BiomX Inc. (PHGE) Q2 2022 Earnings Report, Transcript and Summary

Good morning, and welcome to BiomX Second Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions] I would now like to turn the call over to Marina Wolfson, Chief Financial Officer of BiomX. Please proceed.

Thank you, and welcome to the BiomX Second Quarter 2022 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 sufficiency of our existing cash, cash equivalents and short-term deposits, the potential receipt of additional funds if milestones are met, the potential benefits of our product candidates and potential growth in shareholder value. In addition, past preclinical and clinical results as well as compassionate use are not indicative and did 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.

Thank you, Marina, and good morning, everyone. The second quarter of 2022 proved to be a highly productive period for our company. We dosed the first patients in our cystic fibrosis program, announced a second collaboration with Boehringer Ingelheim, published an important new research supportive of our inflammatory bowel disease program and technology platform and successfully completed a restructuring to further extend our cash runway. Let me first provide an update on our cystic fibrosis program. In June, we announced the dosing of the first 2 patients in the company's Phase Ib/IIa study evaluating BX004 with the treatment of chronic respiratory infections in patients with cystic fibrosis. This was clearly a very important milestone for the CF program, and I'm pleased to report that despite the challenges facing many companies with respect to patient recruitment, we continue to make steady progress with respect to enrollment in this study. As a reminder, BiomX is developing BX004 for the treatment of CF patients with chronic respiratory infections caused by Pseudomonas aeruginosa or PsA, a main contributor to morbidity and mortality in patients with CF. The Phase Ib/IIa study of BX004 is composed of 2 parts. Part 1 will evaluate the safety, pharmacokinetics and microbiologic/clinical activity of BX004 in 8 patients in a single ascending dose and multiple dose design. And provided that the pace of enrollment for the study will continue as expected, we anticipate the results from the first part of the study by the end of the third quarter of 2022. Part 2 of the study will evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2:1 ratio. And results from Part 2 are expected in the first quarter of 2023. As a reminder, the opportunity to address lung infections in CF remains substantial given both the size of the patient population and how few treatment options are currently available. Between the U.S. and EU alone, there are approximately 70,000 to 80,000 patients living with CF and is estimated that more than 60% of adults with CF are infected with this bacteria. PsA infections are the leading cause of loss of lung function in people with CF. And after patients has been infected with the PsA in their lungs, the infection is exceptionally difficult to fully eradicate. We are encouraged to see a growing body of clinical research and scientific publications that provide evidence supporting the use of phage therapy for the treatment of lung infections in CF. At the 2021 North American Cystic Fibrosis Conference, researchers from the Yale School of Medicine presented data on 6 patients with multidrug-resistant Pseudomonas aeruginosa were treated with inhaled phage twice daily for 7 to 10 days. The purpose of the study was to interrogate the mechanism by which phage suppressed P. aeruginosa [indiscernible] production and the effect on lung inflammation. Results showed that the phage therapy was safe and showed significant reduction in Pseudomonas aeruginosa titers. In addition, phage therapy also led to an improvement in lung function. As noted in our past calls, Yale University has been the forefront of developing phage-based treatment to help address multidrug-resistant lung infection in CF patients. And through its ongoing compassionate use study, valuable clinical evidence is being generated to support this treatment approach. In June 2022, researchers from UCSD and other academic institutions published a paper in the journal, Clinical Infectious Disease, entitled Stage Therapy of Mycobacterium Infections, compassionate use of phage in 20 patients with drug-resistant mycobacterial disease -- in the study, Mycobacterium [indiscernible] from 200 culture positive patients with symptomatic disease were screened with phage susceptibilities. One or more lytic phage were identified for 55 isolates. Phage therapy was then administered to 20 patients on a compassionate use basis, and patients were monitored for adverse reactions, clinical and microbiological responses, the emergence of phage resistance and phage neutralization in serum sputum and bronchoalveolar lavage fluid. Results from the trial showed