BiomX Inc. (PHGE) Q2 2020 Earnings Report, Transcript and Summary

Hello, and welcome to the BiomX Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Marina Wolfson, Vice President of Finance & Operations. Ms. Wolfson, please go ahead.

Good morning, everyone. And welcome to the BiomX second quarter 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@bionics.com. A replay of this call will be available on the Investor Section of our website. Before we begin, I would 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 unlocking the potential in phage therapies; successfully reaching near-term and other milestones; our development plans and timing of clinical studies; the wide range of indications in which phage therapies can be applied and the sufficiency of our existing cash, cash equivalents and short-term deposits to fund the company's current operating plan to mid 2022. 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 is noted earlier is on our website. Joining me today are Jonathan Solomon, our CEO; and Dr. Sailaja Puttagunta, our Chief Medical Officer. With that, I will turn the call to Jonathan.

Thanks Marina. And thank you all for joining our call today. Our goal at BiomX is to unlock the potential of phage therapy as a technology driven precision medicine approach, and we're making significant progress in this endeavor as evidence is appearing. The modulation of the microbiome can lead potentially transformative clinical outcomes. Bacteriophages are viruses that can be used to eradicate specific pathogenic bacteria without disrupting beneficial bacteria. Our position as a leading developer of phage therapy is the result of both of our ability to identify areas where this approach has distinct potential to meet unmet medical needs, as well as our deep expertise in microbiology, synthetic biology and computational biology, which we use to precisely customize combinations or cocktails of specific phage. Our phage cocktails contain multiple phage with complementary functions optimize through in vitro and in vivo testing. We are developing novel therapeutics using phage in a number of prescription indications with significant commercial potential, including inflammatory bowel disease and the rare disease, primary sclerosing cholangitis, and colorectal cancer. In addition, with our recent successful demonstration of the use of phage to reduce levels of Cutibacterium acnes or r C. acne bacteria. On the skin, we are developing phage therapy as a cosmetic application to improve the appearance of acne prone skin. Now I'd like to review the status of our development programs. We'll then focus on the detail of our near-term upcoming milestones. Our lead candidate, BX001 is a phase therapy cocktail targeting C. acne, which are bacteria implicated in the pathophysiology of acne vulgaris. In March, we announced that BX001 demonstrated a positive safety profile and statistically significant to reduce acne levels, which has allowed us to design the Phase 2 study. The Phase 2 study is designed to enroll a hundred individuals with mild to moderate acne and evaluate daily administration of BX001 over 12 weeks. Endpoints of the study will include safety and tolerability, reduction of C. acnes bacterial burden, and the evaluation of the effect on acne lesions on the face. We expect this study to begin in the first quarter of 2021 with results expected in second quarter of 2021. Our BX002 program, for the treatment of inflammatory bowel disease or IBD is on track to begin clinical development this quarter with the initial goal of demonstrating the ability to deliver viable phage to the lower gastrointestinal tract. We recently completed in-house GMP manufacturing of the phage to support this Phase 1a study. This is a significant milestone and the facility can now support multiple clinical trials simultaneously. We expect to report pharmacokinetics and safety data from this Phase 1a study by the end of 2020. This study will inform the design of the Phase 1b/2a study aimed at evaluating the efficacy of BX002 in reducing the target bacteria, Klebsiella pneumoniae, which has been shown to be pro-inflammatory in animal models. We continue to plan to initiate the Phase 1b/2a study in 2021. The phage cocktail for the treatment of the rare liver disease, primary sclerosing cholangitis, or PSC shared the same bacterial target as the IBD program. And it's also anticipated to be orally administered, which allows us to apply the results of the Phase 1a study in IBD that the design of the Phase 2 study [indiscernible]. We continue to work toward the initiation of Phase 2 study PSC in 2022. In colorectal cancer, we are exploring the potential for phage therapy to deliver therapeutic payloads to bacteria residing inside tumors. Our goal is to provide preclinical proof-of-concept results in the second quarter of 2021 for this application of our expertise in synthetic biology for phage cocktails. As you can see, that [indiscernible] attributes of phage therapy provide opportunities for development in a wide range of indications. Each of these programs relies on our strategic collection of key indications with compelling commercial potential where phage therapy could have the transformative impact. As we near the introduction of our second clinical program with the initiation of BX002 Phase 1a study, we would like to provide some additional detail on this study. I would now like to ask Dr. Puttagunta, Our Chief Medical Officer to provide additional information on the details on the study design.

