Earnings Call Transcript - PHGE Q2 2023

Operator, Operator

Good morning, and welcome to the BiomX Second Quarter 2023 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.

Marina Wolfson, CFO

Thank you, and welcome to the BiomX Second Quarter 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 biomx.com. A replay of this call will 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 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, the design, aim, expected timing and interim and final results of our preclinical and clinical trials, the next stages in development, the sufficiency of our existing cash, cash equivalents and short-term deposits, the potential benefits of our product candidates, the expected benefits from FDA Fast Track designation 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 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.

Jonathan Solomon, CEO

Thank you, Marina, and good morning, everyone. I'm pleased to report that we continue to make significant progress in our BX004 program. We are delighted to update that patient screening for Part 2 of our Phase 1b/2a study has been completed, with patient enrollment expected to exceed original estimates, reflecting solid execution by our clinical operations team, along with a growing awareness among physicians and patients within the cystic fibrosis community and the potential of this innovative program. I'm also pleased to announce that BX004 has just received Fast Track designation from the FDA, which provides further recognition that the BX004 program is addressing one of the most serious and challenging unmet medical needs facing the CF community. The FDA defines addressing a significant unmet medical need as providing a therapy where none exists, or providing a therapy which may be potentially better than available therapies. The benefit of Fast Track designation includes, but are not limited to, early and frequent communication with the FDA throughout the entire drug development and review process. In addition, Fast Track designation means that BX004 may also be eligible for rolling submission and priority review of Biologics License Application and/or new drug application, which assures that questions and issues are resolved more quickly, often leading to earlier drug approval and access by patients. As a reminder, BX004 is being developed for the treatment of chronic Pseudomonas aeruginosa, or PsA, pulmonary infections in patients with cystic fibrosis. In February 2023, we announced positive results from Part 1 of the trial, which came in better than expected based on the treatment arm displaying notable reductions in PsA bacterial burden. Following this announcement, in June, we had the opportunity to formally present these data during the late-breaking session at the 46th European Cystic Fibrosis Conference or the ECFC, which is an important international conference that attracts a wide audience of CF thought leaders, advocacy groups, and patients. I can say unequivocally that physicians were excited with the notable reduction in bacterial burden displayed in Part 1 of our study, and we came away from the ECFC meeting with the impression that chronic PsA pulmonary infections continue to pose a challenging unmet need for CF patients today. We therefore believe that BX004 is one of the few and most promising early clinical candidates for treating these infections in CF patients. With our patient screening efforts now complete, we estimate a 4- to 6-week delay in our top line results for Part 2 of the study, now expected to be announced in November of this year. Under the Part 2 study design, at least 24 CF patients receive BX004 twice a day, but over a longer 10-day treatment period compared to Part 1. Similar to Part 1, results from Part 2 are intended to provide additional data on safety and reduction in PsA bacterial burden, along with other exploratory endpoints. Assuming positive results from this larger CF study group, we anticipate holding a meeting with the FDA to plan the next stage of BX004's clinical development. In addition, in May 2023, we announced a second closing of a $7.5 million private placement with a select group of institutional and individual investors, which provided additional funding to support the BX004 program and other R&D activities. We also added two highly accomplished pharmaceutical executives to our Board, who collectively bring to BiomX considerable business and legal experience. In summary, we are very pleased with the continued progress in the BX004 program. The feedback we're receiving from physicians, patients, and other stakeholders within the CF community has been highly positive and constructive, reinforcing our view in the therapeutic potential of BX004 to treat life-threatening infections CF patients are facing. I'd like now to turn the call to Marina to review our financial results for the second quarter of 2023.

Marina Wolfson, CFO

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 June 30, 2023, cash balance and short-term deposits were $30.7 million compared to $34.3 million as of December 31, 2022. The decrease was primarily due to cash used in operating activities, partially offset by proceeds we received from the PIPE financing. Research and development expenses, net, were $3.8 million for the three months ended June 30, 2023, compared to $4.6 million for the same period in 2022. The decrease was primarily attributed to several factors: a decrease in both salaries and stock-based compensation expenses, which resulted from a reduction in workforce as part of a corporate restructuring in 2022, as well as deprioritizing preclinical and clinical activities related to our atopic dermatitis product candidate, BX005. Additionally, we received higher proceeds from collaboration agreements. However, this decrease in R&D expenses, net was partially offset by expenses related to conducting the clinical trial of our CF product candidate, BX004. General and administrative expenses were $2.3 million for the three months ended June 30, 2023, compared to $2.4 million for the same period in 2022. The decrease was primarily due to a reduction in the company's directors' and officers' insurance premium. Net loss was $6.4 million for the second quarter of 2023 compared to $7.5 million for the same period in 2022. Net cash used in operating activities was $9.1 million for the six months ended June 30, 2023, compared to $16.4 million for the same period in 2022. We estimate that existing cash, cash equivalents, and short-term deposits will be sufficient to fund the company's current operating plan into the third quarter of 2024. And now I'll turn the call back over to Jonathan for his closing remarks.

