Greetings, and welcome to Chemomab Therapeutics First Quarter 2023 Earnings Call and Corporate Update. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Barbara Lindheim, Consulting Vice President of Strategic Communications. Thank you. You may begin.

Welcome to the Chemomab Therapeutics 2023 first quarter conference call. Thank you for attending. I am Barbara Lindheim, Consulting Vice President of 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. Adi Mor, our Co-Founder and Chief Scientific Officer; and Dr. Matt Frankel, our Chief Medical 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 in the other reports and materials we filed with the SEC. Except as required by federal security 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 updates through the first quarter of 2023. I am pleased to report that we have continued to make good progress on multiple fronts since our last investor call. Today, we will review financial results for the first quarter. Please see the press release we issued this morning for details. We will also discuss advances we achieved during the first quarter and note several significant developments that occurred late last year. In January, we reported encouraging top line results from our CM-101 Phase 2 liver fibrosis trial in patients with NASH. In this study, CM-101 appeared safe and demonstrated improvements across multiple disease-related fibrotic and inflammatory biomarkers. We believe that the data have been well received by opinion leaders working in NASH and other fibrotic diseases as well as by pharma firms with whom we are in ongoing dialogue. Adi will discuss the liver fibrosis NASH trial results shortly. Importantly, these results are consistent with the encouraging biomarker changes that we observed in two earlier CM-101 clinical trials. These results from these clinical trials and multiple non-clinical studies showing groups of fibro-inflammatory markers moving in the same right direction along with physiological measures too increased our optimism about the potential for CM-101 as a treatment for fibro-inflammatory diseases. Although we don't have immediate plans to pursue additional studies in NASH, we believe that CM-101 may have therapeutic potential in NASH, as a solo therapy or in combination regimen. And we will continue to assess partnership opportunities in NASH and other indications. Additionally, we believe that these results support the therapeutic potential of CM-101 across multiple organs and inflammatory fibrotic diseases and are especially encouraging in support of the prospects for our two main indications of primary sclerosing cholangitis or PSC and systemic sclerosis or SSc, two rare diseases that share some of the same fibro-inflammatory features as NASH. We're making good progress in advancing our CM-101 Phase 2 clinical program in PSC. We are pleased with a good productivity we have achieved by adding clinical sites and enhancing our patient outreach activities in line with our plans to report top line data from this trial in the second half of next year. We are also pleased late last year when the independent drug monitoring committee conducted a review of CM-101 safety data and cleared us to add the planned 20 milligrams per kilogram dose arm to the PSC trial. We are now enrolling patients in this higher dose cohort. Turning to SSc. Earlier this year, we reported that our IND for our Phase 2 trial was cleared by the FDA. We've been working diligently to prepare for the start of this trial, which will be conducted at sites in the US, Europe and Israel. We are on track to open our initial US sites around midyear. We expect to report data from this trial in the latter part of 2024. We're also supporting our clinical programs with an active schedule of scientific presentations at major medical meetings in the US and Europe. And we anticipate several scientific publications in respected journals in the coming months. These activities aim to build knowledge about and interest in our unique approach to fibro-inflammatory diseases among researchers and opinion leaders. Finally, since our last investor call we've added two exceptional senior executives our Chief Medical Officer, Dr. Matt Frankel; and our Vice President of Corporate Development and Strategy, Dr. Mitch Jones. Matt brings us a wealth of global-pharma and biotech industry experience across all aspects of clinical development and medical affairs along with his outstanding track record in helping to bring numerous drugs to market in both rare and chronic diseases. Mitch who is an MD, PhD, has a rich combination of science and business skills that make him well qualified to lead the corporate development function at Chemomab. His academic background in Medicine and Biomedical Research is complemented by an extensive hands-on industry experience as a biotech entrepreneur, strategist, clinical researcher, and deal maker. Matt and Mitch have already proven to be major contributors to Chemomab and we are delighted to have them on board. Let me now turn the call over to Dr. Adi Mor our Co-Founder and CSO. Adi?

