Theriva Biologics, Inc. (TOVX) Q2 2023 Earnings Report, Transcript and Summary

Ladies and gentlemen, good morning, and welcome to the Theriva Biologics, Inc. 2023 Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Calabrese from LifeSci Advisors. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Theriva Biologics Second Quarter 2023 Investor Conference Call. Leading the call today will be Steven Shallcross, Chief Executive and Chief Financial Officer of Theriva Biologics; Dr. Manel Cascalló, General Director of Theriva Biologics, European subsidiary; and Dr. Vince Wacher, Head of Corporate and Product Development of Theriva Biologics are also on the call and will be available to answer questions during the Q&A session. Theriva Biologics issued a press release this morning, which provided operational highlights and included the financial results for the second quarter ending June 30, 2023. The press release can be found in the Investors section of the company website at www.therivabio.com, together with the quarterly report on Form 10-Q for the quarter ended June 30, 2023, which we plan to file today with the Securities and Exchange Commission, or SEC. In addition to the phone line, this call is being streamed live via webcast, which will be archived on the company website, www.therivabio.com for 90 days. During this call, certain forward-looking statements regarding Theriva Biologics and VCN Biosciences’ current expectations and projections about future events will be made. Generally, the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions. These statements are based upon current beliefs, expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in Theriva Biologics filings with the SEC, many of which are difficult to predict. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call, and Theriva Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events or otherwise, except as required by law. With that, I’d like to turn the call over to Steve. Steve?