Jonathan Solomon, CEO

Thank you, Marina. During the first half of 2023, we made significant progress in advancing our BX004 program. This momentum has already carried through into the second half of 2023, with the FDA granting BX004 Fast Track designation, and the completion of patient screening in Part 2 of our Phase 1b/2a trial. The Part 1 results were clearly better than we had expected, and our positive view on BX004 was further reinforced based on supportive feedback from this year's ECFC meeting. Our attendance at ECFC also served as a poignant reminder that thousands of CF patients are in dire need of new treatment approaches to combat these pervasive and deadly PsA infections. Based on our promising results thus far, we believe BX004 is emerging as a potential viable therapeutic candidate to address the significant unmet medical need in CF. With that, Marina and I are now happy to take any questions. Operator?

Operator, Operator

Today's first question is coming from Joe Pantginis of H.C. Wainwright.

Joseph Pantginis, Analyst

Jonathan and Marina. So first, on BX004 for CF, on the Part 2 data, I guess I want to understand some of the logistics around data. And I guess, does it have to do with exceeding the enrollment, particular endpoints that you're requiring additional time for analysis? How should we be looking at that? And then also can you give a sense of how many patients beyond the expected enrollment you hit?

Jonathan Solomon, CEO

Enrollment and patient recruitment have significantly exceeded our expectations, driven by several factors. There's enthusiasm stemming from the Part 1 data and strong execution from our team. We've opened additional centers and secured more patients than we had anticipated. Everything is going according to plan with more patients, and while there is a slight delay due to the increased volume of patients progressing through the pipeline, there are no major operational issues. At this point, we aren’t providing specific guidance on patient numbers, but we hope to increase that count, which will enable us to gather more data and plan for future studies. It's encouraging, especially considering the challenges we faced with recruitment in Part 1; Part 2 is progressing very well.

Joseph Pantginis, Analyst

No. I appreciate that color. And then, look, my next question is certainly forward-looking, and I'll preface it by saying the answer could change five minutes from now. But when you look at your upcoming discussions with regulatory authorities for looking at studies beyond Part 2, what does your current wish list look like as to what a clinical program might look like to get to the market as quick as possible, pending positive data?

Jonathan Solomon, CEO

It's definitely a challenging question. We have received the Fast Track designation, which is a positive step. We're also looking to pursue other options like orphan designation, breakthrough therapy designation, and hopefully, accelerated approval. These will depend on the data we gather and our discussions with the FDA. We've seen examples of fast approvals, such as Insmed's accelerated approval, and some cases with smart design processes. Our goal is to expedite the development of a product that addresses the significant unmet need we're witnessing. The Fast Track designation is an initial indication that the FDA recognizes this need and is willing to open more channels for discussion.

Joseph Pantginis, Analyst

No, I appreciate that. If I could just ask, aside from the obvious answer of resources, are there other potential avenues to reignite pipeline assets?

Jonathan Solomon, CEO

You're always welcome to ask more questions. We established the company as a platform and are exploring several projects like Atopic, which are currently on hold pending more resources. If Part 2 performs as well as Part 1, it would indicate a second successful independent replication of a randomized controlled study with a placebo that shows effectiveness. This would likely instill confidence in us and others regarding our understanding of this new modality, potentially leading to various discussions on additional indications and opportunities. With phage therapies, we can move relatively quickly into the clinic with other programs, though it will require more resources or collaboration.

Operator, Operator

The next question is coming from Michael Higgins of Ladenburg Thalmann.

Michael Higgins, Analyst

Congrats from us as well on the Fast Track designation. I want to poke back a bit on the delay of data with additional patients from here in Q3 to November. Just want to clarify for ourselves and everyone, how much of this data you've been able to review along the way? Or has there been a review by the CRO along the way?

Jonathan Solomon, CEO

Yes, we are completely unaware of the data and have not made any decisions based on it. However, we have noticed excitement among the sites, with more patients being referred by the centers and more patients going through the screening process than we initially expected. Our decision is that the more patients involved, the better, as long as the delay is minimal. As I've mentioned before, we understand that this is a new approach, and the more data we gather, the better we will be prepared for discussions with the agency and the design of the next clinical study.

Michael Higgins, Analyst

Yes, it definitely helps to add more patients ahead of the pivotal start. A question for you on the next steps. Do you need to have the six months' safety data in hand before your end of Phase 2 meeting with the FDA?

Jonathan Solomon, CEO

It's a great question. The estimate is no. We have been comfortable with the situation, and the FDA has conducted public workshops on phage, recognizing the safety of this approach. So, I see it as a gentle follow-up for Part 2. Hopefully, the information we gather by day 28 should be adequate to initiate discussions.

Michael Higgins, Analyst

And one last one, if I could here before I jump back in the queue and maybe come back in with another question later. But we saw additional Phase 1b data in CFC, including baseline information. Is there additional information that you plan to share, such as, is there any data past the 15-day endpoint? Any plans? If so, to share that, please?

Jonathan Solomon, CEO

We haven't examined the design yet. As you may remember, Part 1 primarily served as a brief safety study to set the stage for Part 2. We don't have extended follow-up data at this time. However, we are finalizing some additional information that we hope to present at an upcoming conference. Most of the significant findings will definitely come from the data gathered in Part 2, along with longer follow-up results.

Operator, Operator

At this time, I'd like to turn the floor back over to Mr. Solomon for closing comments.

Jonathan Solomon, CEO

So I want to say thank you again for joining us this morning. We look forward to providing you with future updates on our clinical programs in the new year. Have a wonderful day, and please reach out to us if you have any questions. Thank you again.

Operator, Operator

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.