favorable clinical or microbiological response in 11 patients, and no adverse reactions were attributed to therapy in any patients regardless of the pathogen phage administered or they're out of delivery. Awareness surrounding the BiomX CF program is also continuing to grow. On May 12, we hosted a KOL webinar to discuss the treatment landscape for CF patients with chronic lung infections and the potential of BX004 to address patients with chronic PsA infections. The webinar featured presentations from key opinion leaders, Dr. Dave Nichols and Dr. Saima Aslam, who discussed phage therapy, the current treatment landscape and the unmet medical need in CF patients with chronic PsA pulmonary infections. We then presented BX004 as a potential treatment solution, providing a review of the phage candidates preclinical activity and an overview of the ongoing clinical development plan. A recording of the webinar is accessible through the Investors section of our corporate website. We believe that enthusiasm appears to be building for exploring the potential phage therapy in treating CF patients struggling with multidrug-resistant bacterial infections. With so few treatment options available, we are very pleased to see a growing body of clinical evidence and published research that points towards the potential of phage therapy to play an important role in helping CF patients combat these persistent difficult-to-treat infections. Given a significant unmet medical need for these patients, BX004 program remains our clinical development priority at BiomX, and we look forward to presenting our initial clinical findings in the near future. Turning to our recent partner activity. We were also very pleased to announce the second collaboration with Boehringer Ingelheim during the quarter. Under the new collaboration agreement, BiomX will utilize its XMarker microbiome-based biomarker discovery platform to identify biomarkers for a pathogenic bacterium thought to be associated with IBD. Such biomarkers could help identify IBD patients that would benefit from the potential therapies targeted at the microbiome. As a reminder, we entered our first collaboration with Boehringer Ingelheim back in September 2020, which focuses on identifying biomarkers associated with patient phenotypes in IBD. Collaborative research is an integral part of the BiomX culture. And industry-based partnerships such as those with BI will likely generate important new insights to help direct our future research efforts in IBD. But we also seek to build strong relationship with academic and independent research institutes. And earlier this month, we're proud to announce the publication of a research paper in the renowned scientific journal, Cell, entitled targeted suppression of human IBD-associated gut microbiota commensals by phage consortia for the treatment of intestinal inflammation. The research was conducted across several organizations including scientists on BiomX, the Weizmann Institute of Science and [indiscernible] University School of Medicine. The paper presented positive results from a proof-of-concept assessment in preclinical model of IBD. More specifically, researchers demonstrated proof-of-concept assessment of Klebsiella pneumoniae targeting phage by generating an orally administered lytic 5-phage combination products specifically designed to target sensitive and resistant IBD-associated KP clade members through a distinct mechanism. The lytic 5-phage treatment enabled effectively KP suppression in the colitis-prone mice and drove attenuated inflammation and disease severity. Collaborative research with our academic partners can provide enviable insights and external scientific validation for a company's program. In April, we announced the publication of a paper in the journal, Bioinformatics. The research was conducted by scientists in BiomX and specifically relates to the development of an algorithm named Exodus that has enabled us to consistently generate hyper-accurate next-generation sequencing data for a single-mix analysis, thereby providing a more detailed genetic understanding of our phage product candidates. Importantly, Exodus is now being leveraged across our entire R&D platform. And because of the open source nature of the algorithm, other researchers external to BiomX can also use this algorithm to conduct analysis on various genome-related projects. Turning to Corporate news. We announced a restructuring during the second quarter which allowed us to further extend our cash runway through until at least mid-2024. Obviously, such decisions are never easy. But given the prevailing conditions within the capital markets, we must ensure that our company is well prepared with more than sufficient resources to navigate through this challenging period. I'd now like to turn the call over to Marina Wolfson, our Chief Financial Officer, to cover our financial results for the quarter.

