Earnings Call Transcript - PHGE Q4 2020

Operator, Operator

Greetings. Welcome to BiomX Fourth Quarter and Full Year 2020 Financial Results Call. At this time, all participants are in a listen-only mode. Please note, this conference is being recorded. I'll now turn the conference over to Marina Wolfson, SVP of Finance. Ms. Wolfson, you may begin.

Marina Wolfson, SVP of Finance

Good morning, everyone. And welcome to the BiomX fourth quarter and full year 2020 financial results and update conference call. The news release became available just after 6:30 AM Eastern Time today and can be found on our website at biomx.com. A replay of this call will be available on the Investor 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 or historic statements may be deemed forward-looking statements. For instance, we're using forward-looking statements when we discuss on the conference call potential markets opportunities, the capabilities of the BOLT platform, the design, aim, expected timing, and interim and final results of our preclinical, clinical trials and studies, the sufficiency of our existing cash, cash equivalents and short-term deposits, our pipeline and momentum and the potential of our product candidates. 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 this call this morning are Jonathan Solomon, our Chief Executive Officer; Assaf Oron, our Chief Business Officer and Dr. Sailaja Puttagunta, our Chief Medical Officer. With that, I will turn the call over to Jonathan.

Jonathan Solomon, CEO

Thank you, Marina. Good morning, everyone. And thank you all for joining us today. 2020 was a year of tremendous progress for BiomX, marked by the addition of two new programs to our pipeline, atopic dermatitis and cystic fibrosis, as well as the announcements of positive Phase 1 data for our lead program in acne-prone skin. Our progress in the clinic continued into 2021, as just last month we announced positive Phase 1a pharmacokinetic data for inflammatory bowel disease, also known as IBD. We are proud of our results to date, especially given the challenges of COVID-19, as this could not have been achieved without the dedication and persistence of the BiomX research and development team. Our steady clinical progress has positioned us for an even busier and more productive 15 months ahead. To put our progress in perspective, fueled by the advanced and agile capabilities of our BOLT platform, we expect to have four meaningful clinical data readouts within the next 15 months, as well as preclinical readouts that will further support our pipeline advancement for years to come. Specifically, in 2021 we are expecting preclinical in vivo data in colorectal cancer in the second and third quarters. We then expect Phase 2 data in acne-prone skin in the third and fourth quarters and a Phase 2 readout in cystic fibrosis in the fourth quarter. These clinical results are expected to be followed by a Phase 2 readout in atopic dermatitis in the first half of 2022 and a Phase 1b/2a readout in IBD and PSC by mid-2022. Over the past several years we have seen a lot of momentum in the microbiome space, with many global companies researching potential effects of modeling the microbiome on a wide range of diseases. The encouraging clinical results that BiomX and other companies have generated to date signal that restoring balance in the microbiome by either eliminating pathogenic bacteria or adding beneficial bacteria could have a substantial impact on various chronic diseases. We believe that our unique approach, which utilizes proprietary combination or cocktails of naturally occurring or synthetically engineered phage to create therapies that target and kill specific pathogenic bacteria without disrupting beneficial bacteria, has immense potential to provide patients with safe and effective treatments. The breadth of our pipeline, as well as our rapid progress, has been made possible due to our BOLT platform, which leverages our experience and technical achievements over the last five years. The BOLT platform, along with the understood safety of phage, enables us to develop, manufacture, and formulate novel phage therapy candidates that target specific pathogenic bacteria at an unprecedented speed. The platform employs cutting-edge capabilities across disciplines, including computational biology, microbiology, robotics, synthetic engineering, unique assay development, manufacturing, and formulation. Having all these capabilities in-house has enabled us to build a diverse portfolio spanning various indications. At this time, I would like to review each program in more detail, beginning with BX001 for acne-prone skin. As you may recall, BX001 is a topical gel comprised of a cocktail of naturally-occurring phage that targets Cutibacterium acne or C. acne, a bacteria implicated in the pathophysiology of acne vulgaris. About a year ago, we reported positive Phase 1 results which demonstrated a statistically significant reduction of C. acne levels in the high-dose cohort of BX001 compared to placebo. We also found from additional pre-specified analysis that the subjects who had an earlier and more pronounced reduction of C. acne levels after BX001 treatment when compared to placebo were those with a higher bacterial burden at baseline, and those with characteristics associated with a higher bacterial load at baseline. Features that may be consistent with a mechanism of action of our phage cocktail. Encouraged by our Phase 1 results, which helped enrich our study population, we initiated a Phase 2 cosmetic clinical study earlier this month. This trial is evaluating subjects for a longer duration, has more subjects compared to our Phase 1 trial, and aims to demonstrate a clinically meaningful effect. Results from the eight and 12-week treatment periods are expected in the third and fourth quarters of 2021, respectively. The next program I would like to discuss is IBD and PSC, which addresses a large market opportunity, where