BiomX Inc. (PHGE) Q3 2024 Earnings Report, Transcript and Summary

Greetings, and welcome to the BiomX Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Marina Wolfson, Chief Financial Officer. Thank you. You may begin.

Thank you, and welcome to the BiomX conference call to review the company’s third quarter 2024 financial results and provide an update on our business and programs. Later today, we will file the quarterly report on Form 10-Q with the Securities and Exchange Commission. In addition, the press release became available at 6:30 a.m. Eastern Time today and can be found on our website at biomx.com. A replay of this call will also be available on the Investors section of our website. As 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 are using forward-looking statements when we discuss on the conference call the sufficiency of the company’s cash, our pipeline, the design, recruitment, aim, expected timing and interim and final results of our preclinical and clinical trials, the potential benefits of our product candidates and the potential safety or efficacy of our product candidates BX004 and BX211. In addition, past and current 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 is noted earlier is on our website. Joining me on the call this morning is BiomX Chief Executive Officer, Jonathan Solomon, to whom I will now turn over the call.

Thank you, Marina. Good morning, everyone. Thank you for joining BiomX quarterly update. Throughout the last quarter, BiomX is focused on strategic execution and advancing our clinical pipeline. We are excited as we approach the landmark milestones in our diabetic foot osteomyelitis or DFO Phase 2 trial of BX211. In the past quarter, we completed patient enrollment for the trial and the readout for top line results through Week 13 is expected in the first quarter of 2025. We are grateful for the continued support behind the DFO program from the U.S. Defense Health Agency or DHA, which provided additional funding this past quarter bringing total non-dilutive funding received from the DHA towards this trial to $36.8 million to date. BX211 has the potential to dramatically transform treatment for patients suffering from DFO associated with Staphylococcus aureus. This is an area of high-unmet need. Each year there is a staggering number of approximately 160,000 lower limb amputation in diabetic patients in the U.S. alone, 85% of which are estimated to be caused by DFO according to the current literature and the U.S. Centers for Disease Control. DFO is characterized by intractable infections that have penetrated the bone in patients with diabetic foot ulcers. Antibiotic therapy is the current standard of care but fails to treat 30% to 40% of cases due to antibiotic resistance, accumulation of biofilm and poor blood supply, limiting the concentration of IV and oral antibiotics to the site of infection. We believe that a phage-based therapeutic approach has the potential to greatly improve treatment outcomes in DFO. Phage’s potential advantage stands in the ability to address challenges that antibiotics face such as breakdown of biofilm and targeting antibiotic-resistant bacteria. Reports in the scientific literature of compassionate use with phage therapy for the treatment of DFO associated with Staph aureus have shown that 11 of 12 cases resulted in positive outcomes of wound healing and avoiding amputations. Finding from these cases played an important role in the design of the ongoing Phase 2 study of BX211. As a reminder, the Phase 2 is a randomized double-blind, placebo-controlled multicenter study investigating the safety, tolerability and efficacy of BX211 in the standard of care antibiotics in subjects with DFO due to Staph aureus. Enrolled subjects are randomized at a 2:1 ratio to BX211 or placebo. BX211 or placebo are administered weekly by topical IV route at Week 1 and by the topical route only in each of Weeks 2-12. Over the 12-week treatment period, all subjects are expected to continue to be treated in accordance with standard of care, which will include antibiotic treatment as appropriate. The first readout of top line results is expected at Week 13 evaluating the healing of the wound associated with osteomyelitis. With respect to BX004, the company’s novel fixed phage cocktail for the treatment of serious chronic lung infection in cystic fibrosis or CF patients caused by Pseudomonas aeruginosa. We are continuing preparation towards the Phase 2b study. During the last quarter, the company has experienced manufacturing delays for BX004. The team has been working diligently to address these manufacturing jobs, which have been successfully resolved. However, as a result of these delays, we now expect to report top line results for BX004 Phase 2b study in the first half 2026. During the third quarter, we presented positive safety and efficacy results in BX004 Phase 1b/2a trial at the North American Cystic Fibrosis Conference and the European Respiratory Society’s Annual Meeting. Key highlights of the study presented including that three out of 21 patients which reflect 14.3% converted to sputum culture negative for Pseudomonas aeruginosa after 10 days of treatment, including two patients after only four days in the BX00 [ph] arm compared to 0% of the patients in the placebo arm. New data presented included that lung function as measured by forced expiratory volume in one second or FEV1 increased in subject receiving the cocktail compared to placebo. In the subgroup on continuous inhaled antibiotics, meaning same antibiotic with no cycling or alternating regimen on CFTR [ph] modulators and with lower lung functions meaning FEV1 lower than 70%. The scientific community positive feedback to the data presented at these conferences has only further strengthened our confidence about the future of this program and its potential to address the unmet medical need of cystic fibrosis patients. Overall, we are confident about the promising data already reported and are looking forward to the first quarter of 2025, which will mark the next significant milestone for the company, upon reporting top line results for BX211 Phase 2 trial in DFO. We believe our pipeline showcases the potential phage therapy to address a wide range of antibiotics and infections. I'll now pass you to Marina to review our third quarter financial results.

