Armata Pharmaceuticals, Inc.
Q1 2017 Earnings Call Transcript

Published: 15 May 2017

[Operator:]

Welcome to the AmpliPhi Biosciences Business Highlights Conference Call. At this time, participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. [Operator Instructions]. As a reminder, this call is being recorded today, May 15, 2017. I'd now like turn the call over to Matt Dansey. Please go ahead.

[Matt Dansey:]

Thank you. Good afternoon and welcome to our conference call. This is Matt Dansey, Business Development Manager at AmpliPhi Biosciences. Joining me on today's call are AmpliPhi's Chief Executive Officer, Scott Salka; Chief Operating Officer, Igor Bilinsky; and Chief Financial Officer, Steve Martin. During today's call, we will be making statements related to our business that may be considered forward-looking. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based upon AmpliPhi's current expectations and involve a number of risks and uncertainties including the risks and uncertainties described in AmpliPhi's Form 10-Q for the quarter ended March 31, 2017, as filed with the Securities and Exchange Commission. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Furthermore, the information discussed by AmpliPhi in this call speaks only as of today, May 15, 2017. Except as required by law, AmpliPhi disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Now, I'd like to turn the call over to our CEO, Scott Salka. Scott?

[Scott Salka:]

Thanks Matt. Good afternoon everyone and thank you for joining us. This is truly an exciting time at AmpliPhi, as we roll out a new strategic emphasis, designed to offer hope to the hundreds of thousands of patients infected each year by multi-drug resistant bacteria. By taking full advantage of the unique features of our proprietary bacteria-based technology, we believe we can rapidly produce personalized precision therapies to treat under existing compassionate-use guidelines, serious life-threatening infections in patients with limited treatment options. Our objective is to provide precision phage therapies to at least 10 patients in the second half of this year, and to use data from those cases to further validate the clinical utility of our approach and to support discussions with FDA on to finding a potential path to approval for personalized precision phage therapies. A key accomplishment in advancing this approach was the closing-in of an underwritten public offering last week, with total net proceed to AmpliPhi of about $9.1 million. We believe our current cash balances will be sufficient to fund our planned operations into mid-2018. I'd like to extend a warm welcome to our new shareholders and a thank you to existing shareholders that participated in our recent offering. There are few public health issues of potentially greater importance than antibiotic resistance, and the problem is only expected to worsen in the coming years, unless solutions are found. The 2016 review on antimicrobial resistance by the O'Neil Commission, concluded that failure to resolve the crisis of bacterial resistance, could result in bacterial infection eclipsing cancer as a leading cause of death. At AmpliPhi, we are developing bacteria phage based therapies that have the potential to address this looming crisis. Bacteria phages are the natural predators of bacteria, and were historically used to treat bacterial infections from shortly after the discovery in 1917, until the era of modern antibiotic drugs began in the 1940s. As a consequence of mounting bacterial resistance to conventional antibiotics and enabled by advances in biologics manufacturing, purification and DNA sequencing technologies, we are now experiencing greater acceptance amongst the medical community, and within the public policy arena of the potential for bacteria phage as an important new therapeutic modality. Bacteria phage technology is uniquely positioned, and that it can infect and kill multi-drug resistant infections and maybe synergistic with antibiotics. Furthermore, because phages replicate rapidly in their bacterial hosts, we believe we can manufacture customized phage therapies in real-time to treat patients with serious infections. Importantly, we believe our new strategy will clear a rapid and cost effective path, for demonstrating clinical validation of phage therapy. I'd like to share some of the factors that support our new strategic emphasis. First, is the positive feedback we have received from the FDA. The FDA has acknowledged that phage therapy is an exciting approach to the treatment of multi-drug resistant organisms and the [indiscernible] commitment to addressing the unique regulatory challenges that might arise during product development. Additionally, the FDA indicated that compassionate used cases may provide the safety and effect of this data that could inform future discussions of clinical development, and ultimately, the regulatory pathway to approval. Importantly, the FDA is open to further discussions with us. Secondly, AmpliPhi has been involved in two cases, where bacteria phage technology was successfully deployed as a personalized medicine under compassionate use guidelines. Last March, we collaborated with several academic institutions and the U.S. Navy laboratory to produce a personalized bacteria phage therapy that successfully treated a critically ill comatose patient, with a multi-drug resistant Acinetobacter baumannii infection. Shortly after phage therapy was initiated, the patient emerged from the coma and continued to improve under an ongoing combination of phage and antibiotic therapies, until the infection was cleared. To date, the infection has not returned. In another example, our wholly-owned subsidiary Special Phage Services was instrumental in developing a personalized phage therapy, that eliminated an antibiotic resistant Pseudomonas infection in the bladder of a female cancer patient. 10 days of phage therapy, induced a resensitization to meropenem and cleared the infection. The patient experienced a durable, microbiological cure. The results of this case were published in a manuscript in the journal of medical microbiology in 2011. Third, we reported favorable safety results from two Phase 1 trials with our investigational drug product, AB-SA01, which targets Staph aureus infections, including MRSA. In one of the trials, we dose patients suffering from chronic rhinosinusitis and infected by Staph aureus and saw preliminary signals of efficacy. And finally, we have strong patent protection that covers sequential administration of phage followed by antibiotics. Now, I'd like to turn the call over to Igor Bilinsky, to talk to our personalized precision therapy strategy in greater detail. Igor?