based on scientific literature, the microbiome is suggested to play a meaningful role. As you may recall, last November, we consolidated our IBD and PSC programs into one phage therapy, BX003. For both indications, we have a single broad host range phage cocktail that works by targeting Klebsiella pneumoniae strains, which are harbored in the gut of both patient populations. In February of this year, we announced positive Phase 1a data from a pharmacokinetics first-in-human study of BX002. This was the first-ever clinical study detailing pharmacokinetics of an orally delivered phage under a U.S. Food and Drug Administration IND protocol. The study met its objective of delivering a high concentration of viable phage to the GI tract through the delivery of approximately 10 to the 10 plaque-forming units, which is approximately 1,000 times more viable phage compared to the bacterial burden of Klebsiella pneumoniae, as measured in the stool of IBD patients. Encouraged by these positive results, we plan to initiate a Phase 1b/2a study for BX003 with the results expected by mid-2022. I will now turn to our recently added programs, which we initiated in November 2020. Today, we announced two phage therapy candidates, BX004 and BX005 for cystic fibrosis and atopic dermatitis, respectively, derived from our BOLT platform. Utilizing the cutting-edge methodologies and capabilities of our platform, we were able to select and test these candidates in preclinical settings in an unprecedented speed. As a reminder, the BOLT platform allows for the completion of a clinical proof-of-concept study in patients, meaning Phase 2 results are possible generally within approximately 12 to 18 months from project initiation. I will discuss the cystic fibrosis or CF program first. We expect to announce results from a Phase 2 proof-of-concept study by the end of this year, evaluating the safety and efficacy of BX004 in CF patients. According to the Cystic Fibrosis Foundation 2019 registry, out of the 33,000 CF patients in the US, approximately 9,000 patients suffer from chronic respiratory infections caused by Pseudomonas aeruginosa, a bacterium that contributes to morbidity and mortality in patients with this condition. The current treatment options typically require prolonged and repeated courses of various antibiotics, and over time, their effectiveness diminishes as multi-drug resistant strains appear. BiomX is uniquely positioned to potentially provide a groundbreaking effective and safe therapy that would improve lung function, quality of life, and life expectancy for these patients who are in dire need. Our newly selected cocktail candidate, BX004, is designed to act in two ways, as demonstrated by preclinical in vitro studies. First, to kill antibiotic-resistant strains of P. aeruginosa and second, to penetrate biofilm, which is an assemblage of surface-associated microbial cells enclosed in an extracellular polymeric substance that contributes to clogging of the lungs and is one of the leading causes of antibiotic resistance. Based on these earlier data, we look forward to announcing results from the Phase 2 study in the fourth quarter of 2021. In November 2020, we also added atopic dermatitis to our pipeline, and today announced a selection of topical phage candidate, BX005, targeting Staphylococcus aureus, a bacterium that contributes to the development and exacerbation of inflammation in atopic dermatitis. S. aureus becomes the dominant bacteria when patients experience flares, and its abundance has been linked to disease severity. With a recognized strong safety profile, phage has the potential to provide significant treatment benefits to patients, especially children, as the current standard of care carries potential safety risks and in some cases, negative side effects. In preclinical in vitro studies, BX005 was shown to be active on over 90% of a panel of S. aureus strains, including antibiotic-resistant strains isolated from the skin of subjects in the US and Europe. We are on track to initiate our Phase 2 proof-of-concept clinical study in the second half of this year, and expect results in the first half of 2022. Finally, turning to colorectal cancer. We are exploring phage-mediated delivery of therapeutic payloads for the treatment of colorectal cancer, such as immune-stimulating proteins GM-CSF and IL-15. We have observed in vitro and in vivo that our phage therapy effectively targets strains of Fusobacterium nucleatum, which are bacteria found to be present in colorectal tumors. In December, we presented the preclinical results confirming the presence of F. nucleatum in 80% of tumor samples from patients with colorectal cancer. We have already successfully engineered an IL-15 gene payload into F. nucleatum phage and now look forward to sharing preclinical results from animal models evaluating the use of phage therapy in combination with checkpoint inhibitors expected in the second and third quarters of 2021. As just described, BiomX is committed to becoming a leader in restoring health to the microbiome by deploying phage to remove potentially harmful bacteria and provide safe and effective therapies to patients who need it most. 2020 was an incredible year of growth, marked not only by positive clinical results in acne-prone skin and our pipeline expansion, but also evidenced by our collaboration with Boehringer Ingelheim to utilize BiomX’s XMarker platform, a microbiome-based platform aimed at identifying biomarkers associated with patient phenotypes in IBD. Looking ahead, we are positioned for a steady and continued pipeline advancement this year, as we progress toward mid-stage development with four meaningful clinical readouts expected in the next 15 months. We look forward to keeping you informed on our progress. I'd now like to turn the call over to Marina Wolfson, our Senior Vice President of Finance and Operations to cover our financial results for the fourth quarter and full year 2020.