Thanks, Chris. Good morning, and I appreciate everyone taking the time to join us today. We’re making tremendous progress with advancing our organization and addressing unmet needs for difficult-to-treat cancers. And in the second quarter of 2023, we continued to drive forward our oncology-focused portfolio. With our extended cash runway into the fourth quarter of 2024, we believe we’re well positioned to execute on our corporate objectives and remain on track to reach multiple value-enhancing milestones. Our primary efforts and resources are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate, VCN-01. As a reminder, VCN-01 is a systemically administered oncolytic adenovirus, designed to selectively replicate within the tumor, degrade the tumor matrix and increase tumor immunogenicity. We believe these multiple modes of action position VCN-01 for optimized tumor killing across several indications and in combination with different types of therapies. Our confidence in VCN-01 is built on a strong clinical foundation as VCN-01 has been administered to more than 90 patients so far in diverse indications that include pancreatic ductal adenocarcinoma, or PDAC; head and neck squamous cell carcinoma; colorectal cancer; ovarian cancer; and retinoblastoma. VCN-01 has been awarded orphan drug designation in the U.S. and Europe for the treatment of pancreatic cancer and in the U.S. for retinoblastoma, providing additional opportunities for regulatory engagement and, if approved, market exclusivity. The potential use of VCN-01 to enable and enhance the use of chemotherapy and immune checkpoint inhibitors and otherwise refractory solid tumors is a strategic focus for Theriva that may provide multiple opportunities in areas of high therapeutic needs. I’m pleased today to report recent highlights from our ongoing programs evaluating VCN-01 in different indications in combination with chemotherapy, immune checkpoint inhibitors and CAR T cells. First, enrollment is accelerating in VIRAGE, our multinational Phase IIb clinical trial evaluating intravenous VCN-01 in combination with standard of care chemotherapy, gemcitabine/nab-paclitaxel as a first-line therapy for patients with PDAC. The first patients at study sites in Spain have received their second doses of VCN-01 and U.S. sites have dosed their first patients in the trial. Repeated dosing of VCN-01, if effective, is expected to enable dosing in more standardized treatment cycles and potentially improve treatment outcomes. Second, survival data for patients treated with VCN-01 in combination with the immune checkpoint inhibitor durvalumab in patients with recurrent metastatic head and neck cancer will be presented at ESMO -- at the ESMO conference in October. Biochemical and mechanistic data presented last year demonstrated that VCN-01 proved tumor immunogenicity in previous immunotherapy refractory patients and in the upcoming presentation, we’ll discuss and highlight some of the first clinical outcomes data evaluating the feasibility of a VCN-01 checkpoint inhibitor combination. And third, the University of Pennsylvania continues to enroll and treat patients in their investigator-sponsored trial administering VCN-01 with huCART-meso cells in ovarian and pancreatic cancer patients. Initial data from this trial were presented at the Silicon Valley Conference in June, highlighting the feasibility of administering VCN-01 with huCART-meso cells to treat solid tumors. CAR T cell therapies have had limited efficacy against solid tumors to date, and we look forward to further data from the study to determine if VCN-01 can improve patient outcomes with these powerful immunotherapies. Looking ahead, we intend to meet with the FDA in the second half of 2023 to discuss the development pathway for VCN-01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. Further, as we continue to explore the potentially broad synergistic clinical benefit of VCN-01, we remain committed to pursuing new oncolytic virus candidates to leverage our novel Albumin Shield technology, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate repeated administration of oncolytic virus therapies. This may enable our pipeline of programs to be used in standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy. Additionally, as part of our oncology focused portfolio, in addition to exploring the potential clinical benefits of VCN-01 in different solid tumor indications, we continue to screen and enroll patients in the second cohort of the Phase Ib/IIa clinical trial of SYN-004, which we expect to complete in the first quarter of 2024. As a reminder, SYN-004 is designed to prevent potentially fatal adverse outcomes in patients who undergo allogeneic hematopoietic cell transplant, or HCT, to treat hematological cancers. I will now provide further detail on how these programs continue to position Theriva at the forefront of oncolytic virus development, starting with our lead program VCN-01. With a 5-year survival rate of only 3%, metastatic PDAC has one of the lowest survival rates among all cancers and is an indication that is ripe for innovation. It is well established that the PDAC tumor matrix is one of the key reasons for the overall poor therapeutic outcomes for these patients. We believe VCN-01 has the potential to address the urgent need for new treatment options for patients with PDAC by degrading the tumormatrix and increasing tumor access by standard of care chemotherapy. The initiation of dosing at U.S. sites in the VIRAGE trial and the completion of the second VCN-01 doses for the first patients in Spain are important accomplishments that add to the strong momentum for VCN-01 development. We are extremely encouraged by the reported safety profile following the second VCN dose, which was consistent with the safety profile observed for single doses of VCN-01 administered with standard of care chemotherapy in this and previous clinical trials. More broadly, the VIRAGE trial will enable us to determine the feasibility of repeated dosing of VCN-01, which could shift the paradigm to standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy and may lead to improved clinical outcomes for patients with PDAC and other solid tumors. The VIRAGE trial is expected to enroll 92 patients and currently has 4 sites open in the U.S. and 8 sites open in Spain. As a reminder, in both the control arm and treatment arm of our Phase IIb trial, patients will receive gemcitabine and nab-paclitaxel standard of care chemotherapy in 28-day cycles. In the treatment arm only, patients will also receive systemically administered VCN-01 seven days prior to the first and fourth cycles of gemcitabine and nab-paclitaxel treatment. Primary endpoints for the trial include overall survival and VCN safety and tolerability. Additional end points include progression-free survival, objective response rate and measures of biodistribution, VCN-01 replication and immune response. Since this is an open-label trial, progress will be monitored very closely and steps to accelerate the clinical program may be implemented if supported by emerging data. In addition to advancing the VIRAGE PDAC trial, we continue to work closely with key opinion leaders to refine our clinical strategy in retinoblastoma. We look forward to scheduling conversations with regulatory agencies to discuss the development pathway for VCN-01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. We believe intravitreal VCN-01 has the potential to treat vitreous seeds in children with retinoblastoma and we look forward to leveraging our orphan drug designation in this indication to facilitate protocol discussions with the FDA and other regulatory agencies. Since current clinical practice varies and there is no regulatory guidance specific to retinoblastoma drug development, we are working with our key opinion leaders in the U.S., Europe and Central and South America to develop a potential treatment options for this difficult-to-treat cancer. In parallel with company-sponsored studies, the potential utility of VCN-01 is being explored in a number of investigator-sponsored studies that are underway at leading oncology research institutions around the world. As previously noted, enrollment and treatment are ongoing at an investigator-sponsored study at the University of Pennsylvania, administering VCN-01 with UPenn’s huCART-meso cells. In this study, VCN-01 is administered 14 days prior to the dose of huCART-meso cells, and the patients are carefully followed for safety and clinical outcomes. At the recent Silicon Valley Conference in June, the University of Pennsylvania investigators presented initial data from 2 ovarian cancer patients and 1 pancreatic cancer patient who’d received the scheduled doses of VCN-01 and huCART-meso cells. The investigators