evidence that CM-101 is addressing an important biological target in systemic sclerosis. These data contribute to our optimism that CM-101 could be a valuable new therapy for the treatment of systemic sclerosis, a progressive and lethal disease that currently lacks effective therapies. During the quarter, we also participated in the Annual Oppenheimer Healthcare Conference and the Cantor Fitzgerald Rare Orphan Disease Summit. Now let me turn it over to Dr. David Weiner, who is leading our clinical team as we focus on advancing our clinical development program for CM-101. Recall, that our aims in the program are to optimize the overall clinical development plan for CM-101 by first, decreasing overall development risk, and second, maximizing the clinical data obtained to facilitate clinical decision-making and support advancement to registration trials.

Good morning. Let me start by taking a moment to recall the three key elements of our CM-101 clinical development program: One, expanding our effort in PSC with an enlarged clinical trial that adds an important dose-finding component; Two, establishing biological and clinical proof of concept for CM-101 in systemic sclerosis; And three, completing enrollment in our safety PK and biomarker liver fibrosis study in NASH patients with final readouts expected near the end of this year. Let me begin with the liver fibrosis trial. I'm pleased to report that patient enrollment in this study is now complete and we are on target for a final data readout in the fourth quarter. The data readout in this study will include safety and tolerability data to support future development and deeper insight into CM-101's mechanism of action, providing additional data on the anti-inflammatory and anti-fibrotic activity of CM-101 in liver disease. Additionally, a key objective of this study was to explore the safety and drug exposure achieved with our subcutaneous formulation and we believe the early completion of this study should be sufficient to achieve this purpose, providing us the pharmacokinetics and tolerability data needed to assess our next step in the development of the current subcutaneous formulation of CM-101. Turning to PSC, the trial is currently recruiting and dosing patients, and we are expanding the number of clinical trial sites. We have ongoing recruitment of patients in Israel, the UK, and at new clinical sites in Germany. New clinical sites in the US and Spain are expected to start patient enrollment shortly and we anticipate that these additional sites will be open and actively enrolling patients before the end of the second quarter. Regarding the revised study design in PSC, we will be adding additional dose-finding cohorts to the study to ensure that we have the data needed to select the optimal dose for later stage trials. We expect to begin enrolling patients in the lower dose cohort later this year and anticipate being able to open a higher dose cohort to patient enrollment in early 2023. Finally, we are also adding an open label extension to the trial to evaluate the safety, tolerability, and durability of effect of CM-101 over longer treatment durations. As we also noted, we will be performing an interim analysis of the currently enrolling dose cohort in the PSC study with an expected readout in the second half of this year. The purpose of this interim analysis will be first, to evaluate the safety of the Q3 weekly administration of 10 milligrams per kilogram of CM-101 to support advancement to the planned higher dose of 20 milligrams per kilogram. And second, to assess the observed variability in serum biomarkers and clinical biochemistry in order to confirm the planned sample sizes for the CM-101 dose cohorts. Turning to our Phase 2 systemic sclerosis trial. As we discussed on our call in March, we are focusing the goals for this trial towards establishing biological and clinical proof of concept in this complex disease. Our Phase 2 trial leverages the broad range of organs and tissues involved in systemic sclerosis pathophysiology, to provide additional details on the therapeutic activity of CM-101. We expect the revised trial design to enable an expedited path to proof of concept data in systemic sclerosis and importantly to provide additional information on CM-101's activity in modifying the skin, lung, and vascular pathophysiology seen in systemic sclerosis patients. This study is being designed to enable us to make more informed decisions about specific patient stratification strategies, as well as to optimize the selection of endpoints for our subsequent trials in systemic sclerosis. We are currently actively engaged in designing this trial with the assistance of key opinion leaders in the field and are on track to launch the trial by the end of this year. We will be providing further details on the PSC and systemic sclerosis study design this summer. In summary, I'm pleased to report that we're making good progress towards obtaining data on dose-response relationships to inform the broader CM-101 development program, proof of concept data on clinically relevant aspects of systemic sclerosis, a complex disorder with inflammatory vascular and fibrotic components, relevant safety and tolerability data to support the evaluation of higher doses of CM-101, as well as to inform the next steps in the development of a subcutaneous formulation. With that, I will turn the call over to Don Marvin, our Chief Financial Officer, Chief Operating Officer, and Executive Vice President.