Marina Wolfson, SVP of Finance

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. We also included in the press release financial information about our results in the fourth quarter of 2020. I will walk you through some of our brief highlights. Cash balance and short-term deposits as of December 31, 2020, were $57.1 million, compared to $82.4 million as of December 31, 2019. Research and development expenses were $21 million in 2020 compared to $13.5 million in 2019. The increase was primarily due to the growth in the number of employees, resulting in stock-based compensation, salaries, and related expenses, and due to the manufacturing of candidate products for clinical trials in acne-prone skin, IBD, and PSC. General and administrative expenses were $9.3 million in 2020 compared to $8.7 million in 2019. The increase was primarily due to expenses associated with operating as a public company, such as directors’ and officers’ insurance, filing, legal, and accounting expenses. Net loss was $30.1 million in 2020 compared to $20.6 million in 2019. Net cash used in operating activities was $24.4 million for 2020 compared to $17.6 million in 2019. We estimate that existing cash, cash equivalents, and short-term deposits will be sufficient to fund the company's current operating plan through mid-2022. We'd now like to open the call up for questions. Operator?

Operator, Operator

Thank you. We'll now be conducting a question-and-answer session. Thank you. Our first question is coming from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Kristen Kluska, Analyst

Hi, everyone. Thanks so much for taking my questions. Hope all is well. And apologies, I actually hopped on the call a few minutes late. So sorry, if I'm asking something you already addressed, but wanted to ask about the BOLT platform and BX004 and BX005. And if you could perhaps talk about the number of cocktails that were evaluated for these programs? And why specifically, you felt these were the most promising to take forward?

Jonathan Solomon, CEO

Thanks, Kristen. Oh, it is a pleasure. And thank you for the great question. So I think the BOLT platform has delivered, in these two cocktails in 04 and 05. I mean, we obviously screen hundreds of candidates. And we've today announced the two cocktails, which have made tremendous progress in terms of their host range and parameters for clinical outcomes. So I think we feel very confident, and after hundreds of stages that were tested, that we have a cocktail that has the attributes of host range, biofilm stability into rather delivery, and you know, not carrying toxic genes and others.

Kristen Kluska, Analyst

Great, thank you. And then for the cystic fibrosis study, what specific data might we hear from this study readout? And what are going to be the main factors you look at to decide whether to move forward with later stage trials or perhaps other stage applications that are similar?

Sailaja Puttagunta, Chief Medical Officer

Great. Thank you, Jonathan. So, for cystic fibrosis, the first study, the primary endpoint is going to be safety and tolerability of a nebulized administration of BX004 in patients with cystic fibrosis who have chronic Pseudomonas aeruginosa pulmonary infections. The key exploratory endpoints are going to be looking at the ability of this phage product to decrease the bacterial burden in the lungs of Pseudomonas aeruginosa and then looking at associated clinical parameters that will include improvement in lung functions and quality of life indicators in these patients.

Kristen Kluska, Analyst

Great, thank you.

Jonathan Solomon, CEO

You bet.

Operator, Operator

Thank you. Our next question comes from the line of Keay Nakae with Chardan Capital Markets. Please proceed with your questions.

Keay Nakae, Analyst

Yes. Thank you. Good morning. Jonathan, I'm wondering what else you can tell us you've learned in evaluating the Phase 1a data from BX002?