[Igor Bilinsky:]

Thank you, Scott. There are three development stops to a personalized therapy strategy. The first, is to provide personalized therapies for multi-drug resistant infections under compassionate use guidelines and buildup an exploratory development clinical dataset. The second, is to bring this new clinical data to the regulatory authorities and work together to define the path to approval and the additional clinical studies required. And the third step, is to execute on this additional clinical studies required for registration and to seek market approval. Let me comment on each of these three steps, focusing on the first one. The first step in our strategy, is to make personalized phage therapies available in Australia under the Special Access Scheme regulations that are established by Australia's Therapeutics Goods Administration. The Special Access Scheme enables access to unapproved therapies for seriously ill patients. It is conceptually similar to the emergency IND and extended access mechanisms in the U.S. We plan to collaborate with leading hospitals and key opinion leaders in Australia, to assist us in identifying eligible patients, those who suffer from antibiotic resistant infections and who have no other satisfactory treatment options available to them. The reasons for studying in Australia are several. We believe there is a strong interest in phage therapy for antibiotic resistant infections from leading hospitals and infectious disease physicians in that country. Also, the regulatory environment for treating patients under compassionate use guidelines is favorable, with physicians able to administer treatment without prior regulatory approval in emergency situations. Those that fall under the category A of the Special Access Scheme. AmpliPhi has also established a research facility in Sydney, with a team that has experience in phage production and purification. And additionally, Australia offers an approximately 40% R&D tax rebate. Our plan is to screen bacterial isolates from eligible patients against our phage library, to select phages that specifically kill the bacterial strain affecting the individual patient, and thus make patient tailor their therapies. For some infections, we may be able to provide a targeted therapy within as little as a few days, and eventually even more quickly, if we have the corresponding phages already pre-manufactured and an inventory. For example, our three phage cocktail against Staph aureus, AB-SA01, which has completed two Phase 1 studies, actually has coverage in-vitro against 97% of global MRSA isolates, and our four phage cocktail against Pseudomonas, AB-PA01, has between 70% and 80% coverage against global resistant Pseudomonas isolates. If screening and lab confirms activity of such pre-manufactured phage cocktail against the bacterial isolate of a patient, the therapy can be provided almost immediately. For other pathogens, and more rare bacterial strains, we expect in many cases to be able to manufacture new personalized therapies, initially within approximately two weeks of receiving a patient's bacterial isolate. And once we have developed a customized phage therapy against a new bacterial strain, we will have these pre-manufactured phages and inventory, and the next patient suffering from the same resistant bacterial strain, can potentially be treated much faster. As Scott mentioned, by the end of 2017, our goal is to provide targeted personalized stage therapies to at least 10 patients in need, and we expect to further expand that clinical dataset in 2018, ultimately getting to a point where we rapidly demonstrate compelling clinical proof-of-concept of this approach. We are planning very carefully to collect clinical data from these compassionate use cases, along with microbiological results, in order to have a comprehensive data set to share with a clinical and scientific community, as well as for the regulatory authorities. To draw some analogies, these compassionate use cases are expected to provide us with an exploratory development clinical data set, similar to Phase 1B2A dated oncology, where a compound is typically tested in multiple different tumor types. We are also building on the precision medicine, RxDx companion diagnostic approach, that is becoming a standard of care in oncology, and will seek to bring a similar targeted therapy approach to infectious diseases. That was the first step in our strategy. Now briefly on the next two steps; in 2018 and beyond, we plan to share data from these compassionate use cases with the FDA and other regulatory authorities and to work with them, to define the scope of data required for product approval. As FDA told us in a Type B meeting earlier this year, the clinical safety and effectiveness data collected during development, including from emergency case studies, couldn't form future discussions for clinical development, and ultimately, the regulatory pathway to approval. We then expect to conduct these agreed clinical trials required for approval, which in some cases could be quite small, following the new Limited Population Antibacterial Drug, or LPAD approval mechanism. Finally, while it's premature to discuss our commercialization strategy today, we expect that the personalized and targeted nature of these bacteria phage therapies, may enable us to better navigate the commercial challenges that are intrinsic to antibiotics in the U.S. market. I'd like to now turn the call back to Scott.