Thank you, Dale. As Dale noted, in January we reported top-line results from our Phase IIa liver fibrosis trial in NASH patients. This randomized placebo-controlled trial enrolled 23 patients and evaluated eight doses of CM-101 administered subcutaneously at a dose of five milligram per kilogram. The primary objective was to assess the safety and tolerability of our subcutaneous formulation. Secondary objectives included evaluating PK data, liver fibrosis biomarker, physiological markers, and anti-drug antibodies. We believe the results are encouraging. CM-101 appeared safe. Most adverse events were mild with one unrelated serious adverse event. We did not see any significant injection site reactions or evidence of ADA. Overall, we were very pleased to see favorable pharmacokinetic target engagement profiles that are consistent with what we've seen in earlier studies. With multiple administrations, we saw an increase over the time in the level of CM-101 until it reaches a steady state. We also saw as expected an increase in target engagement in the CM-101-treated group indicating CM-101's robust and specific engagement with its target and a strong PK target engagement relationship. In this trial, we evaluated the activity of CM-101 by measuring a variety of biomarkers that were known to be relevant to inflammation and fibrosis and are commonly used to assess the stage of liver fibrosis. Using a responder analysis, we demonstrated that a higher percentage of patients in the CM-101 treated group showed improvement in the number of important biomarkers including ELF, ProC-3, ProC-4, and TIMP-1 compared to the placebo group. In addition, we evaluated the biomarker improvement in patients who were defined as multiple responders, that is, patients who improved in at least three biomarkers. Importantly, the data showed almost 60% of the CM-101 group responded in at least three biomarkers compared to no patients in the placebo group. These findings further showed the broad effect of CM-101 on multiple biomarkers and suggest that it is inhibiting core pathological processes that lead to fibrosis. In a different set of analysis, we evaluated the association between CCL24 levels at baseline and patients' response to CM-101. We divided the patients into low and high CCL24 categories based on their serum levels at baseline and found that CM-101 treated patients with higher CCL24 levels at baseline showed greater reductions in fibrosis-related biomarkers than patients with lower levels. These results provide further evidence of the role of CCL24 in fibrotic liver disease. In addition to the biomarker analysis, we used FibroScan assessments at baseline and at week 16. The assessed liver stiffness is the geological measure that is a proxy for liver fibrosis. The data indicates that a much higher percentage of patients in the active arm showed an improvement of at least one grade in their fibrosis score. The combination of improvements across multiple circulating fibrosis related biomarkers and the positive FibroScan results is encouraging and adds to the growing evidence that CM-101 may have the potential to be safe and effective treatments for fibro-inflammatory diseases such as NASH and PSC. I will now turn the call over to Dr. Matt Frankel our Chief Medical Officer.

Thank you, Adi. It's useful to view the CM-101 Phase II liver fibrosis NASH trial results in the context of data from the three other CM-101 clinical trials that have been reported. The initial Phase Ia safety study, the Phase Ib trial in patients with nonalcoholic fatty liver disease, and the investigator-initiated study in a severe lung injury model in hospitalized COVID-19 patients. In summary, based on these four clinical trials of CM-101 completed to-date, we see that CM-101 is quite safe in more than 70 healthy subjects and patients who have received it. It reduced fibrogenesis related biomarkers in patients with fatty liver, liver fibrosis, NASH, and severe lung inflammation. It demonstrated anti-inflammatory effects in NASH and acute lung inflammation and no anti-drug antibodies have been detected. Importantly, we are seeing consistent signals across these studies. The CM-101 may have the potential to positively impact patients with a variety of fibro-inflammatory diseases. Turning now to our Phase II PSC trial. As Dale noted, we continue to actively recruit patients across clinical trial sites in the US, Europe, and Israel. Since our last call, we have opened additional trial sites and implemented a protocol amendment adding a higher dose cohort and an open-label extension. We are pleased with the progress of the PSC trial and remain on track to report top-line data from the double-blind portion in the second half of 2024. Turning to systemic sclerosis. As we have described previously, SSC is a complex immunological disorder characterized by inflammatory and fibrotic pathophysiology in multiple tissues. Despite approvals of therapies that can slow the progression of the interstitial lung disease in the SSC patients, there remains a clear unmet medical need in this disorder, which affects an estimated 180,000 patients in major markets. It has the highest mortality of all the systemic rheumatic diseases. We believe that a novel therapeutic that addresses various manifestations of the disease, including the dermatological aspects, would represent a major advance in the treatment of SSC. We're now building upon our strong preclinical data package with this initial trial, but we see to confirm the critical role of CCL24 in this disease and to establish biological and clinical proof of concept of CM-101 in patients with SSC. Notably, this is the first study where we recapture tissue samples allowing us to see the direct impact of CM-101 on patient's tissue. The study is designed to generate additional information about disease mechanisms and to enable more informed decisions about future patient stratification strategies as well as to inform the selection of endpoints for registrational studies. This randomized placebo-controlled trial will enroll 45 patients with SSC with 30 patients receiving CM-101 and 15 receiving placebo. We are targeting about half the patients with the diagnosis of limited SSc and half with diffuse SSc. To be eligible, patients must have clinically active disease either dermatologic or pulmonary or vascular along with moderate to high serum levels of circulating CCL24. The trial includes a 24-week double-blind period during which active treatment patients will receive 10 milligrams per kilogram of CM-101 every three weeks followed by a 24-week open-label extension where all patients will receive a 10 mg per kg dose. All patients will undergo a skin biopsy at baseline and again after the double-blind treatment period along with multiple clinical assessments of the skin, vasculature, and pulmonary function. The primary outcome measure is safety. Secondary endpoints include multiple serum based biological markers and a variety of exploratory biological and clinical outcomes including the ACR-CRISS and the revised CRISS. As noted, we expect to open the trial for patient enrollment soon around midyear. We currently anticipate an initial data readout from the trial in the second half of 2024. With that, I will turn the call over to Don Marvin our Chief Financial Officer, Chief Operating Officer and Executive Vice President.