Jonathan Solomon, CEO

Good question, Keay. I think there are two big outcomes from the Phase 1a, right. The first one is that we can deliver high levels of phage through the GI tract. And that we have confidence in the therapeutic window, meaning we're getting levels of phage, which are 1,000 times higher than the levels of target bacteria. In our benchmark, we aimed to be around 10 times the level of bacteria that guarantees enough phage for killing. We're seeing the phage stick around for a few days in the GI tract longer than we originally anticipated. So I think that provides a good therapeutic window in moving to the Phase 1b, Phase 2a. Secondly, and I think that's the point that excites us most, is that in BX002, that was used in the first-in-human study, we actually had a phage that was more sensitive to the acidic environment of the GI tract. And the phage sensitivity was less than anticipated in the GI tract. And that was what we've anticipated based on the platform, which is, you know, a set of computational algorithms, in vitro systems that we've put together, and cell-based systems. And we've actually seen exactly that in the clinic, meaning that the more sensitive phage seem to be the greatest slightly more in titer, so its titer was slightly lower, and the more resistant strain, the more resilient one was actually in higher titers. And the numbers in a ratio made sense, it was exactly what was anticipated by the platform. So I think it gives us confidence that as we target other programs in oral delivery, we'll be able to tease out which phage they can be resistant and sort of achieve the same therapeutic window that we saw in this study.

Keay Nakae, Analyst

Okay. So based on what you learned here, how is that possibly informing the design of the next 1b/2a for 003?

Jonathan Solomon, CEO

So I think with that we know that the dose should be sufficient, right? So we don't need to do anything fancy to try to increase the dose. We don't need to dose it in a more frequent manner because we have this very good half-life in the GI tract. So I think it basically gives us a green light to move with the current dosing paradigm, with the current formulation, and the dosing frequency. Now I think we want to pursue patients that have levels of Klebsiella and want to see whether we can pick up reduction.

Keay Nakae, Analyst

Okay. Well, let's switch to atopic derm.

Jonathan Solomon, CEO

Yeah.

Keay Nakae, Analyst

And while targeting a different bacteria, obviously, the acne, I am just wondering, what have you learned in terms of the topical formulation that you're using for 001 in acne, where perhaps you're in need for the Phase 2 to go deeper? And how, in any way you're applying those learnings, at least in terms of your knowledge gained with the topical formulations for 005 for atopic derm?

Jonathan Solomon, CEO

Right. So I think atopic derm is a program we're very excited about and a testimony of the strength of the BOLT platform, right. We've initiated the program literally in November last year, and we're moving forward to launch a clinical study that will have a readout in the first half of next year. All of the work that we've done, same as what we've talked about in the Phase 1a, so all the algorithms to tease out which phage are going to be more stable in topical delivery, all the work on formulation, dosing regimen, the fact that we know how to take out bacteria in the case of acne, enables that to translate very quickly, and we've already had a cocktail candidate ready to go, pursuing now manufacturing and gearing up for dosing. And that's sort of the excitement I think of using phage and having the BOLT platform, because as a company now we can deliver four substantial clinical readouts in the next 15 months. Two of these readouts were not there in November. I think that's kind of the excitement, and again, we look forward to potentially even, you know, in the future broaden the pipeline even further because once we have all these fundamentals in place, we can just start churning out programs as things are in motion.

Keay Nakae, Analyst

And then just a final question for everything coming out from the BOLT platform, 003, 004, 005. You know, what are the remaining tasks left to do before you actually begin their respective clinical studies for each of these?

Jonathan Solomon, CEO

Just a clarification, do you mean with our current pipeline? What are the next steps?

Keay Nakae, Analyst

Yeah.

Jonathan Solomon, CEO

Got it. So I think we now have, right, the clinical candidates for all these programs have been announced. So that means we have a phage cocktail that looks good and is ready to go. It's now basically in steps of manufacturing, again, as a reminder, prior to the BOLT platform is actually the in-house manufacturing capability, which is also key to moving so quickly. We're not affected in a major way by COVID-19; we're not relying on external vendors that are, you know, swamped manufacturing vaccines, and we can do these things in-house. So basically, it's in-house manufacturing, getting everything ready, both drug product, drug substance, getting the clinical design, the regulatory blessing and then moving into a clinical study.

Keay Nakae, Analyst

Okay, great. Thanks.

Jonathan Solomon, CEO

You bet.

Operator, Operator

Our next question comes from Joe Pantginis with H.C. Wainwright. Please go ahead with your questions.

