BiomX Inc. Q3 FY2022 Earnings Call

Good morning, and welcome to the BiomX Third Quarter 2022 Financial Results and Corporate Update Conference Call. I would now like to turn the call over to Marina Wolfson, Chief Financial Officer of BiomX. Please proceed.

Thank you, and welcome to the BiomX Third Quarter 2022 Financial Results and Corporate Update Conference Call. The news release became available just after 6:30 a.m. Eastern Time today and can be found on our website at biomx.com. A replay of this call will be available in the Investors section of our website. Before we begin, I'd like to review the safe harbor provision. All statements on this call that are not factual historic statements may be deemed forward-looking statements. For instance, we're using forward-looking statements when we discuss on the conference call potential market opportunities, design, aim, expected timing, and interim and final results of our preclinical and clinical trials, the sufficiency of our existing cash, cash equivalents and short-term deposits, the potential receipt of additional funds if milestones are met, the potential benefits of our product candidates and potential growth in shareholder value. In addition, past preclinical and clinical results as well as compassionate use are not indicative and do not guarantee future success of our clinical trials. Except as required by law, we do not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements, are outlined in today's press release which, as noted earlier, is on our website. Joining me on the call this morning is Jonathan Solomon, Chief Executive Officer of BiomX. With that, I will turn the call over to Jonathan.

Thank you, Marina, and good morning, everyone. I intend to keep my remarks brief this morning as, during the third quarter, we remained largely focused on our ongoing Phase Ib/IIa trial of BX004 in cystic fibrosis. I'll now provide an update on the program. As announced in our press release this morning, we made important progress with respect to enrollment during the quarter. Given the challenge of enrolling CF patients in the wake of the COVID-19 pandemic, we put in place important mechanisms to improve enrollment, and these measures have produced a recent uptick in considerable acceleration of BX004 enrollment trends that will impact both parts of the trial. Based on our latest estimates, we now believe that enrollment in Part 1 of the study will be completed by year-end. Taking into consideration some of the modest impact from the U.S. holiday season and the extensive data analysis that follows each patient's dosing schedule, we now expect to report results from Part 1 of the trial in the first quarter of 2023, followed by results from Part 2 in the third quarter of 2023. As a reminder, we are developing BX004 as a treatment for CF patients with chronic respiratory infection caused by Pseudomonas aeruginosa, or PSA, a main contributor to morbidity and mortality in patients with CF. Part 1 of the trial will evaluate the safety, pharmacokinetics and microbiological clinical activity of BX004 in 8 patients in a single ascending dose and multiple dose design. Part 2 of the trial will evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2:1 ratio. Last quarter, we highlighted some of the positive outcomes from investigator-sponsored clinical trials that are utilizing stage-based treatment modalities to address difficult-to-treat infections in CF. We are pleased to see a growing data-driven support for the potential benefits of applying phage-directed therapies to address these persistent and life-threatening lung infections in CF patients, and we look forward to reporting data from the BX004 program in 2023. I'd now like to turn the call over to Marina Wilson, our Chief Financial Officer, to cover our financial results for the third quarter.

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q, which will be filed later today. I will walk you through some of our brief highlights. As of September 30, 2022, cash balance and short-term deposits were $41.5 million compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities. Research and development expenses net were $3.5 million for the 3 months ended September 30, 2022, compared to $6.6 million for the same period in 2021. This primarily reflected a decrease in salaries and related expenses and stock-based compensation expenses, driven by a reduction in personnel as part of a corporate restructuring we announced in May of this year, as well as pausing the development of BX003, the product candidate for the treatment of inflammatory bowel disease in primary sclerosing cholangitis, pausing the development of our colorectal cancer product candidate and the discontinuation of the product candidate for the treatment of acne, BX001. This was partially offset by a decrease in grants from the Israel Innovation Authority. General and administrative expenses were $2.6 million for the 3 months ended December 30, 2022, compared to $2.8 million for the same period in 2021. This primarily reflected a decrease in salaries and related expenses and stock-based compensation expenses related to a reduction in personnel as part of the corporate restructuring. Net loss was $6.8 million for the third quarter of 2022, compared to $10 million for the same period in 2021. Net cash used in operating activities was $21.9 million for the 9 months ended September 30, 2022, compared to $18.5 million for the same period in 2021. We estimate that existing cash, cash equivalents and short-term deposits are sufficient to fund the company's current operating plan at least through mid-2024. And now I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

Thank you, Marina. BiomX is poised to enter 2023 on solid footing with a strong balance sheet and a focused strategy of advancing BX004 program. On a personal note, I'd like to close by saying that as the BX004 program has expanded in these last several months, many of us at BiomX have had the opportunity and privilege to meet with physicians, advocacy groups, and of course, CF patients themselves, which truly drives home the importance of our ongoing research and development efforts. While great strides continue to be made in extending survival, we know that much more work needs to be done so that people living with CF can live longer and healthier lives. At BiomX, our singular focus with the BX004 program is to develop a truly groundbreaking therapy that can achieve this goal. With that, Marina and I would now be happy to take your questions. Operator?

