BiomX Inc. Q1 FY2024 Earnings Call

Hello, and welcome to the BiomX First Quarter 2024 Financial Results. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Avi Gabay. Please go ahead, Avi.

Thank you, and welcome to the BiomX First Quarter 2024 Financial Results and Corporate Update Conference Call. The press release became available just after 6:30 a.m. Eastern Time today and can be found on our website. A replay of this call will also be available on 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 historical 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 stockholder approval of certain matters related to the securities issued and related matters in connection with the Adaptive Phage Therapeutics or APT merger, potential market opportunities, the ability to drive value for stockholders, the design, recruitment, aim, expected timing and interim and final results of our preclinical and clinical trial, the regulatory process and discussion with the FDA, the potential benefits and commercial opportunities of our product candidate and the potential safety and 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 trial. 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'll turn the call over to Jonathan.

Good morning, everyone. For the first time, BiomX is reporting results for a combined entity following our merger with APT in March, and Avi will elaborate more on this. Overall, the first quarter of 2024 was nothing less than transformational for BiomX. The company has now entered into a new era. With the merger with APT in March, we have expanded our mid-clinical stage programs, which we believe constitute the leading phage-related pipeline in the industry. We are now advancing diverse approaches focused on developing natural phage therapies and personalized phage treatments. With the recent merger, we've added a second Phase II product candidate, BX211 for the treatment of diabetic foot osteomyelitis or DFO, and I'll review our progress shortly. BX004, our most advanced mid-clinical stage candidate, has already shown what we believe are promising clinical results supporting the potential of phage therapy to treat harmful bacteria underlying serious chronic infections in cystic fibrosis patients. The broadening of our pipeline, the diversity of our approaches, and the data we've seen to date are all key in reducing risk inherent in biotech development. Concurrently with the merger with APT, we raised $50 million of gross proceeds in a private placement led by affiliates of Deerfield Management and the AMR Fund with the participation of additional existing and new investors, including the Cystic Fibrosis Foundation, OrbiMed, and Nantahala Capital Management. These important and accredited life sciences investors provide further validation for the potential of Phage Therapy as the new therapeutic modality and the strength of our lead candidates, each having the potential to advance the standard of care in their prospective disease area. Including net proceeds from the financing and our existing capital, BiomX now expects to have sufficient funding to reach multiple important clinical milestones through 2025, including expected data readouts for elite candidates BX211 and BX004 in the first quarter of 2025 and the third quarter of 2025, respectively. We believe these Phase II data readouts could potentially drive significant value for our stockholders. We are thrilled with the continuing progress of both of our Phase II programs. On our last earnings call, I had the opportunity to take a deep dive into BX211 as part of the merger with APT. As a reminder, BX211 is a personalized phage treatment being evaluated in a randomized, double-blinded, placebo-controlled multicenter Phase II trial to subjects with DFO associated with Staphylococcus aureus. This is an area of high unmet need. Each year, there is a staggering number of approximately 160,000 lower limb amputations in diabetic patients in the U.S. alone, 85% of which are caused by DFO, according to the Centers for Disease Control and the literature. We believe that phage-based therapeutic approaches have the potential to greatly improve treatment outcomes in DFO, and reports in the scientific literature of compassionate use with Phage Therapy have shown that 11 of 12 cases resulted in positive outcomes of wound healing and avoiding amputation. Findings from these cases played an important role in the design of the ongoing Phase II of BX211. With the target enrollment of 45 patients, the trial has already surpassed 70% of this target, and we remain on track to report on the Week 13 treatment results in the first quarter of 2025. We are also excited by the progress of BX004, our other lead mid-clinical stage candidate. BX004 is a fixed multi-phage cocktail for the treatment of cystic fibrosis patients with chronic pulmonary infections caused by Pseudomonas aeruginosa, a main contributor to the morbidity and mortality in these patients. In January of this year, we were granted Orphan Drug Designation by the FDA for BX004. More recently, in April, we presented positive safety and efficacy results from Part 2 of a Phase Ib/IIa trial of BX004 at the European Society of Clinical Microbiology and Infectious Diseases Global Congress. In fact, our presentation was selected as a Top Poster, ranking amongst the top first and second percentiles of top-rated abstracts in the category submitted and accepted at the Congress. We believe that the data for BX004 is some of the most promising findings published to date for Phage Therapy for the treatment of chronic pulmonary infections in cystic fibrosis patients. We've shown with BX004 both conversion to sputum culture negative Pseudomonas aeruginosa in 14.3% of patients and demonstrated signals of improved pulmonary function after only 10 days of treatment, both findings in contrast to the results in placebo. Under a Phase IIb trial, we now plan to treat for a much longer treatment duration of 2 months, which we believe has the potential to demonstrate a more pronounced effect on both microbiological and lung functional readouts. As previously reported, by mid-2024, we anticipate holding a Type C meeting with the FDA to discuss our clinical development plans for BX004. Pending alignment with the FDA and completion of the remaining CMC work, our plan is to submit a Phase IIb study protocol to all relevant regulatory authorities and initiate the study by the end of this year. As already noted, we estimate releasing top-line results in the study in the third quarter of 2025. We are thrilled to have what we believe is the broadest and most advanced phage pipeline with promising data already reported in key readouts in Phase II studies, both the lead program in 2025. On this final note, I'll now pass it over to Avi to review our first-quarter 2024 financial results. Avi?