Joe Pantginis, Analyst

Hey, guys, good morning. Let me continue with BOLT. So I was just curious, obviously, you have the great advantage, as you just said, Jonathan, about the in-house manufacturing; I was looking to see if you could add some commentary about the BOLT advantages, leading to the rapidity that you've seen to be able to deliver 004 and 005 in such a quick manner?

Jonathan Solomon, CEO

Got it. Morning, Joe. So I think it is, you know, we've invested heavily over the last five years, right, and BOLT, to your point is not only the in-house manufacturing, but it is actually bioinformatics, which is crucial because a lot of times, we do a lot of analysis on the target bacteria, on the phage, on the host. There is a big chunk, which is synthetic biology. A lot of times we work either on the phage or on the host, but bear in mind that in order to move so quickly, we can't work with hosts which are your standard APCC, because we're screening things from patients. So we need to have the capability to engineer those as well, and then the teams that are doing assays and microbiology that have been doing it now for a while, gained a lot of experience and are relying on all the know-how and IP from both the Weizmann Institute and MIT. And basically that's what we're saying, it's kind of moving faster and faster, as these guys just know what they're doing and they're just becoming more and more experienced in it.

Joe Pantginis, Analyst

Got it. No, that's helpful. Thank you. And then just switching over to acne, just curious if you can provide maybe not numbers, but sort of how the enrollment traction is going right now? And are you seeing any impacts regarding the volatility of different regions with respect to COVID?

Sailaja Puttagunta, Chief Medical Officer

Thank you, Jonathan. So this Phase 2 study in acne is a single-center study. And fortunately, we have not seen any impacts of COVID-19 in that particular region so far, and enrollment is definitely on track to deliver top line results as planned.

Joe Pantginis, Analyst

Right. And then my last question, if you don't mind, and this is actually quite a forward-looking statement, so bear with me. When you look at the colorectal program, …

Jonathan Solomon, CEO

Well, call the lawyers, yeah.

Joe Pantginis, Analyst

Exactly. With regard to the colorectal program, you know, it's actually quite exciting to be able to arm phage, as you alluded to today, also in your press release, and your prepared comments. Is this a program type of program or platform that you would look to try to hold on to as long as you can versus staying to your core principles and sort of the anti-infective arena? Or just sort of how do you look at it from long-term planning, you know, including BB?

Jonathan Solomon, CEO

Joe, I think it's a good question because it's really a program we don't spend enough time talking about. And we're actually very excited because, you know, the team has made spectacular progress in terms of synthetic biology. And these are not trivial things. Think about that all the tools that are usually used to in microbiology are all around the E. coli family. To target the cure in colorectal cancer, Fusobacteria is a nasty bacteria, right. The team has been working north of two years to kind of crack the code, and they've done it. There's a lot of supporting data for the role of the bacteria and the presence of the bacteria, and the potential benefits of adding a payload. So I do think it is a very valuable program that can deliver meaningful impact to patients. What's unique here is that if the concept works, right, there are other tumors that actually have bacteria in them. So that's going to give us a lot of flexibility. You could decide to partner maybe on one type of cancer or take another type of cancer by yourselves, you know, try the first one by ourselves and partner for the future one. So again, we don't know at this point, but it is a really broad indication, and there is a reason we're keeping it and investing in it because it's a huge unmet need. There's a lot of potential that's truly differentiated in oncology.

Joe Pantginis, Analyst

Got it. Thank you, Jonathan.

Jonathan Solomon, CEO

Yeah.

Assaf Oron, Chief Business Officer

Maybe, Joe, this is Assaf to add on that from the business development perspective. We're currently focusing on mainly generating the in-vivo data in the next few months. And we are today announcing that we've already engineered an IL-15 gene payload into the phage. Eventually, just as a reminder, the intent is to treat patients with this therapy together with checkpoint inhibitors. We can potentially partner on some applications of cancer on certain malignancies and on others try to develop them ourselves.

Joe Pantginis, Analyst

Thank you.

Operator, Operator

Thank you. At this time, we’ve reached the end of our allotted time for questions and answers. And I'll turn the floor back to Jonathan Solomon for closing remarks.

Jonathan Solomon, CEO

Thank you. I want to thank all of you for joining us this morning and our shareholders for their support and confidence in our work. Our researchers who are hard at work advancing our clinical studies, and of course, the patients who participate in them. Additionally, I want to thank the BiomX team for their dedication and ingenuity despite the challenges that 2020 imposed. Have a wonderful day and please reach out to us if you have any questions.

Operator, Operator

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