BiomX Inc. (PHGE) Q4 2022 Earnings Report, Transcript and Summary

Good morning, and welcome to the BiomX Full Year 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 go ahead.

Thank you, and welcome to the BiomX 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 to close on the second part of the PIPE transaction and the potential safety, efficacy and other benefits of our product candidates. 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.

Thank you, Marina, and good morning, everyone. 2023 is shaping up to be a very exciting year for our company. Our cystic fibrosis program with lead candidate, BX004, continues to gain momentum based on the positive results announced back in late February in Part 1 of our ongoing Phase Ib/IIa study. Without question, this was a watershed moment for our company and for our technology. As these results demonstrated an optimized phage cost of product developed utilizing on both platforms, such as BX004 could potentially reduce the presence of life-threatening bacteria in the lungs of CF patients after a short period of treatment. The Part 1 results also represented the first placebo-controlled study [ evaluating ] a cocktail-based phage product to show notable reductions in bacterial burden in cystic fibrosis patients. As a reminder, BX004 is a phage cocktail that has been designed to combat chronic pulmonary infections caused by Pseudomonas Aeruginosa or PsA, which is a main contributor to morbidity and mortality in CF patients. Despite the availability of CFTR directed therapies, CF patients continue to suffer from intractable, persistent infections, such as those caused by P. aeruginosa. New treatment options are, therefore, needed to address the significant unmet need that impacts thousands of CF patients each year. Our ongoing Phase Ib/IIa trial is comprised of 2 parts. Part 1 evaluated the safety, pharmacokinetics and microbiologic activity of BX004 in 9 CF patients in a single ascending dose and multiple dose design. On February 22, we reported these exciting results and also held a conference call with investors to review the data. For today's call, I plan on providing a high-level overview of the overall study results. However, a more detailed presentation of our data can be accessed on the BiomX website under our Investor Relations, News Events section. Part 2 of the trial will evaluate the safety and efficacy of BX004 in a larger group of patients with 16 patients receiving nebulized BX 004 and 8 patients receiving placebo in a 2:1 randomization. Importantly, treatment duration will be extended over a 10-day period with twice-daily administration of the high dose versus the 7-day period of escalating doses in Part 1. We have already started dosing patients in Part 2 of the study, and we remain on track to report results in the third quarter of this year. I'd now like to briefly recap the exciting results in Part 1 of our CF study. The primary goal of Part 1 was to assess the safety and tolerability of BX004. Phage therapies are generally considered safe and that proved to be the case with BX004 maintaining an excellent safety profile throughout the course of treatment. However, we are also highly encouraged to see preliminary evidence of efficacy in patients treated with BX004 despite the small sample size and short duration of treatment during this first part of the trial. At Day 15, patients treated with BX004 had a mean reduction in PsA colony-forming units or CFUs compared to baseline of 1.42 log, while the mean reduction in PsA CFUs was only 0.28 log for placebo-treated patients. As noted on our conference call last month, we were surprised by the magnitude of reduction in bacterial load, and these results exceeded our internal expectations, particularly considering the shorter course of treatment of just 7 days of escalating dose. Not surprising, BX004 maintained an excellent safety and tolerability profile with no treatment-related adverse effect observed in the study. Phage-based treatment are generally regarded as safe and results on the study serve to reinforce this view, providing us with additional comfort that BX004 can be administered at a higher dose and over a longer treatment period as specified in Part 2 of the CF study. Phage were detectable in several BX004 treated patients up to Day 15 or 1 week after the end of the 7-day treatment period, and there's no emerging resistance to BX004 during or after treatment. As expected, there was no change in lung function as measured by FEV1, which we attribute to the shorter course of therapy specified in Part 1 of the study. In summary, we believe BX004 is emerging as one of the most promising development phage therapies for treatment of chronic PsA infections in patients with cystic fibrosis. In canvasing both the development phage landscape and the compassionate use program, BX004 appears to be highly competitive with respect to a number of key product attributes, including safety, tolerability and reducing pathogenic bacteria. In addition, we also believe BX004 to be further differentiated from its potential to address resistant strain of PsA given its unique design to confer [indiscernible] based coverage across pathogenic strains. I'd now like to turn the call over to Marina to review our financial results for the full year 2022.