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, 2022, cash balance and short-term deposits were $46.7 million compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities. Research and development expenses net were $4.6 million for the 3 months ended June 30, 2022, compared to $3.8 million for the same period in 2021. R&D expenses net were $9.5 million for the 6 months ended June 30, 2022, as well as for the 6 months ended June 30, 2021. A decrease in receipt of Israel Innovation Authority grants resulted in higher R&D expenses net offset by a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce. An additional offset is due to pauses in the development of BX003, the product candidate for the treatment of IBD and PSC, and our product candidate to treat colorectal cancer as well as the discontinuation of the product candidate for the treatment of acne BX001. General and administrative expenses were $2.4 million for the 3 months ended June 30, 2022, compared to $3.1 million for the same period in 2021. General and administrative expenses were $4.8 million for the 6 months ended June 30, 2022, compared to $5.6 million for the same period in 2021. The decrease was primarily due to a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce. In addition, the decrease is due to additional expenses incurred in 2021 that resulted from moving into new premises. Net cash used in operating activities was $16.4 million for the 6 months ended June 30, 2022, compared to $12.8 million for the same period in 2021. We estimate that existing cash, cash equivalents and short-term deposits will be sufficient to fund the company's current operating plan at least through mid-2024. And now I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

Thank you, Marina. With a continual threat of emerging multidrug-resistant pathogens, we are encouraged to see more evidence that phage could be an important therapy for treating lung infections in cystic fibrosis. Patients clearly have few treatment options, and new therapies are desperately needed. We believe that our BX004 program addresses this unmet medical need within CF, and we're advancing this program with our existing financial resources to ensure we reach the critical milestones to help drive shareholder value. While the last few months have been challenging for the biotech sector, we know that generating solid clinical data is the key to rebuilding investor enthusiasm. And we look forward to sharing our initial clinical results for BX004 in the near future. Operator?

[Operator Instructions] Our first question is from Joe Pantginis with H.C. Wainwright.

Jonathan, I have a logistical question and then a little bit of getting into the weeds question. So first, I guess, how is your current supply and manufacturing efficiencies? And how are your, say, more near-term plans for any expansion?

So Joe, it was a pleasure. Logistics is critical, and I think we, almost 2 years ago, took a decision that we have in-house manufacturing because we want to control the supply chain from beginning to end, then phage being a unique modality, I think that proved out to be a good decision. So everything is planned for, and we have capacity that can support all of our Phase II needs in the programs we anticipate. Obviously, the head count reduction did have an effect on the head count in the CMC organization. We still have what we need to support the CF program, and we do have the budget and resources to support the [ atopic. ] But we can't do it simultaneously, and that's why in the [ atopic, ] we're still kind of thinking about what kind of guidance we'll give on the timelines of that study.

That's very helpful. And then I guess sort of my weeds question is, when you look at CF and additional indications for phage, every micro environment is very different. CF is obviously very tough, the lung biofilms and beyond. And obviously, the Yale data continue to steer the ship of overall phage in the right direction. So I guess -- especially from a clinical data standpoint. So I guess, are there any important potential differentiators or similarities to the Yale data with regard to formulation and delivery of your cocktail?

So the data that we have on the Yale study is obviously very limited. I will say that the basic approach that we're using is always a cocktail versus I think many of these cases which are a single phage. So what we're trying to do is have a cocktail which is broad, and hence, we have a few phage kind of hitting the bacteria simultaneously. So I think that could be a potential advantage. And we also make sure that we have antibiofilm capabilities as well. Because we do know that biofilm play an important role in the indication. There are biofilm present in the lungs, and specifically, we make sure that our phage cocktail has an element that has antibiofilm. I think that should provide good advantages. But I share sort of your announcement and I think the excitement with the indication because I think one of the key challenges that we know with phage being a large molecule getting to the site of action, right? We've seen that in acne. And in CF, I think data that came out of Yale and others is actually supporting the fact that phage and nebulized phage specifically can get to the site of action. We validated at least in preclinical models that we have it as well in terms of producing nebulized phage, making sure we understand the droplet size, whether phage is viable in the droplet, sort of did all that optimization. So I think that should be extremely encouraging.