[Scott Salka:]

Thanks Igor. We are working to address the major global health threat, and as Igor just described, we have in place a strategy we believe will provide clinical validation in a more rapid and cost effective manner than it could be achieved through conventional clinical trials. We have a plan to begin treating patients in the coming months and the FDA has indicated a willingness to work with us on a regulatory approval pathway. We are a pioneer in the bacteria phage technology space, having invested over 10 years and $60 million in our platform, which includes, what we believe is the world's only CGMP manufacturing facility dedicated to phage. Our vision is to conquer multi-drug resistant infections. This is a major global health need and represents a significant commercial opportunity. We thank you for your confidence in AmpliPhi Biosciences and for your support. With those comments, I'd now like to open the call to your questions. Operator?

[Operator:]

[Operator Instructions].

[Scott Salka:]

While we are waiting for the first question, I'd like to mention, that AmpliPhi will be presenting at the upcoming LD Micro Invitational Conference being held on June 6th and 7th in Los Angeles. Operator?

[Operator:]

First question is from the line of David Bautz with Zack's Investment Research.

[David Bautz:]

Good afternoon everyone. Thanks for taking my questions.

[Scott Salka:]

Hi David.

[David Bautz:]

The first one has to do with your phage library; I was wondering if you could describe it a little bit more, basically the size of it. How many species of bacteria do you currently have phage against and I guess, to talk a little bit more about the process blend [ph], if you get a sampling that maybe you don't have a phage against yet, what do you actually have to go through to make a product?

[Scott Salka:]

Okay, David. I will ask Igor to address that question. Thanks Igor.

[Igor Bilinsky:]

Thank you, David. So we have a library that has about several hundred different phages in it, that cover most of the bacteria that are on the WHO priority list, and our focus to-date has been largely on Staph and Pseudomonas, these are the two programs we have had in development and for those two organisms, we have very sensitive phage collections. And then, the second part of your question, is that related to an individual patient, if we see an organism against which we don't have a phage, or are you thinking longer term, as we are building up a phage library collection?

[David Bautz:]

Both actually.

[Igor Bilinsky:]

Thank you. So initially, we will focus on the bacterial infections multi-drug resistant infections, against which we do have phages in our library, and again the most -- some of them are [indiscernible] ones based on our discussions with physicians and opinion leaders are Staph or MRSA and Pseudomonas. We are also working on, building up the collection, in collaboration with some of the hospitals and infectious disease physicians, and that involves a range of activities from isolating those phages from patient's bacterial samples, to going through sewers in the hospital and isolating phages from those collections, or basically looking for phages in the environment. All of those [indiscernible], and what I should mention also, all the phages we have in development so far and in our libraries are naturally occurring phages, and that is important from the regulatory standpoint, as we are looking to develop them and bring them to approval.

[David Bautz:]

Okay. Now does this mean, the CRS and CF programs are on hold?

[Scott Salka:]

David, they are in a holding pattern, I would say. We don't feel we have sufficient capital resources right now to start a Phase 2 study in chronic rhinosinusitis. That study would take about -- it would take about four, five, six months to get that study up and running. We take 12 months or so to enroll the patients into the study and another six months or so to read out the data. So we just don't currently have enough cash on the balance sheet to get us that far. So we think the programs are obviously quite exciting to us and so we are looking and are in discussions with potential partners to help us advance the SA01 into a Phase 2 study in the chronic rhinosinusitis population. And the same goes for the AB-PA01, the Pseudomonas cocktail. That cocktail is on the precipice of moving into Phase 1. We have a couple -- a small inhalation toxicology study to finish, and we can start that study in adult CF patients with Pseudomonas infections. But likewise, we just don't have the cash on the balance sheet to fund that study. So again, are looking to potential partners to help us shoulder the economic and really the knowledge burden to move that into phase 1, phase 2, and towards commercialization.

[David Bautz:]

So what about CF patients that have resistant or refractory infections? I mean, that's a pretty sizeable population. Could this strategy be kind of another way to get at that group to be able to treat them?

[Scott Salka:]

You mean the personalized medicine strategy?

[David Bautz:]

Yeah.