Thanks, Jonathan. The BX002 Phase 1a study expected to be initiated this quarter will be conducted at a single site in the U.S. This is a randomized multiple dose study designed to enroll 18 adult healthy volunteers, 14 receiving BX002 and 4 receiving placebo over a 3-day period. The primary endpoint of this study is to demonstrate safety and tolerability of BX002, while a key secondary end point is to demonstrate delivery of viable phage to the lower gut. All subjects will be administered proton pump inhibitors to elevate the pH in the gastric chamber and condition the environment for delivery of BX002. Subjects will be evaluated for the detection of viable phage and stool over the course of the study and for an additional three days following dosing. Detection of viable phage in the stool would demonstrate that BX002 is reaching the lower gastrointestinal tract. In addition, monitoring the levels and timing of viable phage as it is excluded from the body would not only help inform the design of the following Phase 1b/2a study aimed at evaluating the efficacy of BX002 in reduction of target bacteria levels in the gut, but would also inform other future studies that involve oral administration of phage. This sets the foundation for oral delivery of phage and opens up multiple potential future indications with PSC being just one of them. We look forward to results from this study, which we expect to be highly informative as an initial step in the clinical development of BX002 and build upon the state of the art of knowledge in the field of phage therapy. With that I'll stop here and turn the call back to our CEO, Jonathan Solomon.

Thank you, Sailaja. I'd now like to ask Marina Wolfson, our Vice President of Finance & Operations to cover our financial results for the quarter.

Thanks, Jonathan. As a reminder, additional financial information is available in the press release we published earlier today, as well as our second quarter Form 10-Q, which will be filed with the SEC later today. Cash balance and short-term deposits as of June 30, 2020, were $70.6 million compared to $82.4 million at the end of 2019. Research and development expenses were $4.1 million in the second quarter of 2020 compared to $2.9 million for the same period of 2019. The increase was primarily due to the manufacturing of BX001 and BX002, the Company’s product candidates for acne-prone skin and IBD respectively for clinical trial purposes. General and administrative expenses were $2.3 million in the second quarter of 2020, compared to $1.2 million for the same period 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 $6.2 million in the second quarter of 2020 compared to $3.8 million for the same period of 2019. Net cash used in operating activities was $11.4 million for the six months ended June 30, 2020, compared to $5.9 million for the same period of 2019. Existing cash, cash equivalents and short-term deposits are expected to be sufficient to fund the company's current operating plan for mid 2022. Thank you. I will now turn the call back over to the operator for questions.

Our first question today is coming from Kristen Kluska from Cantor Fitzgerald. Your line is now live.

Hi, everyone. Thanks for taking my questions. So the first one here is I'm wondering since there's such a high overlap with patients with PSC who have IBD, whether or not you see any other co-morbidities with IBD where Klebsiella could also play a supporting role?

Hi, Kristen and good morning. Excellent question. I think currently these are the two main indications that we see. We do think that in future we will see additional overlap. So we're actively looking into that bacteria and many other bacteria in these different indications and think that there will be more indication with potential use. And I would say there's also, just the case of resistant Klebsiella, which appear in multiple infections, which could also be a relevant target to expand it to kind of third generation product.

Thank you. And then for the proof-of-principle study, thanks for providing some more color today. But wondering if this trial will include both Crohn's disease and ulcerative colitis patients, and whether you see any key differences with these two sub patient population?

So from the analysis we did so far, the levels of Klebsiella seem pretty close in both patient populations. So we think currently of enrolling both, but I think we'll make that decision closer to the clinical proof-of-principle study, the proof-of-concept. Sailaja, would you like to add anything to that?

Thanks, Jonathan. The proof-of-principle, we are still considering the study design and we know for sure that we will include target bacteria carriers, whether those are healthy volunteers or IBD patients. And as Jonathan said, as far as IBD patients go, the prevalence is about the same in both CD and UC and so no reason to exclude one or the other.