Our next question is from Kristen Kluska with Cantor Fitzgerald.

The first is I know we spoke in the past about patterns of infections now that there are a few commercial years of experience with Trikafta being on the market. But could you give us a sense of any predictability factors that have been observed for when these infections might occur? And you talked a little bit about the fact that some of them just keep coming back no matter what the intervention and then also factors around different levels of severity.

Good. And I think it's a really important question. There isn't that much data because the use of Trikafta is sort of rather new. There is a few papers and anecdotal data that shows that in the first few years, there is a drop of levels of Pseudomonas, and then it kind of picks up again. I think we're constantly talking to the KOLs and physicians. And I think from the reach-out that we're seeing from patients, and what we're hearing from physicians, there probably isn't a dramatic change on the landscape that we've seen to date. Could have delayed by a few years, but we do see levels which are relatively high and do see patients kind of reaching out to get a treatment. But I would just put it with a disclaimer. It's early, probably it's delaying the infections, but they do come back from what we're seeing today.

And maybe a big picture question. Would love to get some of your early thoughts around the FDA panel in September that's going to take place for another microbiome company. I recognize it's not apples-to-apples here and you have a different modality with phage, but how do you think listening in and understanding some of these dialogues and feedback for late-stage programs could help you progress your pipeline and understanding some of the criteria that the agency is focused on?

So I think there's a lot of emphasis on CMC, and I think that's been a dialogue. The FDA also had like separate workshops on phage which kind of elaborate. So I think there's openness in terms of how do you get a drug approved in terms of the CMC aspects, which look good. And I think there's a good handle, and there was a lot of analogy between microbiome as well as other fermented products, right? So I think the field is sort of kind of getting more comfortable in seeing the large CDMOs kind of playing a part in it as well. So I think that aspect of the whole CMC is maturing. What I'm hoping in the case of specifically of phage, there is a discussion on it in general the microbiome, right? Can you have any surrogate endpoints, like if you're going after a specific pathogen, C. diff, right? Or some other infection, can a reduction of the pathogen be some sort of surrogate for approval? And I think with phage it's even at least as or even more relevant. There's some evidence that they will talk about, but I still don't think there -- we're there yet. So crossing our fingers because I think as one product will be approved in surrogate endpoint will make everyone's kind of path to approval much faster. So let's hope it goes there, but again, too early to tell.

Got it. And last question. I know you're guiding to potentially have data [ late ] 3Q. And I know the NACFC Conference is taking place in November. So do you expect that phage, whether it's from you, from Yale or others, could be a potential topic of at this conference?

I hope so. It's definitely very exciting, I think sort of the data coming out of Yale. The data that came to UCSD, [ spectacular ] publication, right, with 20 patients, out of them 14 with CF with [ microbacterium ]. And it kind of created quite a lot of time in the phage field. So I think we're seeing the whole field maturing, right? We hope it will play a big role. And just by the fact that we're seeing more interest from the KOLs and from patients, right? As well as some movies that have been out there and books, kind of hoping that the field is experiencing a [indiscernible].

Our next question is from Michael Higgins with Ladenburg Thalmann.

Looking forward to seeing 004 results in CF next month. But I have a question on -- a couple of questions on BX005, if I could. As you noted in the press release, company plans to support a range of activities to continue to move this growth going forward. More detailed update later this year. Hoping you can share with us on the enrollment of the patients, if you consider information by strains in enrolling patients and [ any minimum EZ score ] that you can share with us?