Thank you, Matt. Good day. As CFO of Chemomab, I am pleased to have this opportunity to communicate directly with our shareholders and other stakeholders. Today, I will review highlights of our first quarter 2023 financial performance. Please see the press release we issued this morning for more detail. As you know, the market for biotech stocks remains very challenging. I want to note again 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 Chemomab that is to ensure we are pursuing the optimal development path for CM-101, prudently managing our finances and conserving capital to the extent feasible while advancing our clinical programs in as rigorous a fashion as possible. We believe we are doing a good job delivering on these goals. And we will strive to continue to do so going forward. In line with these principles, I am pleased to note that today we are reporting that we have extended our estimated cash runway from the prior date of March 31, 2024, the end of the first quarter until June 30, 2024, the end of the first half of the year. We have done so through a thorough review of our budgets that has enabled us to trim expenditures, while maintaining the resources needed to advance our two clinical programs towards achieving our data milestones targeted for the second half of 2024. We believe we have a number of options for addressing the funding needed to advance our trials through to the readouts projected in the second half of the year. And we will have more to say about these options in the coming months. Let me now share a summary of our financial performance for the first quarter 2023. Cash, cash equivalents and bank deposits were $32.8 million as of March 31, 2023 compared to approximately $40 million on December 31, 2022. R&D expenses were $6.9 million for the quarter ended March 31, 2023 compared to $2.7 million for the same quarter in 2022. Research and development expenses increased by approximately $4.1 million or 151% for the three months ended March 31, 2023 as compared to the same period of 2022. The increase was primarily due to increased clinical and preclinical activities. G&A expenses were $2.2 million for the quarter ended March 31, 2023, compared to $2.6 million for the same quarter in 2022. General administrative expenses decreased by approximately $0.4 million or 16% for the three months ended March 31, 2023 as compared to the same period of 2022. The decrease was primarily due to a decrease in non-cash share-based expenses and a decrease in insurance expenses. Our net loss was $8.8 million or a net loss of approximately $0.04 per basic and diluted ordinary share for the first quarter of 2023, compared to $5.1 million or a net loss of approximately $0.02 per basic and diluted ordinary share for the quarter ended March 31, 2022. The weighted average number of ordinary shares outstanding, basic and diluted, were 220,996,240 equal to approximately 11 million ADSs for the quarter ended March 31, 2023. We appreciate your continuing support and invite you to reach out if you would like to communicate with us directly. I will now turn the call back to Dale.

I hope we've conveyed some of our enthusiasm about the momentum we are building at Chemomab. Despite the challenges facing our sector, we believe that CM-101 has the potential to make a real difference in deadly diseases with few current treatment options and we are committed to fully assessing its potential. We intend to stay laser-focused on continuing our advance in the PSC trial and launching our innovative systemic sclerosis trial in the coming weeks. We also will continue to manage our resources with great prudence, make every expenditure count towards completing our current clinical programs. We appreciate your continued support and invite you to reach out with questions, comments or suggestions. Operator, we are ready to open the floor to questions.