noted that the combination was generally well tolerated, which highlights the feasibility of administering VCN-01 with huCART-meso cells and supports the continued evaluation of VCN-01 in combination with immunotherapy products to treat solid tumors. In a separate investigator-sponsored study, we are exploring the therapeutic potential of VCN-01 in combination with durvalumab for patients with recurrent metastatic head and neck cancer. We are encouraged by the data generated to date, highlighted by the acceptable safety profile seen with the sequential dosing of VCN-01 and durvalumab as well as the biological activity observed in head and neck cancer patients who failed multiple previous lines of therapy, including treatment with anti-PD-1 and PD-L1 agents. At the upcoming ESMO Congress in Madrid, Spain from October 20 through the 24 this year, investigators will present survival data from the ongoing Phase I study, which will provide the first clinical insights into the feasibility of combining VCN-01 with an immune checkpoint inhibitor. Furthermore, in collaboration with the University of Leeds, we are evaluating intravenous VCN-01 in patients with high-grade brain tumors who are scheduled for surgical resection. This Phase I trial is designed to evaluate the ability of VCN-01 to enter brain tumors following systemic administration. The leaky vasculature of many brain tumors may provide an excellent opportunity for systemically-administered VCN-01 to enter the tumor where it may replicate and initiate tumor cell killing, destroy tumor stroma and stimulate an antitumor immune response. Successful systemic delivery of VCN-01 to brain tumors could provide a less invasive intervention and potentially transform the way these cancers are treated. The Leeds investigators have initiated dosing and are exploring protocol refinements that may help expand enrollment. Additionally, enrollment in the Phase I clinical study in collaboration with Hospital Sant Joan de Déu in Barcelona, Spain has extended its 2 additional patients. The study is designed to evaluate the safety and tolerability of VCN-01 in patients with interocular retinoblastoma refractory to systemic interatrial or intravitreal chemotherapy or radiotherapy. We look forward to using these data in future discussions with regulatory agencies to refine the development pathway for VCN-01 in retinoblastoma. Turning to our ongoing Phase Ib/IIa clinical trial of SYN-004, or ribaxamase, to prevent acute graft-versus-host disease, or aGVHD, in patients undergoing allogeneic HCT treatment for hematological cancers. SYN-004 is intended to address key limitations of broad-spectrum antibiotics or IV beta-lactam antibiotics and potentially improve treatment outcomes with this important and widely used class of therapeutics. The Phase Ib/IIa study is designed to assess the feasibility of using SYN-004 in the specific patient population and to provide key information requested by the FDA regarding the safety and tolerability of SYN-004 in patients with impaired intestinal barrier function. As a reminder, the study consists of 3 sequential cohorts designed to compare different IV beta-lactam antibiotics to treat fever following conditioning therapy. In each cohort, 8 patients will receive SYN-004 and 4 will receive placebo. While the data remain blinded, interim analysis suggests that SYN-004 is well tolerated and was not observed in the blood samples of a majority of the evaluable patients. Our second cohort is underway and is designed to evaluate SYN-004 in combination with piperacillin and tazobactam. This cohort will provide important additional safety information, in particular, whether oral SYN-004 has the potential to alter IV antibiotic levels in this patient population. With our collaborators at Washington University, we continue to explore the potential of SYN-004 to reduce potentially fatal adverse events related to IV antibiotic used in HCT recipients, including aGVHD and overgrowth and infection by pathological organisms such as C. difficile and vancomycin-resistant enterococci. We are pleased with the progress of our clinical programs. As we continue to build on the growing data that underscores VCN-01’s differentiated mechanism of action, a key priority will be to identify new candidates to leverage the novel Albumin Shield technology and exciting additional technologies from our OV platform, which have tremendous potential for our pipeline. To this end, in May 2023, we appointed Dr. Ramon Alemany, PhD, to Senior Vice President of Discovery. Ramon is an internationally recognized expert in oncolytic adenoviruses and as Co-Founder of VCN Biosciences is uniquely suited to oversee Theriva’s discovery and development pipeline. Ramon will continue to serve as Chair of the Scientific Advisory Board and is Head of the Immunotherapy and Virotherapy Group at the ProCURE Program at the Catalan Institute of Oncology, or ICO, and the Oncobell Program of the Biomedical Research Institute of Bellvitge, or IDIBELL. We look forward to his guidance and strategic leadership in this new role. Additionally, we are grateful for the opportunity to strengthen our relationship with ICO and IDIBELL, the leading research institutions and long-term collaborators where our current OV technologies and products were invented and incubated. Overall, I’m confident that the company’s strong cash position and upcoming catalyst provide a solid foundation for execution and value creation. We remain focused and driving our clinical programs forward and exploring opportunities to expand our pipeline through our OV discovery platform. We remain on track to complete enrollment for the VIRAGE program by the first quarter of 2024. Meet with the FDA to discuss the clinical development and potential registration pathway for VCN-01 is an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma before the end of the year and complete the second cohort of our Phase Ib/IIa clinical study of SYN-004 for the prevention of acute graft-versus-host disease in bone marrow transplants in patients in the first quarter of 2024. Now I’d like to briefly turn to the financial results for the second quarter of June 30, 2023. General and administrative expenses increased to $2.7 million for the 3 months ended June 30, 2023, from $1.5 million for the 3 months ended June 30, 2022. This increase of 80% is primarily comprised of increased expense related to the fair value of contingent consideration adjustment of $0.9 million, along with higher audit fees, consulting fees, travel and VCN administrative expenses not included in the prior year, offset by a decrease in legal costs related to the VCN acquisition. The charge related to stock-based compensation expense was $106,000 for the 3 months ended June 30, 2023, compared to $86,000 for the 3 months ended June 30, 2022. Research and development expenses decreased to $3.1 million for the 3 months ended June 30, 2023, from approximately $3.5 million for the 3 months ended June 30, 2022. This decrease of 10% is primarily the result of lower expenses related to our Phase Ib/IIa clinical trail of SYN-004 and allogeneic HCT recipients, Phase Ia clinical trials of SYN-020 and decreased manufacturing expenses related to our Phase Ia clinical trial of SYN-020, offset by increased clinical trial expenses related to VCN-01. We anticipate research and development expenses to increase as we continue enrollment in our VIRAGE Phase II clinical trial of VCN-01 in PDAC and our ongoing Phase I trial in retinoblastoma, expand GMP manufacturing activities for VCN-01 and continue supporting our VCN-11 and other preclinical and discovery initiatives. The charge related to stock-based compensation expense was $40,000 for the 3 months ended June 30, 2023, compared to $27,000 for the 3 months ended June 30, 2022. Other income was $377,000 for the 3 months ended June 30, 2023, compared to other expense of $17,000 for the 3 months ended June 30, 2022. Other income for the 3 months ended June 30, 2023, is primarily comprised of interest income of $381,000 and an exchange loss of $4,000. Other income for the 3 months ended June 30, 2022, is primarily comprised of interest income of $26,000 and offset by an exchange loss of $9,000. Cash and cash equivalents totaled $34.2 million as of June 30, 2023, compared to $41.8 million as of December 31, 2022. We remain deeply committed to improving patient outcomes for these very, very hard-to-treat cancers. And before we conclude today’s call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to delivering on our mission. I’d also like to thank the entire Theriva team, our investors and the many people who’ve been supportive along the way, including our patients and their families. With that, we’re happy to take some questions.

