BiomX Inc. (PHGE) Q2 2023 Earnings Report, Transcript and Summary

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

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 include, 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 [ quicker ], 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, or the PIPE, 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 2 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 infection 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.

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today, and also and 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 3 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 3 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 6 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?

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 Instructions] Today's first question is coming from Joe Pantinginis (sic) [ Pantginis ] of H.C. Wainwright.

Jonathan and Marina. So first, on 004 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 -- require 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?

Joe, all excellent questions. So as you mentioned, basically enrollment and patient recruitments went a lot better than we expected. It's driven, I think, by a few factors. There's excitement from the Part 1 data. I think there's been very good execution from the team. So we literally opened centers and got more patients than we anticipated. And that sort of fed into -- it's not that anything has changed, no endpoints have changed, not -- everything is just going according to plan, just more patients. There is, as you've noted, a slight delay. It's driven -- there are more patients that are going through kind of the pipeline and [ have ] some operational issues, nothing major. At this point, we don't want to -- we're not giving guidance on the exact number of patients. Crossing our fingers, we want sort of increase the number. I think that helps us in getting more data and thinking about the next studies, right? So I think that would be fantastic. And again, excited. You remember all the difficulties we've had with recruiting Part 1 and the delay. This is going very, very well in Part 2. It's a very different world.

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 5 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?

Right. So we're definitely -- it's a tough and another good question, right? I think we've got the Fast Track designation. That's already a step in the right direction. There's more items that we'd want to pursue, such as orphan, breakthrough and hopefully, accelerated approval, right? So I think those are all conditioned on the data that we see in the discussion with the FDA. I think we've seen cases of fast approval, such as Insmed with the accelerated approval, and there is cases with smart design. So I think anything that gets us to a product faster, right, and serves the unmet need which we're seeing, is what we're looking for. And again, there is going to be a lot of meat on the bone for the discussion. I think the Fast Track is sort of a first signal of that, that the FDA acknowledges the huge unmet need, sort of like opening up more channels for discussion.

No, I appreciate that. And then if I could just ask and thank you for indulging me. The -- other than the obvious answer of resources, are there other potential avenues to be able to sort of reignite pipeline assets?

You're always welcome to ask more questions, right? I think we all -- as you know, right, we set up the company to be a platform company, and we are looking at a bunch of other projects, such as the Atopic and others that we're looking that are now kind of waiting for more resources. So I do think that if Part 2 looks as good as Part 1, right, then there's a second independent replication of a randomly controlled study with phase with placebo, that is showing effect, right? I think that would give us, and hopefully others, the confidence that we've got a good handle on this new modality, and I think that could open up multiple panels for discussions, right? Because there's more indications, there's more we can do. And with phage, you can move relatively quickly to the clinic with additional programs. But again, it requires definitely additional resources or collaborators.

[Operator Instructions] The next question is coming from Michael Higgins of Ladenburg Thalmann.

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?

Yes. So I mean we're completely blinded to the data. So we haven't seen anything or to make any decision. I think what we've seen is some of the sort of excitement among the sites -- and what we're seeing is more patients that have been referred by the centers and more patients kind of passing through screening than we originally anticipated. And the decision that we took that, the more the merrier, so long as it's only a slight delay. Because, as I mentioned before -- but Michael, I think as we talked before, right, we know this is a new modality and the more data we get, the better we're prepared, both for a discussion with the agency as well as design of the next clinical study.

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 6 months' safety data in hand before your end of Phase 2 meeting with the FDA?

It's a great question. I think the estimate is that, no. I think we know -- so far, we've felt very comfortable and the FDA has sort of held public workshops on phage, sort of acknowledging the safety of the modality. So I think it's sort of a soft follow-up in the Part 2. And hopefully, I think from what we see from the information that we had at day 28 should be sufficient to kind of get the discussion going.

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?

So we haven't looked the design -- I mean, as you recall, Part 1 was mostly a short safety study to kind of pave the way for the Part 2. So we don't have longer follow-ups. There's a bit more information that we're kind of wrapping up that hopefully we can present at a conference. But the heavy lifting, and I think most of the information will be at data [ to ] Part 2 for sure, and longer follow-ups.

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

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.

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.