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 that was filed yesterday. I will walk you through some of our brief highlights. As of March 31, 2024, cash balance and short-term deposits were $44.1 million compared to $30.3 million as of March 31, 2023. The increase was primarily due to the private placement, which was partially offset by net cash used in operating activities and the repayment of the debt facility in March 2024. The company estimates its cash, cash equivalent, and short-term deposits are sufficient to fund its operations throughout the fourth quarter of 2025. In the first quarter of 2024, research and development expenses net totaled $4.1 million compared to $4.6 million in the first quarter of 2023, mainly because of less expenses due to the end of the cystic fibrosis clinical trial and was partially offset by lower grant payment from the Israel Innovation Authority and R&D expenses related to APT that were incurred after the merger. General and administrative expenses were $2.7 million for the first quarter of 2024 compared to $1.6 million for the same period in 2023. The increase was primarily due to expenses related to the merger with APT and the concurrent private placement. Net loss for the first quarter of 2024 was $17.3 million compared to $6.4 million in the first quarter of 2023. The increase is mainly due to change to the fair value of private placement warrants that were issued in this quarter. Net cash used in operating activity for the first quarter of 2024 was $11.4 million compared to $5 million for the same period in 2023. On March 15, 2024, we closed the merger with APT, concurrent with an investment of $15 million. We would like to emphasize that although after the financing, we believe we will have sufficient cash, cash equivalent, and short-term deposits to fund our current operating plan at least 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 merger with APT and the concurrent investment. And now I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

We've accomplished a lot so far in 2024, and we're looking forward to the continuing substantial momentum at BiomX this year and into 2025. With recent development, BiomX has set itself apart as a leader in developing phage-based therapeutics. The merger and $50 million investments from top institutional healthcare investors allowed us to expand our pipeline and now position us to achieve key data readouts next year. By advancing our BX004 and BX211 clinical programs, our company is poised to build significant value for our stockholders. As at the recent ESCMID Congress, our team will continue to seek important opportunities to present in peer-reviewed forums. Based on our recent financing, we believe the company has sufficient cash runway to reach additional important clinical milestones as we advance our phage candidates addressing serious chronic infections. Indeed, it is a new era for BiomX.

Our first question today is coming from Joe Pantginis from H.C. Wainwright.

So two questions, Jonathan. First, for the upcoming Phase IIb in cystic fibrosis, I was just curious, even since your year-end call or what have you, as you've been talking to additional physicians and KOLs, has there been any additional evolution in your thinking about the design of the study, inclusion criteria, etc., going into your Type C meeting? And then the second question is how are your integration efforts going with regard to the varying manufacturing facility?