[Operator Instructions] Our first question comes from the line of James Molloy with Alliance Global Partners.

I had a question on the ISTs that are running. We’ve got the pancreatic, the brain tumor [indiscernible] leads. When should we anticipate going down sort of 3 said brain tumor Phase I, the combo with CAR-T for ovarian, pancreatic and the Phase I with Imfinzi for head and neck? When should we anticipate, I guess, the interim looks for these and potentially, I know it’s hard to judge for an IST. Wouldn’t it be reasonable to think you might be looking at the top line data on these trials?

Okay. Thanks, Jim. Let me take the first stab at that. So going down the line, the UPenn study, which we’re incredibly excited about is ongoing and they have not given us a deadline on how long that trial will continue. We know they continue to enroll patients. As I mentioned, the Silicon Valley Conference, they presented some data. We believe that there’s some additional conferences that are coming up this fall that further data will be presented at. Again, it’s a function of how quickly they can attract the right patients to enroll in their study and ultimately the data that’s presented. But so far, we’re very encouraged by what we’re seeing in terms of the results that have been generated to date with UPenn. The retinoblastoma study, we’ve kept that open in Spain. And that’s important to continue to gather as much data as possible ahead of our meeting with regulatory authorities, including the FDA. I think the possibility of closing that trial perhaps as soon as the end of this year, early next year, that’s probably the time line. And once that trial is concluded, we’ll update everybody on the additional data that’s been generated. The Leed study, that one, again, we don’t have a firm deadline. We continue to have discussions with the investigators and we continue to look at ways to make enrollment easier for patients to participate. As you may or may not have heard, the U.K. health system has been feeling a little bit of pressure from budgetary issues and staffing. So the investigators continue to address that. And again, when we have an update on the timing, we’ll certainly bring everybody up to speed with that. And then finally, we’re really excited about the head and neck cancer trial. As we said in the presentation here today, the survival and efficacy data is going to be presented at the ESMO Conference in Madrid in October. It’s the 20th or the 24th. We don’t have a meeting date yet. And when the day, it’s going to be presented. But that’s going to be, I think, a real opportunity to highlight how VCN-01 to be used in combination with checkpoint inhibitors, particularly in patients that have failed previous rounds with checkpoint inhibitors and became refractory to those treatments. So that’s sort of all I have right now. And again, we’ll continue to update everybody as we have more firm deadlines. Is that helpful for you?