Good day. As CFO of Chemomab, I'm pleased to have this opportunity to communicate directly with our shareholders and other stakeholders. Today, I will review highlights of our first quarter 2022 financial performance. Please see the press release we issued this morning for more detail. The market for biotech stocks remains very challenging. I want to reiterate that, while we cannot change the markets, we can ensure that we are not distracted from focusing on what we need to do to build a successful company, and for Chemomab, that is to ensure that we are pursuing the optimal development path for CM-101, prudently managing our finances, conserving capital to the extent feasible, while advancing our clinical programs in as optimal a fashion as possible, and monitoring our ecosystem for potential opportunities to bring additional attractive assets in-house and for tracking competitive challenges. We believe we are doing a good job delivering on these and we will strive to do so going forward. Let me now share a summary of our financial performance in the first quarter of 2022. Cash, cash equivalents, and bank deposits were $57.5 million as of March 31, 2022, compared to $61.2 million at December 31, 2021. R&D expenses were $2.7 million for the quarter ended March 31, 2022, compared to $1.2 million for the same quarter in 2021. The increase in R&D expense year-over-year partly reflects the ramp-up in activities supporting our clinical programs for CM-101. G&A expenses were $2.6 million for the quarter ended March 31, 2022, compared to $0.5 million for the same quarter in 2021. Please note that the 2022 figure includes a $900,000 noncash stock-based compensation payment. The increase in cash G&A in the first quarter partly reflects additions to the senior management team as well as upgrades to our Tel Aviv facilities. Net loss was $5.1 million or a net loss of $0.02 per basic and diluted share for the first quarter of 2022 compared to $1.7 million or a net loss of $0.01 per basic and diluted share for the quarter ended March 31, 2021. The weighted average number of ordinary shares outstanding, basic and diluted, were 228,090,300, which equals 11,404,515 ADSs and 156,751,771, which equals 7,837,589 ADSs for the quarters ended March 31, 2022, and March 31, 2021, respectively. We continue to prudently manage our cash and currently expect our runway to last through the end of 2023 as we indicated in our last call, which is six months longer than our previous guidance last year. Last month, we renewed our existing ATM facility with a current cap of about $18 million, a reduction from the $75 million cap in our original ATM facility. We consider this renewal to be a matter of prudent financial housekeeping and do not plan to draw on the facility at this time. We appreciate your continued support. And I invite you to reach out if you would like to communicate with us directly. I will now turn the call back to Dale.

We remain excited about the progress we've outlined today. I believe our team is doing an outstanding job of developing and implementing practical and achievable plans to strengthen our clinical programs and our company. We see CM-101 as a true pipeline and a product with its ability to act at the confluence of inflammation and fibrosis that is implicated in a variety of indications with high unmet need and strong commercial potential. We believe we are on the prudent and right path to building value in Chemomab. We look forward to sharing more details with you in the next few months and appreciate your continued support. Operator, we're ready now to open the floor to questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi, good morning and good afternoon, everybody. Thanks for taking my questions. The first one I had was more of a big picture question for some of your program given that these have traditionally been tougher hurdles for other companies in the past with their drugs. So to what degree in these indications do you believe that inflammation and fibrosis play a role together versus some of the failed approaches we've seen that really the mechanism is only able to impact just one component and not the other? And then do you think that some of your early guided readouts are going to help provide more context around this point and thesis.

Thank you, Kristen. I think Adi Mor will be able to answer that question.

Yeah. Hi, Kristen, and thank you for the question. So, yes, you're right. Primary sclerosing cholangitis and systemic sclerosis are complex diseases involving inflammation and fibrosis, and even other processes that are involved. We believe based on the robust clinical data that we have obtained over the years that CM-101 enables us to interfere with fibrosis by inhibiting fibrosis activation with inflammation by inhibiting Type 2 immunity that is essential to support fibrosis, but also interfering with added pathologies that are very relevant for those diseases, like cholangitis proliferation for primary sclerosing cholangitis or the vascular angle in systemic sclerosis. So all of those combined differentiate CM-101 from other drivers that were tested in either of those indications and definitely pave the way for CM-101 to be efficient in those indications. As for your second question, this is exactly why we're going to conduct these trials for systemic sclerosis, for example, the essence of this clinical trial will be to gain some initial proof of concept on the mechanism of CM-101 in systemic sclerosis to allow us to design the registrational study in a way that will significantly increase the chances for success with regards to CM-101.

Okay. I appreciate that. Thanks. And then can you help us frame some of the expectations for PSC and this readout? I know it's largely to assess the safety, but do you expect signals from these biomarkers that you're looking at to be able to speak to or point to the potential clinical efficacy at this dose and the follow-up period? And what exactly are you going to be looking for to help you really understand the different sample sizes for the other dose cohorts, both the lower and the higher.

Okay. I think Dave Weiner, our Interim Chief Medical Officer will be able to answer that.