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

Hi. Good morning, good afternoon, everybody. Thanks for taking my questions. So, given that 2023 is largely an executional year for you as these Phase two trials progress. Can you talk about your plans this year to speak at different medical conferences and any new data findings from previous studies that you would look to present?

Hi, Kristen. This is Dale. That's a great question. And we actually have quite a bit of activity there. Maybe Adi, could kick off and then Matt.

Yeah, absolutely. Hi, Kristen. So, we definitely have a lot of activities over the next couple of months. On that front, we are planning to present both in the EASL Biliary Conference, as well as in the EASL larger conference in Wien, in June. We will be presenting data that are based on some clinical samples, patient samples and the preclinical research and present hopefully our NASH study data that are still under review for late breaking. In addition to that, later in the year we are planning also to submit some exciting new data to the later conferences in the US as well. Inhibition on systemic sclerosis is strong. So, once again, data will be available in the upcoming EULAR conference and hopefully also later in the year in the ACR. Matt, any addition to that?

No, we are definitely focused on ensuring that we're communicating and providing any updates that we have to ensure that the community is aware of all of our great scientific progress.

Okay. Thanks. I appreciate that. And I know you've made it clear that you as a company want to look to move any studies forward in NASH has given me time and expenses associated with it. But you did mention in your prepared remarks that you've been talking to different partners. So I'm curious if that indication or specifically any other liver fibrotic diseases are being discussed in those conversations, or is it really just focusing on your two lead asset indications at this stage?

We are indeed exploring dialogues with a variety of companies and those did include NASH. NASH is a fascinating fibro-inflammatory disease. We've received some very encouraging data in NASH. And so it makes sense for key opinion leaders and folks that are in that indication to be interested in our data and our emerging data analysis from our prior trial. So, although we don't plan on pursuing trials ourselves, it does seem like a very appropriate indication for CM-101 to be active. And we are laser focused on primary sclerosing cholangitis and systemic sclerosis. It's our to go forward trials. But I think the unique aspect and insight that we have to fibro-inflammatory diseases is now being recognized by a larger group of key opinion leaders and people in this set of diseases. So, although, we've considered them individual diseases over history, increasingly as additional data come out from other trials in fibro-inflammatory spaces, we've seen a consistent pattern and we've a lot of supporting data to support CCL24. It's a very important target in a variety of these diseases. So we're focused and at the same time we recognize that there's a variety of players out there that are interested in our assets.

Great. Thanks for taking my questions.

Our next question comes from Jeff Jones with Oppenheimer. Please proceed with your question.

Good morning, guys or afternoon for Adi and the team in Israel. Question on the SSc trial. Why did you decide to go with the lower of the two doses you're studying, the 10 mg per kg? And then why enroll both diffuse and limited patients as the question being around the variability in those patients in a relatively small study and so then how you interpret the results? Thanks.

Matt?

Yes. So let me touch the first, which is why the 10 mg per kg. And the reason there is that when we worked with the FDA, we really felt that that's an opportunity to see the tissue effect and that's a viable way forward to do that demonstration in the Phase 2a program. If we were going to do multiple doses, there was a thought process that it would be a much broader study and a much larger study with a number of blinded sites. So we felt that that population with 45 would really give us the indication that we really had tissue engagement as appropriate. The second question was as far as why include both limited and diffused? And that comes down to a number of factors. Number one is that the patient populations really do differ. You see the progression of the diseases very dramatically. So we felt that it was very important. Both patient populations suffered dramatically from the disease. And it's an opportunity to explore the impact of CM-101 in both patient populations. The second is a practical if you will. There are a number of molecules that are just pursuing the diffused. And we feel it's an opportunity to ensure that we have the opportunity to expand that and focus on those patients who are being neglected as well.

Great. Thanks guys.

Thank you.

We have reached the end of our question-and-answer session. And I would now like to turn the call back over to Dale for closing comments.

Well, thank you for your questions and continued support. We believe we have made great progress towards demonstrating CM-101 in our clinical programs. And we look forward to giving you additional updates later in the year. Thank you.

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