BiomX Inc. Q4 FY2023 Earnings Call

Good morning, and welcome to the BiomX Full Year 2023 Financial Results and Corporate Update Conference Call. I would now like to turn the conference over to Avi Gabay, Interim Key Financial Officer of BiomX. Avi, please proceed.

Thank you, and welcome to the BiomX Full Year 2023 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 www.biomix.com. A replay of this call will also 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 are using forward-looking statements when we discuss on the conference call the sufficiency of the combined company's financing, potential stockholders' approval of certain matters related to the securities issued and related matters in connection with the Adaptive Phage Therapeutics or APT acquisition, potential market opportunities, the ability to drive value for stockholders, the design, aim, expected timing, and interim and final results of our preclinical and clinical trials, the regulatory process and discussions with the FDA, the potential benefits and commercial opportunities for product candidates and the potential safety or efficacy of BX004 and BX211. In addition, past and current 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 provision, 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.

Good morning, everyone. The fourth quarter of 2023 proved to be one of the most significant and exciting periods for our company, highlighted by the positive results from Part 2 of our Phase Ib/IIa study of BX004. Soon after achieving this major clinical milestone, we announced the transformational acquisition of APT in March, adding to our pipeline a second Phase II product candidate, BX211, for the treatment of diabetic foot osteomyelitis. In connection with this acquisition, we also raised $50 million in a private placement led by affiliates of Deerfield Management, AMR Action Fund, with the participation of additional existing and new investors, including the Cystic Fibrosis Foundation, Orbimed, and Nantahala Capital. We deeply value and appreciate the support from these widely respected institutional investors. Including net proceeds from the financing and our existing capital, BiomX now expects to have sufficient funding to reach multiple clinical milestones over the next two years, including expected data readouts for BX211 and BX004, in the first quarter of 2025 and third quarter of 2025, respectively. With approximately 80 compassionate use cases, multiple clinical studies and INDs, the combined company possesses an extraordinary depth of clinical experience in developing phage products along with the expertise in regulatory affairs to help further advance these programs into pivotal testing. The acquisition created a leading phage company with one of the most advanced pipelines of phage-based therapeutics, which includes two clinical phage products, each having the potential to advance the standard of care in their respective disease areas. As noted, the combined company has two significant Phase II readouts anticipated in 2025 which, if successful, could potentially drive significant value for stockholders. I would like to spend more time today focusing on our new program in diabetic foot osteomyelitis or DFO, and our ongoing Phase II clinical study. The study has already surpassed 70% of our targeted enrollment, and we remain on track to report the week 13 treatment results in the first quarter of 2025. Ulcers in patients with diabetes are a complication caused by a combination of poor blood circulation, susceptibility to infection and nerve damage from high blood sugar levels. When there is limited blood flow to the wounded area, the body struggles to heal its wounds. These wounds develop into diabetic ulcers. Once infected, the ulcer deepens to the extent that it spreads into the bone; the condition is classified as DFO, which is a very serious condition that could lead to lower limb amputation. DFO standard of care often includes offloading of pressure from the foot, debridement surgery, and a course of topical oral or IV antibiotic therapy close to six weeks. Unfortunately, 30% to 40% of DFO cases fail, leading to amputations. Depending upon the location of the infected bone, amputations often result in the loss of a toe or in more severe cases, the loss of a limb below or above the ankle. With a staggering number of approximately 160,000 lower limb amputations in diabetic patients annually in the U.S. alone, 85% of which are caused by DFO according to the Centers for Disease Control, this remains an area of high unmet need. One of the main reasons for the limited effectiveness of antibiotic therapy is poor delivery to the infected bone. Biofilm, a polysaccharide mesh secreted by bacteria infecting the bone and ulcer creates a barrier that inhibits antibiotic penetration in these patients who already suffer from poor blood circulation. Beyond delivery, antibiotic resistance is an additional contributing factor to the limited effectiveness of antibiotic treatment. For example, according to literature, approximately 40% of Staphylococcus aureus infections are Methicillin-resistant Staphylococcus aureus. Phage therapy has the potential to address these key drivers for treatment failure. When properly selected, phage effectively targets and kills antibiotic-resistant bacterial strains and has the capacity to break down biofilm. For example, patients selected for the treatment in our current DFO study were found, when sequenced, to have multiple domains of catalytic activity against Staphylococcal biofilm components. Moreover, a main reason that supports phage's therapeutic approach to improve treatment outcomes in DFO are the positive results from numerous compassionate cases using phage therapy. Out of 12 cases reported in scientific literature, 11 resulted in a positive outcome of wound healing and avoiding amputation. BX211, developed under APT's technology platform, is based on a personalized approach, which utilizes one of the largest phage banks in the world to optimally pair individualized phage therapy to the specific strains of bacteria biopsied from the patient. The treatment targets Staphylococcus aureus, which is considered the most common bacterial infection in DFO, compromising approximately 50% of cases and is regarded as the most pathogenic bacteria due to its rapid doubling time and arsenal of virulence factors. We estimate that BX211 represents a commercial opportunity of $1 billion in the U.S. and over $2 billion worldwide. We are now conducting a randomized double-blind placebo-controlled multicenter Phase II study, investigating the safety, tolerability, and efficacy of BX211 in subjects with DFO associated with Staph aureus. Approximately 45 subjects are planned to be randomized at a 2:1 ratio to BX211 or placebo. BX211 or placebo is administered weekly by topical and IV route at week 1 and by the topical route only at each of weeks 2 to 12. Over the 12-week period, all subjects continue to be treated in accordance with the standard of care, which includes antibiotic treatment as appropriate. As of now, we have enrolled 32 patients in the study, which amounts to over 70% of the target enrollment, and are on track to report results at week 13, evaluating healing of the wound associated with osteomyelitis in the first quarter of 2025. We also expect to report a second readout in the first quarter of 2026, which is planned to evaluate amputation rates and the resolution of osteomyelitis based on X-ray clinical assessment in established biomarkers such as ESR and CRP at week 52. Regarding the cystic fibrosis or CF program, in the second quarter of 2024, we expect to hold a Type C meeting with the FDA to discuss our clinical development plan for BX004. Assuming alignment with the FDA and the completion of our CMC work, we intend to submit a protocol to all relevant regulatory authorities and, following approval, begin patient enrollment in a Phase IIb study. As noted, we estimate releasing top line results from this study in the third quarter of 2025. And now I'll pass it over to Avi to review our fourth quarter and full year 2023 financial results.