Great. Thank you. One big question -- one big picture, excuse me, question. It sounds like with the COVID-19 pandemic, there's been a recent appreciation towards the seriousness of antimicrobial resistance, especially since it's a growing problem. So first I just wanted to ask if you would agree with this statement? And then second, how do you envision that stage therapy and BiomX broadly speaking could play a role in addressing this?

So I think it's as you said, it's a big question that we've been debating and actively monitoring. There are some movements as evidenced by the formation of a $1 billion fund to support AMR project. So there's definitely movement. I think we're actively monitoring and we are excited as we see development there because phage is a natural tool or natural weapon to go after resistant bacteria. So there will be applications, many of them can be expansion of our current pipeline. Same as through your previous question of Klebsiella. Klebsiella is actually on the top list of the WHO organization as resistant organisms. And potential other bacteria, other indications, as we've made a lot of progress in establishing the pipeline and the platform, and we feel confident that we can pretty quickly expand and add additional indications.

Thank you. And then some of your peers in the microbiome space have recently announced some clinical data during the summer, so why [ph] not phage therapy specifically. I wanted to hear your view on these results and whether you think there's any read across?

So it is a very exciting time. I think we've spotted closely and are excited by the renewed interest across the Board in microbiome. I think when we look specifically at the excellent results that we've seen in C. diff. This is an indication that actually excessive use of antibiotics has led to one bacteria kind of taking over the whole microbiome and nothing can treat it except for microbiome modulation, right? So I think this is evidence that there are many cases where our traditional toolkit is not sufficient and we need something like adding bacteria or a phage to take out the bacteria to have a dramatic effect. And I think that bodes well for the industry and we're hoping to see more and more of these successes and join it right on what we have so far in acne and hopefully follow-up with exciting data on IBD.

Great. Thank you so much for taking my questions.

Always a pleasure.

Thank you. Our next question today is coming from Keay Nakae from Chardan Capital Markets. Your line is now live.

Yes. Thank you. So for BX001, I know you talked about on track for starting a Phase 2 in Q1. What are some of the key tasks you need to complete between now and then Jonathan?

Good morning, Keay. So I think mostly we're gearing up in terms of manufacturing and just being ready for the study and putting final touches through the protocol. Obviously, COVID-19 had an impact on the timelines and slots availability at the CRO. So we're gearing up and once the slot opens up after the delay they incurred, we'll be ready to go.

Okay. And then for BX002, again for the next study, I know it will be informed by the PK of the Phase 1a. But can you talk about both how many patients do you think might be in that next study?

Was that a question on patient -- number of patients per study?

Yes, yes.

Yes. I'll let Sailaja to go into details of our thinking on that protocol.

Thanks, Jonathan. Hi, Keay. So like you said, the design of the next study, the proof-of-principle study will be dependent on the pharmacokinetic study that we're conducting right now. But at this point with the information we have, we are considering enrolling 30 subjects into that study and it will be a placebo controlled, so 15 on active and 15 on placebo.

Okay. And again, I know little -- yet to be determined, but are you hopeful that you'll see from the PK data a single dose that stands out and that's what you would then go ahead and enroll for the 6 -- the 30 patients, or if you still don't have that kind of clarity, could that study include multiple dose cohorts?

It will definitely be multiple dose cohorts because we are confident about the safety. This is all a cocktail of wild type phages. So safety is not going to be a limitation. It will be a multiple dose study. And as I said on one of the previous questions, we are still considering whether that is going to be healthy volunteers or IBD patients. And that will determine the duration of therapy as we get more information.

Okay. And for the patients that would be carriers, what are you thinking about possible inclusion, exclusion criteria, especially as it pertains to perhaps other background [indiscernible]?

So if it is going to be target back to your carriers and healthy volunteers, obviously those will be the standard intrusion, exclusion criteria to identify healthy subjects. And if we do decide to look at target bacteria eradication in IBD patients, at this moment we don't see any reason to exclude any concomitant medications if that's the focus of your question, Keay, because phage can be an adjunctive therapy eventually through any of the existing IBD therapies.

Yes. That was my question. So thank you for addressing that specific point. That's all I have. Thank you.

Thanks, Keay.

Thank you. [Operator Instructions] We 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 thank you again for joining us today. We'd like to express our sincere appreciation for the support of our shareholders, our employees, and patients that participate in our studies as we work to realize the potential of phage therapy. Wish you all a safe and pleasant day. Thank you.

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