Joe, and thanks for the great questions as always. So first, on the cystic fibrosis study. We spent quite a lot of time analyzing the data and working hand-in-hand with the CF Foundation. I think we have a good handle on the design of the Phase IIb, trying to address some of the questions that we've discussed and trying to increase the percentage of patients that experience conversion and get even clearer signals on both microbiology and clinical endpoints. So I think that has matured. Again, we're waiting for the FDA meeting, and we'll see where the feedback is. If all is according to plan, then I think we're locked and loaded to initiate the study at the end of the year. So far, I think there was a lot of work upfront, and we feel good about it. The integration is now in Sunny D.C.; by the way, the weather is gorgeous. It's definitely not a simple task to integrate these two companies, but I think as time goes on, the rationale kind of plays out. I do think it plays into APT's strength in terms of manufacturing capability, access to compassionate cases, and knowledge. The access to governmental agencies, all of those have strengths that quite frankly BiomX lacked. I think it's proceeding well. Like every integration, it's not simple, but there's been a lot of effort. The teams have been traveling quite extensively, and now I think we feel the situation has stabilized, and there are very clear work plans, budgets approved, and we're ready to go. Crossing fingers to continue the momentum and again, generate more value.

Our next question is coming from Yale Jen from Laidlaw & Company.

Jonathan. I got two questions here. First one, just a follow-up with Joe's question, which is that in terms of the Phase II study, would that be potentially adding an extension part after the trial was done, so patients can get a longer treatment? And that's one and then I have a follow-up.

Okay. So I think the Phase II is already quite a long duration, like we're going for two months. We'll follow up the patients and think about whether we extend if we're seeing conversion. I think these are items that we're discussing. A lot depends on feedback from the FDA. There will be a longer follow-up for sure. I believe there's a chance to also explore extending it. Definitely, I think we'll want to extend it to some extent in the patients that experience conversion to see how long we can keep the infection at bay. So it's definitely one of the items that we're discussing.

Yes, I do. And this is a little bit more fundamental question here. As we know that the phage has the lytic and the lysogenic phase. How would you ensure that all your product retains in a lytic state, and that will be the most effective state of the phage for killing the bacteria?

Yes, yes. It's a good question, and viruses are phage viruses, right? So I do think it's a valid analogy. By the way, the big conferences like Viruses and Microbes, the Phage Conference. I think to your point, the FDA has been very clear on not wanting to advance forward phages that are lysogenic. The way to address it is by making sure that all the phage that we deploy, whether in the personalized approach, such as the DFO study or in the cocktail, don't have any lysogenic genes. We sequence everything; again, there are quite a few genes. It's not that a spontaneous single mutation will introduce lysogeny. There is no lysogeny change whatsoever. The probability of a phage developing lysogenic genes is manageable. This is all part of a battery of tests such as generalized transaction and other attributes that the FDA has been very clear on regarding what characteristics they want to see and what characteristics they don’t want to see in a phage product undergoing development.

This is Farhana on behalf of Michael. Congrats on your continued progress. I have two questions. The first one is about BX004. Can you confirm that aligning with the EMA is also planned for 2024? The second question is regarding BX211. Are there any obstacles to completing enrollment in the Phase II DFO study?

Good questions. Just to clarify regarding the first question, you mean like the European compliance of BX004? Got it. So BX004 is going after cystic fibrosis, Orphan indication, as we've discussed through the years. Recruitment is not trivial. We struggled a bit in Part 1, but then we gained a lot of momentum in Part 2. That was a global study, and we had U.S. sites, European sites, as well as Israeli sites. So that's going to continue. I think we're looking at many more sites in the second study of the Phase IIb. Definitely, Europe will be key. We've experienced very good recruitment in the U.S., and we'll continue that. That's part of the work plan and timelines we've presented. For BX211, enrollment is going well. As reported this morning, 70% of patients have been enrolled. These studies are complex indications. We want to verify that the patients have the bacteria. We're deploying the phage bank. That means we ship basically phages to our sites. We optimize the best phage for that patient and send it back—that's the treatment the patient gets. We have seen challenges, and there is a lot of experience in the system by now with these studies. I think we've learned a lot, and we'll put some effort into improving recruitment rates. So far, it's going well and meeting our expectations, but we know clinical studies are always difficult. We just hope it continues the way it has.

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

Thank you again, everyone, for joining us this morning. We look forward to providing you with updates throughout the year and have a great day. Thank you.

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