Michael, so with the topic, we haven't started the study yet. The IND is approved. It kind of goes to Joe's question earlier. Currently, because of the restructuring, we don't want to sort of burden the system with the 2 projects simultaneously, and CF is our priority. So I think we're still kind of gearing up for what we're -- when we're going to do the IND study talking with our partners at Maruho. What we've seen actually with the cocktail is a very broad host range. So it's less about the strength of staff in these patients, but we want to make sure and I think that's just takeaway something we want to sort of embed in our current and future clinical programs is that we want to make sure that there's a high enough [indiscernible]. So our thinking is that we sample patients before. We want to make sure that they do have high levels of bacteria. We do make sure that the -- their strains are susceptible to our phage cocktail, and that kind of gives us the green light to move forward. In terms of design what we're thinking of, but again to be finalized, is actually more of the moderate patient to even severe. And that's because -- the data that we've seen from the UCSD group that went with an approach that reduced Staph aureus that's where they saw both a dramatic reduction in the target -- bacteria as well as the clinical improvement. So I think these are the patient population that's probably more interesting. But again, once we get ready, we'll probably provide more update.

Appreciate that. And then I turn the view [indiscernible] The Cell paper is really interesting. Page 16 does mention other phages possibly being added [ ex Kp. ] Any plans to broaden 003?

So it's a project we really like. I think as we prioritize, 003 is currently not in the horizon of the next 12-plus months. We do have -- I mean we've worked on a broader cocktail to begin with, to your point, right? So a broader cocktail that will be ready. And that's driven also by the fact that there's an overlap between basically IBD and what was our BX002 as well as the PSC, right, which is BX003. That's already a broader cocktail that we're thinking of. And ideally, what we want to enter is the cost that could be relevant both indications of strains are derived from both sets of patients.

And just one follow-up to that. I was reading some interesting comments from Boehringer SVP speaking of the microbiome in psoriasis and using the microbiome as a bit of a screener for the psoriasis [indiscernible] patients who are enrolling with another program. Is that really the plan here, right? With your patients to enroll in future years, to use this more so, use your tech more so as a screener as well as treatment?

So it's an excellent point. I think you can use it kind of in several situations, right? Our collaboration with Boehringer Ingelheim is actually about identifying biomarker and using it potentially with one of their therapeutic modalities. So here, you have a classic case of the biomarker exactly as you described, right, is a way of identifying those patients that would potentially enroll, that would have a better response and identify patients that don't respond at all. So I think that's one path that we can use the microbiome. And there's a lot of evidence on multiple indications about the role of the microbiome's effect on clinical outcome. And to your point, you could use the same approach to identify new targets as well as validate some of our existing targets, right? Like what the other would be one that comes to mind. But there are others, right? There's more and more research that comes out that will probably stratify different patient groups within indication, we want to pursue hopefully with different set phage.

[Operator Instructions] Our next question is from Keay Nakae with Chardan.

Can you hear me?

Yes, we can.

Jonathan, for BX004, how many sites do you currently have up and running?

We don't disclose publicly the number of sites. I mean it's not a very large study. As you know, we're going for 8 patients. But we do have a few sites up and running. And sort of we were hoping to use these sites and other sort of rolling into the part 2 to kind of make the transition seamless as we can. But definitely multisite study that we're pursuing, right? Sort of thinking already about the Part 2.

Right. So I guess as we got to Part 2 with more patients, I was trying to understand how many sites you would have up and running to enroll Part 2.

What if you -- we're very honored to have the support of the CF Foundation and their good development network. So we're trying to go as broad as we can, right? The clock is ticking. We want to move as quickly as we can. So we're sort of balancing operationally what we can do and making sure the studies are well controlled and well managed. But it is a broad study. [indiscernible] indication. But again, it's a very unique patient population that is very connected and communicated. And again, the CF Foundation plays a pivotal role in sort of making sure everything is tied together. So that's been extremely helpful in a multiple site setup.

We have reached the end of our question-and-answer session. I would like to turn the call back over to Jonathan for closing comments.

Thank you. I just want to thank all of you for joining us this morning. We look forward to providing you with future updates on our clinical programs through the rest of the year. Have a wonderful day. And please reach out to us if you have any additional questions. Thanks again.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.