Thank you, Jonathan. As a reminder, the financial information for the company's third quarter 2024 is available in the press release that we issued earlier today, as well as in more detail in our form 10-Q which we will file later today. I will now walk you through the highlights of our third quarter financial results. Cash balance, short-term deposits and restricted cash as of September 30, 2024, were $24.7 million, compared to $30.7 million as of December 31, 2023. The decrease was primarily due to net cash used in operating activities and the repayment of our Hercules debt facility, which was partially offset by the Company's private placement financing of $50 million in March of 2024. We estimate that our cash, cash equivalents and short-term deposits are sufficient to fund our operations into the fourth quarter of 2025. Research and development expenses, net were $7.3 million for the third quarter of 2024, compared to $5.6 million for the same period in 2023. The increase was primarily due to the following factors: preparations for the Phase 2b trial of our CF product candidate, BX004; an increase in expenses relating to the clinical trial of our DFO product candidate, BX211; and an increase in rent and related expenses following the March acquisition of Adaptive Phage Therapeutics or APT. This increase was partly offset by higher grants received. General and administrative expenses were $3.2 million for the third quarter of 2024, compared to $2.2 million for the same period in 2023. The increase is primarily attributed to a full quarter consolidation of expenses following APT's March acquisition, incorporating the combined workforce, increased professional services, and additional subcontractor expenses. In the third quarter of 2024, we recognized goodwill impairment expenses of $801,000, resulting from the fair value assessment of goodwill related to the 2024 APT acquisition. No comparable goodwill impairment expenses were recorded in the same period of 2023. Net income was $9.6 million for the third quarter of 2024, compared to a net loss of $7.9 million for the same period in 2023. The increase primarily reflects non-cash income from the revaluation of warrants issued during the March 2024 financing. Net cash used in operating activities for the nine months ended September 30, 2024, was $30.7 million, compared to $15 million for the same period in 2023. In August of 2024, we implemented a 1 to 10 reverse stock split. This consolidated our outstanding shares without affecting the par value of the common stock nor the authorized number of shares of common stock or preferred stock. Now let's turn the call back over to Jonathan for his closing remarks. Jonathan?

Thanks Marina. In conclusion, the last quarter was comprised of key events including the finalization of patient enrollment for the BX211 Phase 2 trial of DFO associated with Staphylococcus aureus with a readout of top line results expected in the first quarter of 2025. For BX004 we had the opportunity to present our promising clinical data at key scientific conferences during the third quarter and revise our Phase 2 top line readout timeline to the first half of 2026. We are confident in our phage pipeline's ability to address serious chronic infection and look forward to presenting some potentially life changing data for DFO patients in the near future. Thank you all for your participation this morning.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Our first questions come from the line of Joseph Pantginis with H.C. Wainwright. Please proceed with your questions.

Hi, this is Sara on for Joe. Thanks for taking the question. I was just wondering regarding the manufacturing delay you mentioned for BX004, if there's any additional details or specifics you're able to provide on the delay and if whether this was just a one off extenuating circumstance or not? And thank you for taking the question.

Good morning and great question. So we do think and view it as a potentially one off. One of the challenges that we had in gearing up for the larger Phase 2b study is just larger volumes. So far, we've manufactured 10 liters [ph]. This is like moving up to 50 liters. So there were some challenges in just calibrating all the system and the phage for 50 liters once that was set kind of back on track. So I think that's where we feel very confident with the process that we have and the revised timeline.

Okay, that's helpful. Thank you.

Thank you. I'm showing no further questions at this time. I'd like to hand the floor back over to Jonathan Solomon for closing remarks.

So thank you all again for participating. Wish you all happy holidays and we look forward to updating you on the data in the upcoming DFO study. Thanks again.

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