Yes, happy to do so. The purpose of the interim primarily is for us to gather the safety data that we've accrued on the 10 milligram per kilogram cohort. In addition to safety data that is being derived from our liver fibrosis trial, that data will support advancement to the higher dose groups of 20 mgs per kg. So the primary purpose for the interim is to enable that dosing paradigm and cohort going forward. As you noted, the second purpose there will be to look at the baseline variability on some of the key measures in the trial, including serum alkaline phosphatase and some other related biomarkers to understand whether the group sizes that we are planning will be sufficient for us to detect a signal as the trial progresses and completes. We will not be looking at measures of change from baseline in those markers, so at this interim analysis, we will not be reading out any efficacy readouts from the limited number of patients that have been accrued to date in the 10 milligram per kilogram cohort. But we will be doing so in the near term as the trial progresses.

Okay, thank you, and then last question from me just on SSc. Could you further elaborate on some of the other endpoints criteria you're considering and speaking to you about KOLs at this time? I know part of this is really just to kind of look at more of the holistic features of the disease.

I think Dave, you want to take that one.

Yep, happy to do that. We're in the midst of that process now, we're refining the final outcomes that we intend to apply in the trial and that design, as we noted before, with some of the key experts in the field. We're going to provide significant detail on that on our next call in August.

Great, thank you so much, everybody.

Thank you.

Thank you. Our next question comes from the line of Jeff Jones with Oppenheimer. Please proceed with your question.

Good morning or afternoon, everyone. Thank you for taking my question. I have a couple of inquiries. Regarding the PSC trial, how many patients do you anticipate will be included in the safety readout? Additionally, how long will those patients have been receiving treatment by the time you obtain that readout?

Dave, would you like to take that?

Yep. We don't know yet, because we have not created the date at which the data cut-off for that readout will be done. That will be determined in Q3 of this year to support the readout by the end of the year. So we'll actually have a better idea as we get closer to that date to the exact number that will have been recruited into that cohort at that time.

All right. In terms of timing of the updates around PSC planning and SSc, you've mentioned sort of summer and August. So what is the plan around that? And what format do you anticipate that taking?

Dave, you want to take that again.

Yeah. Indeed, at our next quarterly call in August we will relate significant details on the final amendment and revisions to the PSC trial and the core design for the SSc trial.

Great. Okay. And then last question. I know that you guys are going to be doing some BD work at the Bio Conference coming up. What's the focus of your BD activities?

Okay. I think Don Marvin will take that question.

Yes, Jeff. It'll be a partnering, obviously, we'll be talking to a number of potential interested parties in CM-101. We'll also be talking to other potential partners on assets that we have interest in. I think as I mentioned earlier, we have a number of lines in the water and are looking at possibilities for licensing or acquiring other assets to expand our pipeline. We'll be following up on those calls in those early discussions in San Diego in June.

Great, thank you. No more questions from me.

Thank you.

Thank you. Our next question comes from the line of Nathan Weinstein with Aegis Capital. Please proceed with your question.

Hey, good morning. Dale and the Chemomab team. So, thanks for taking my questions. I guess just to start with on the subcutaneous potential dosing route, can you opine on the importance of that route, the dosing convenience, just in light of the fact that there is really nothing out there for these patients in PSC and SSc?

Dave, would you like to take that?

Thank you for the question, Nathan. You are correct that if CM-101 significantly impacts either of those disease states, the intravenous administration will not hinder patient access and treatment due to the absence of truly effective treatments for both illnesses. Over time, the development of the subcutaneous formulation will enhance patient convenience for these indications. Additionally, it's critical for us to continue developing a viable subcutaneous formulation to support any indication we may pursue, even if we expand beyond PSC or SSc.

Okay, fair enough. Thank you. And maybe just one follow-up from me. On total operating expenses, it looks like it's been very well managed. You guys have discussed the extended cash runway versus prior guidance taking you, I think you said, to the end of 2023. Maybe just a housekeeping question in terms of some detail on how those line items could trend this year or should we expect some sequential growth in operating expenses throughout the year?

Okay, Don Marvin will take that.

Yeah. Operating expenses are going to begin trending up over the balance of the year as we expand our PSC trial in the US and certainly in Spain, as we indicated earlier, and we began to kick off the SSc trial in the fourth quarter of this year. So you'll see those operating expenses begin to trend up with the balance of the year.

Okay. That makes sense. So thanks again for taking my questions. We're definitely excited to see how the rest of the year pans out for you guys.

Thank you.

Thank you, ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Pfost for any final comments.

Thank you. This concludes our update on Chemomab for Q1 2022, and we look forward to updating you at our next call. Thank you.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.