Our first question comes from Joe Pantginis with H.C. Wainwright.

Thanks for the quick update. I want to focus on the CF program for a moment. First, could you define the enrollment-enhancing mechanisms that you've been discussing? Secondly, what has been the real-world impact from the holidays in September on both scheduling and analyses?

Excellent question. I think we have seen initial enrollment slower than we anticipated. Some of it is definitely the holidays of September, but I think mostly as we look into it, it's been an effect that as we talk to other peers and companies who've seen slower enrollment rates somehow associated with COVID, with turnover at CROs and some other general trends that we're seeing. So I think that's something that's common to the whole industry. What we've done is work on the interface with the CRO and improve the ways we interact. We've substantially increased the number of sites as well as implemented some other mechanisms internally and externally. I think we've been very encouraged by the uptick that we've seen in enrollment. And that's what we're giving the guidance on. Although we're seeing a delay in Part 1, it doesn't translate to a dramatic delay in Part 2 because I think we now have a good handle on sort of patient enrollment dynamics. So crossing my fingers, I think we're looking at it that way.

Okay. I understand. And then, I guess, looking forward to the Part 1 data in the first quarter now. For the patients that had already been enrolled and have been on study for X amount of time, is it possible to get any additional information beyond what you might have been looking for even with regard to any respiratory impacts beyond microbiological? Are you still sticking to the original plan for data release or the types of data?

Yes. So I think we're sort of looking at all the standard parameters. I think Part 1 is really for effectively a few days, so we're not expecting really an improvement in FEV1. Again, this is mostly a safety study. But we'll measure microbiology as well as FEV1 parameters, but definitely the duration is too short for something like that. In Part 2, again, still a relatively small study. But here, we're looking for more robust signals in terms of microbiology and some anecdotal signals on FEV1. Others have demonstrated some trends there, and I think we'd want to see something there as well.

Our next question comes from Mike Higgins with Ladenburg Thalmann.

Just a follow-up, I guess, on 004's enrollment pace and so forth. Were there any amendments that were written? Is it just a matter of adding additional sites? And the follow-up to my own question there would be how many sites did you go from and to for it?

Thanks, Mike. So we have not made any significant amendments. It's definitely those mechanisms of the additional sites. I do think it's important to sort of craft and perfect our interaction with the CROs. We haven't disclosed publicly the number of sites, so we can't share that information. But we have added, and I think you can see the uptick. Like everything, it's finding those sites that can give you more patients, and much depends on personal relationships. It's about learning how to work in the post-COVID world. We've seen a substantial uptick, and I think that's what gives us optimism. There is excitement in the field, right? There are a few other clinical studies in CF. More data is trickling from phage in CF. It's just an exciting time for the field, and I hope this excitement will also help in recruitment and patient awareness, etc.

Just to follow up on that, this being a CF Foundation-supported clinical trial, I assume those sites are also CFF trials. But could you confirm that for us? And if not, can you actually go outside of the CF Foundation sites?

So we're working hand in hand with the foundation. I think they've been a great partner. Their wealth of network and protocol and their approach to recruiting patients is significant. Without them, the field would not have moved so much. They are definitely our partner of choice.

Our next question comes from Kristen Kluska with Cantor Fitzgerald.

This is Rick filling in for Kristen. Could you discuss the specific questions you are asking as you pursue preclinical activities for BX005 and atopic dermatitis? Additionally, what specific factors are you considering before moving into a clinical trial for atopic dermatitis?

In the atopic derm program, we're basically working with Maruho and their expertise in formulation. I think we're trying to implement takeaways from our work on topical formulation. So we are closely collaborating with them to determine when and how best to launch the study. Again, just considering the corporate restructuring we had, most of our effort is now focused on CF. Once things head in the right direction, we'll reassess how to proceed.

Okay. And then maybe just one more thing. On the press release, you mentioned wrapping up GMP production for BX005. How should we be thinking about effects on R&D expenses in the near term, keeping this in mind?

So far, it's all been budgeted. I can let Marina provide more detail.

Yes, sure. So yes, the budget and runway we announced take everything into account, including any GMP manufacturing and programs that we announced.

We have reached the end of our question-and-answer session. I would now like to turn the floor back over to management for concluding comments.

Thank you again for joining us this morning, and we look forward to providing you future updates on the clinical programs at New Year. This is a very exciting time in phage therapy in general, and we hope to provide more information in the New Year. Thank you all again.

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