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. I will walk you through some of our brief highlights. As of December 31, 2022, cash balance and short-term deposits were $34.3 million compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities. R&D expenses net were $16.2 million, down from $22.7 million for the previous year, mainly because of reduced salaries, stock-based compensation and workforce reduction resulting from corporate restructuring. Additionally, the decrease was a result of discontinuing pausing and delaying the development of several programs. General and administrative expenses were $9.5 million for 2022 compared to $11.3 million for the prior year. The decrease was primarily due to a decrease in salaries and related expenses and stock-based compensation due to a reduction in workforce as well as a decrease in recruitment and employee-related expenses, all resulting from corporate restructuring. Net loss for 2022 was $28.3 million compared to $36.2 million for the prior year. Net cash used in operating activities for 2022 was $29.1 million compared to $27.6 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 through at least middle of 2024. And now I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

Thank you, Marina. As I mentioned at the beginning of today's call, I believe BiomX is [ poised ] for an outstanding 2023. Despite continued challenges in the capital markets, we are well positioned based on potentially best-in-class BX004 product candidates in CF, a strong balance sheet and support from our current investors, including the Cystic Fibrosis Foundation. Immediately following the release of Part 1 data, BiomX was also able to raise additional capital from our existing shareholders. We very much value and appreciate the support as these additional funds reflect the growing optimism surrounding our BX004 program. In our view, funding remains viable for those companies with product candidates that can demonstrate robust clinical data leading to best-in-class potential. We believe BX004 clearly fits this profile. We couldn't be more pleased with the progress we continue to make and bring this potentially life-saving therapy to CF patients. And we look forward to reporting our Part 2 results in the third quarter of this year. With that, Marina and I would be happy to take any of your questions. Operator?

[Operator Instructions] Our first question has come from the line of Joe Pantginis with H.C. Wainwright.

Jonathan and Marina, so first, a quick question on the Part 1 data. Just curious, as we're moving into Part 2, will we be receiving any longer-term follow-up from the Part 1 patients?

Joe, there is a bit more data that will come out in Part 1, analyzing some of the samples and the follow-up. We are planning to present at a conference or a paper. So once we have confirmation on that, we'll give you guidance on it.

Got it. Got it. And then I guess, a little bit of nuance and impact of Part 1 on the Part 2 data -- I'm sorry, the Part 2 section of the study. So first, following the announcement of these data, is there any feedback you can provide as to impact on, say, Part 2 enrollment kinetics and as well as any additional interest by new physicians for Part 2? And do any of the physicians require any additional training or education to conduct Part 2 relative to Part 1?

Joe, it's an excellent question. I mean there is quite a lot of excitement sharing it with the PIs, our supporters of the CF Foundation with the [ state ]. It's quite dramatic. As we said, right, we weren't expecting this level of bacterial reduction and the quality of the data that we've seen in Part 1, which was basically an initial safety study. So it definitely took us by surprise, a pleasant surprise that is. It is helping with communication. I think there's a lot more PIs that are excited, patients as well. We want to be conservative, and I think we're keeping the same guidance that we provided in the past, but things are definitely on track, a lot more incoming, and also bear in mind that the Part 2 is sort of not as intense on the patients. They're not required to come in every day. So there's definitely, we get the sense that there's more comfort, there's more excitement with participating in the Part 2.

That's really helpful. And then maybe just one last checkbox question, if you don't mind, just making sure about the manufacturing status for BX004 for not only Part 2, but steps beyond?

Yes. So it's a question we spent some time talking, right, and I think it's still kind of paying dividends, the decision we took 2 years to kind of put everything in-house. So it's looking good. It's all under our control and pretty straightforward. The cocktail sort of was optimized among other parameters for relative ease of manufacturing. So we do feel very confident with supplies through the Part 2, and now kind of starting to think about pivotal studies and requirements, yes, the GMP requirement for a pivotal study. So that's some of the work that we're now starting to do.

[Operator Instructions] Our next question has come from the line of Michael Higgins with Ladenburg Thalmann.

This is [ Sahana ] on behalf of Michael. Congrats on the quarter. We have 2 questions. The first one relates to Part 2, I think, Jonathan, you had mentioned when the Part 1 results came that they could provide some like could generate some changes to Part 2. So we were just wondering if any changes were made yet? And the second question is what is the guidance on BX003?

Sure. So pleasure, and good morning. I think as you noted, the data in Part 1 is much more dramatic than we anticipated in an initial study. So we are seeing the effect kind of earlier and a greater magnitude than one would expect. We're currently proceeding with Part 2 as planned. The team is thinking consulting obviously with the partner, the CF Foundation KOLs to think when there's any additions, whether there's anything addition we can learn in Part 2. And I think once that's formal, if there's any updates, we'll provide them, but nothing so far. And then to your question about BX003, as we've guided, I think we want to be very conservative. I think we've seen kind of the market still not in a good shape. And so we want to kind of make sure we're putting all the efforts into the CF program and make sure we got a good handle on the Part 2 and kind of thinking already about pivotal study. After that, once that's solidified, we see where the market is, I think then we'll provide guidance on BX003.

There are no further questions at this time. I would now like to hand the call back over to Jonathan Solomon for any closing remarks.

Sure. So everyone, thank you again for joining us this morning. We look forward to providing you future updates on our clinical program this year. Have a wonderful day, and please feel free to reach out to us with any additional questions. Thanks again.

This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.