It is indeed. Yes. I had heard that U.K. is -- they’re cutting funding and sort of shutting down programs so they feel like they can’t get them completed in a reasonable amount of time as the University of Leeds IST in brain tumor, one of these specialties looking at that?

The study itself is funded. It’s the staffing issues at the hospitals where I think they’re feeling some pressure. But again, we’re in communication with the investigator, and we continue to look for ways to enhance the opportunity for patients to be enrolled in that trial.

Okay. And maybe on VIRAGE then just to clarify, the enrollment completed in first quarter ‘24, which is excellent, on track with expectations. In -- when would you -- is there an interim look to anticipate on that in the current year? And then I think in the fourth quarter ‘23, maybe I made that up. And then when would you anticipate top line data for the VIRAGE trial and sort of wrapping that trial and taking next steps?

So first and foremost, the primary endpoint of that trial is overall survival. And assuming that the trial is completely enrolled by the first quarter of next year, arguably, that data will start presenting itself some time probably in ‘25. Now having said that, we have multiple secondary endpoints that will help us evaluate before then whether or not the drug is performing as expected. And maybe as soon as the end of this year going into next year, we could possibly have a good indication of overall response. How we convey that information to the market is yet to be determined because depending on what those data say, we may be well positioned to first have a discussion with regulatory authorities before we make that data public. So although it could be an opportunity for us to have such a communication, more importantly, I think the fact that we could have an opportunity to go in front of regulatory authorities to figure out how we can expedite the clinical development of the asset would be equally important. So stay tuned, I guess, is the answer.

Okay. And as an open-label trial, I mean, obviously, you have the opportunity to release data as you deem and worthy of release. Correct?

Again, I would not suggest that we plan to release that data before we had a chance to analyze it and first have a discussion with regulatory authorities. I think that wouldn’t be fair to the trial, the participants and our ability to sort of chart the path forward and from a clinical development point of view.

And maybe last couple of questions. I apologize if I missed them on the call. On VCN-11, is the IND on track for third quarter this year?

Manel, you want to talk about VCN-11 and our other development initiatives? Dr. Manel Cascalló: Yes. I can do that probably. So we are working right now with basically the manufacturing part of VCN-11. We don’t have a formal deadline for this year for this product yet. In fact, our research and development team is working very actively with VCN-11 and also with different candidates right now. We have announced that the incorporation of Ramon Alemany during this year and that has been a real boost for all our discovery activities. So for VCN-11, yes, we are advancing that we are not yet in the phase of applying for IMPD formally. We are working on that, but we need still some work to do before that. And we are all developing, as said, new candidates that can be really, really promising. So I think that probably in the next month, we are going to have some additional things to show you. But that’s still a bit early.

Got it. Understood. I may have made up the IND there on my end. And then maybe last question. On SYN-004 and SYN-020, I know that we’ve long discussed potentially partnering these programs. How realistic is the opportunity to partner? I know that you’re still looking data from them to perhaps make the product look better. What is a realistic expectation as an outsider we should have thinking about a potential partnership for either the 020 or 004?

I think it’s realistic to certainly expect the potential partnership with either one of those assets. And as I’ve said on previous calls, although there’s folks that we’ve had discussions with, we continue to have discussions with until we have something committed and over the line, we’re not going to talk any further about that.

[Operator Instructions] As there are no further questions, I will now hand the conference over to Steven Shallcross for closing comments.

Thank you, Ryan. Thanks again to everyone for taking the time to join us today. We remain focused on driving our key programs, as we’ve talked about today. And we’ll continue to evaluate strategic opportunities that could, in fact, further drive shareholder value and long-term success. Once again, thanks again for joining us today, and we look forward to keeping you updated on our progress.

The conference of Theriva Biologics, Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.