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-K, which will be filed later today. I will walk you through some of our brief highlights. As of December 31, 2023, cash balance and short-term deposits were $15.9 million compared to $34.3 million as of December 31, 2022. The decrease was primarily due to the net cash used in operating activities. In 2023, our R&D expenses net were $16.7 million compared to $16.2 million in the previous year, mainly due to increased expenses related to the CF clinical trial that were partially offset by reduced salaries and related expenses as well as stock-based compensation expenses, and pausing in the development of the atopic dermatitis clinical trial. In addition, increased consideration from research collaboration resulted in reduced R&D expenses. General and administrative expenses were $8.7 million for 2023 compared to $9.5 million for the prior year. The decrease was primarily due to a decrease in the company's directors and officer insurance premium. Our net loss for 2023 was $26.2 million compared to $28.3 million for the prior year. Net cash used in operating activities for 2023 was $21.3 million compared to $29.1 million for the same period in 2022. On March 15, 2024, we closed the acquisition of APT concurrent with an investment of $15 million. Subsequent to the financing, we have fully repaid the remaining balance of approximately $10.4 million under the Hercules loan agreement. We would like to emphasize that although after the financing, we have sufficient cash, cash equivalent, and short-term deposits to fund our current operating plan for at least the next 12 months, our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. This is mainly due to the potential risk of our stockholders not approving the conversion of the convertible preferred stock that was issued as part of the acquisition of APT and the concurrent investment.

Thank you, Avi. 2024 is shaping up to be a substantial year for BiomX. With the completion of the APT acquisition and the $50 million investment from top institutional healthcare investors, our company is well-positioned to build significant value for our stockholders as we continue advancing the BX004 and BX211 clinical programs. BX004 has already demonstrated safety and proof-of-concept efficacy in our Phase Ib/IIa study. We look forward to reporting data on both BX004 and BX211 in 2025. We have also added additional scientific and business leadership to our Board of Directors, which will play an important role in helping guide our clinical development efforts and interactions with regulatory authorities while also helping us optimize our capital resources. Thank you again for joining us this morning, and we look forward to providing you with updates throughout the year.

Our first question is coming from Joseph Pantginis from H.C. Wainwright.

So first, Jonathan, I just want to get the update since the merger, how is the process looking regarding outstanding efficiencies and what might still be outstanding of note?

So Joe, great question. I think things are now moving. As we go through the process, we're often in Gaithersburg now, and we're quite impressed with the team and the work that APT is doing. Of course, this is a process that will take a while, and we're actively evaluating redundancies. There will be some, and it will take us a while to finalize all the specific plans going forward.

Understood. I appreciate the additional details you shared today on DFO. To explore further, I've been considering DFO and its similarities to critical limb ischemia. One aspect that stands out to me is the amputation rate, which is a crucial endpoint similar to that of critical ischemia. Additionally, there are many proactive physicians working to prevent unnecessary amputations. So I guess the curiosity on my end is different aggressive physician techniques or say maybe lack of standards, potentially, how does that impact what might be considered placebo impact or placebo effect on this study?

So you're spot on. I think amputation is a much more complicated endpoint, and I think that's what we look at as more exploratory. We'll look at all that. I think in this study, we're looking at a shorter timeframe and focusing on the ulcer's potential shrinkage and maybe healing in some of these patients. I do agree that amputation is tougher. There is ongoing research and a body of work looking into additional surrogate endpoints, looking at the X-ray and some other endpoints. So that might give us a better sense of the healing process in the shorter timeframe. There are also some KOLs advocating looking at even shorter timeframes than the 12 weeks we are looking at. So I think we'll see all of that. Again, in this study, we're looking at a shorter timepoint and well before all of the amputations kick in. We'll obviously follow the patients for a longer period and take all that information into conversation with the FDA. But I agree, very reminiscent of I think, the discussions we had in CS, you can have and try to look at endpoints which you could see something going on earlier and hopefully with fewer patients; that's ideal because it is more difficult.

Our next question today is coming from Michael Higgins from Ladenburg Thalmann.

This is Farhana on behalf of Michael. Congrats again from us on the Adaptive acquisition deal. Two questions from us on BX004. Any feedback for us on any additional data analysis you have going on from the Phase II data? And if yes, when might we see that additional data?

Thank you for the kind words. So far, we're not giving any guidance on anything new. We are considering presenting at a few of the top conferences. So once we have it and get the acceptance, we will obviously update. I think the important activity that we're gearing up for, aside from preparation for the next clinical study, is obviously the meeting with the FDA. That's something we expect in the middle of the year; it will be crucial. And again, as before, we are working hand-in-hand with the CF Foundation, and this kind of represents probably the most advanced phage program. So I think there's a lot of interest in the kind of feedback that the FDA will give us.

We have reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

So I just want to thank everyone for joining us this morning, and wish you all a great day. Hopefully, we'll keep on updating you as we make further progress. Thank you.

Thank you. That does conclude today's teleconference webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.