[Scott Salka:]

Without a doubt. So we do expect that, over the next year, we will treat certain patients, and as you pointed out, it's a fairly significant patient population with these Pseudomonas infections, and some of them flare up and cause great distress to the patients. So there is certainly the possibility that we could use, under these compassionate use guidelines are Pseudomonas cocktail to treat CF patients in crisis.

[David Bautz:]

Okay. Great. Well appreciate you taking the questions.

[Scott Salka:]

Thanks David.

[Operator:]

[Operator Instructions]. We do have a question from the line of Alan Leong with BioWatch News.

[Alan Leong:]

Scott, Matt, Igor --

[Scott Salka:]

Good afternoon Alan.

[Alan Leong:]

Good afternoon. I have a couple of questions about the personalized administration. Can you tell me a little bit what it looks like when you get their requests? Are there priorities for certain cocktails you'd like to have then, or are you being pretty opportunistic for now? And do you donate the cocktails or the strains or where you'd be reimbursed or it would be a mix?

[Igor Bilinsky:]

Thank you for your question. It's Igor Bilinsky. So there are two approaches. One is, we get a cold call request, and the other one, if we identify patients for a collaboration with the hospital. And our focus largely is on the latter, because that enables us to be prepared and to look for specific types of patients who could benefit from this approach, and have a risk benefit profile that justifies administration under compassionate use. So if we are working with the hospital, we have discussed extensively with the lead physicians there, what type of patients could potentially qualify and what types of patients we could potentially help early on, as we are rolling out this approach. And we have a list of agreed indications that I don't want to go into the detail on this call yet, but we have defined there, a spectrum of indications that we would like to focus on, and would look to pursue those as the initial set of patients, who we help under compassionate use.

[Alan Leong:]

I see.

[Igor Bilinsky:]

We will take it --

[Alan Leong:]

Go ahead, sorry. Also on the latter one, I could see, where on the latter option here, you are allowed to be a little more systematic then?

[Igor Bilinsky:]

Right. And again, you remember, our goal is both to help these patients, who had no other options, but also to compile a very robust clinical and microbiological dataset we can share with the scientific community and with the regulators, and for the later purpose, it's important to have these patients well characterized, and hopefully help these patients such, that the probability of us being able to help them is high.

[Scott Salka:]

And then to add on to what Igor said, it's important not only to have those patients well characterized, but be able to ultimately collect the data, and that becomes a lot harder to do, if you are taking [indiscernible] and sending the phage off to hospitals that you don't have any experience working with.

[Alan Leong:]

I can see the data being extremely valuable for internal development, especially making the jump right into humans. Now what does that do in terms of like the FDA? I would assume you'd still need a safety trial, does it get you sooner set up for through an IND into your first trial after you have received the data?

[Scott Salka:]

Alan, actually if you look at the two compassionate use cases I described during the call, the gentleman with the Acinetobacter infection and on a female cancer patient, they were both treated with phage cocktails that hadn't actually gone through a formal safety study. So the presumption, and Igor mentioned that, we are using a wild-type phage. The presumption is with some characterization, the regulators are considering the phage to be safe. And by minimal characterization, we do look at them to make sure that they don't have known resistance genes or known bad phenotypes or potentially bad phenotypes. So we screen those out. So what we are left with, as Igor mentioned, we collect these from patient samples, we collect these phages from hospital sewers, from community sewers, so a lot of these phages or all of these phages may have already been in people in the past. They have totally evolved with the bacteria that infect us. They have been on the planet for billions of years, and so likely have been in humans already.

[Alan Leong:]

Right. Let me ask another way; some of my associates are thinking of an IND into the first trial and to be able to have -- into a first safety trial of Phase 1 and having some human data of some type is -- makes a much stronger phase to get into that first trial. Would the assumption also apply -- that statement also apply to what you are trying to achieve?

[Scott Salka:]

As Igor mentioned, we have already completed a Phase 1 safety study with our Staph aureus cocktail. So for those Staph aureus phages, that box is checked. Certainly, that could apply with the Pseudomonas cocktail. For example, if we were able to treat a handful of patients before actually moving into the formal Phase 1, that data would obviously be reviewed by the regulators and to the extent that there was no adverse safety events, that would be taken into consideration by the regulators.

[Alan Leong:]

All right. Thank you.

[Scott Salka:]

Thanks Alan.

[Operator:]

And with that, I would like to turn the call back over to management, for any closing remarks.

[Scott Salka:]

Thank you so much, operator. I'd like to close by thanking you for joining us this afternoon. I trust that our excitement for our new emphasis on personalized medicine has come through clearly. We look forward to providing progress report on our next quarterly conference call, and in the meantime, have a great day.

[Operator:]

Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.