Armata Pharmaceuticals, Inc.
Q3 2017 Earnings Call Transcript

Published: 15 Nov 2017

[Operator:]

Good day and welcome to the AmpliPhi Biosciences Corporation 2017 Third Quarter and Business Update Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matt Dansey. Please go ahead.

[Matt Dansey:]

Thank you, Steven. Good afternoon and welcome to our third quarter 2017 financial results conference call. This is Matt Dansey, Business Development Manager at AmpliPhi Biosciences. Joining me on today's call are AmpliPhi's Chief Executive Officer, Paul Grint; our Chief Operating Officer, Igor Bilinsky; and our 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 our Form 10-Q for the quarter ended September 30, 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 is accurate as of today, November 14, 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. With that, I would now like to turn the call over to our CEO, Paul Grint.

[Paul Grint:]

Thanks, Matt. Good afternoon everyone and thank you for joining us on the call. I'm excited to report on the progress AmpliPhi made in the third quarter of 2017. To put that purpose in context, let me first remind you of our near term strategy to utilize expanded access program to investigate the tolerability and activity of our bacteriophage therapeutics in treating multi drug resistant infections. Expanded access programs allow critically ill patients with failed multiple treatments to receive experimental, unapproved therapies in an attempt to save lives. AmpliPhi is currently utilizing such programs in the U.S. and in Australia as a capital efficient way to investigate the clinical benefit of our two new therapeutic candidates, AB-SA01that targets Staph and AB-PA01 that targets Pseudomonas In February this year, the World Health Organization published the Global priority pathogen list of antibiotic resistant bacteria. The major objective of the list is to drive the prioritization of incentives and funding, help align R&D priorities with public health needs and support global coordination in the fight against antibiotic resistant bacteria. In the priority list, Pseudomonas aeruginosa is characterised as Priority one CRITICAL and Staphylococcus aureus as Priority 2 HIGH. Using our Pseudomonas and Staph products, our stated goal is to reach a total of 10 patients treated under expanded access programs by the end of 2017 where upon we believe we will have begun assembling the quantitative and qualitative data that should enable us to engage with the FDA in next stage discussions about a Phase 2 or potentially a clinical study. I am pleased to report that to date we have dosed a total of six patients under the expanded access strategy versus one at the time of our second quarter financial results conference call. I am therefore encouraged that we are on track to meet our year-end goal. Importantly, in this regard, we have brought hospital online, and are working to increase this number still further in the coming months. I will let Igor go into more detail on our progress, but I believe we are in good shape to execute on our strategic plan. We were involved in two publications issued during the quarter. The first appeared in the Journal, Frontiers in Cellular and Infection Microbiology and detailed preclinical data demonstrating the activity of AB-PA01 in reducing biofilms. The second was published in the Journal, Antimicrobial Agents and Chemotherapy and detailed the successful treatment of critically ill patients with a multidrug-resistant Acinetobacter baumannii infection using bacteriophage therapy that AmpliPhi contributed to as part of a multi institutional collaborative effort. In other news, at the end of September we launched the social media campaign around IDV [ph] to raise awareness of the potential of bacteriophage technology to infectious disease community and the role that AmpliPhi could play in providing therapeutic options to patients who suffer from multi drug resistant infections. This included a rallying cry of amp up the fight on Twitter and led to a number of notable engagements with key opinion leaders. In July, we attended and presented at the FDA and NIH sponsored bacteriophage therapy, scientific and regulatory issues workshop. We were strongly encouraged by the comments made by Dr. Peter Marks; the Center Director of Biologics at the FDA during the workshop and the transcript was recently published. At the workshop in his remarks, Dr. Marks stated, those who have discovered over a century ago before the modern antibiotic era bacteria stage may turn out to be important therapeutics in combating antibiotic resistant infections. Over the past decade, the investigation of potential phage therapy have seen a renaissance globally as certain infections have proven to be quite resistant to our existing complimentary antibiotic. And the discovery of novel antibiotic to combat such resistance have become increasingly challenging from a practical perspective. Phage therapy appears to be non-toxic in humans and in animals and phage have the benefits of the bacterial specificity allowed sparing of the remainder of the beneficial microbiota, Dr. Mark continued. Those challenges clearly remain in the development phage therapeutics of the prevention or treatment of infections in humans by potential clinical utility seems quite promising in a time when other options seem much less so”. We concur with Dr. Marks and we believe strongly in both the promise of bacteriophage and our near term strategy to bring this potential therapeutic treatment to patients who need it. The potential bacteriophage therapy was further underscored by Dr. Robert Schooley, a prominent infectious diseases physician at the University of California, San Diego in an October Journal of the American Medical Association interview available on our investor relations page. Furthermore, since AmpliPhi operate and own only cGMP-certified facility that is dedicated to manufacturing bacteriophage therapeutic candidates for human use, we believe we hold a distinct advantage in this promising therapeutic area. With that, I now like to turn the call over to Operating Officer, Igor Bilinsky.

[Igor Bilinsky:]

Thank you, Paul, good afternoon everyone. As Paul mentioned our strategy in the coming months is to provide all therapeutic candidates AB-SA01for Staphylococcus aureus and AB-PA01 for Pseudomonas aeruginosa [ph] to patients under the expanded access regulatory guidelines, also known as compassionate use. To date, we have utilised such programs in both the U.S. regulated by the FDA and in Australia regulated by the Therapeutic Goods Administration. We recently dosed six patients under extended access which puts us more than halfway through the goal of dosing 10 patients by the end of 2017. The patients have been dosed at two major teaching hospitals, one in the U.S. and one in Australia. To date, we have dosed three patients with AB-PA01 targeting Pseudomonas infections and three patients with AB-SA01 targeting Staphy infections. In all cases, patients receive multiple doses of the respective therapeutics and we are strongly encouraged with the results we have seen including good tolerability of the bacteriophage therapeutic candidates in all cases. Since each expanded access case is unique and is undertaken in partnership with local medical experts, we are typically restrictted and the amount of information we can initially divulge. This allows for our partners to carefully analyze treatment data and submit the detailed results for presentation at future medical conferences. Nevertheless, we are in regular contact with the respective hospitals and are kept fully up to date with how patients progress on our experimental therapies. As I have said despite the fact that these patients are critically ill we are strongly encouraged by the anecdotal evidence we are seeing and are positioning ourselves to share a summary of quantitative and qualitative data on the ten patients we are initially targeting, which we believe will aid in the design of Phase 2 clinical trials for AB-PA01 and AB-SA01, and in regulatory discussions. As a reminder, our expectations for the first 10 patients are that AB-PA01 and AB-SA01 both of which are produced at our GMP manufacturing facility will be given to patients suffering from serious or life-threatening infections such as bacteremia, endocarditis, complicated urinary tract infections, prosthetic joint infections, and lung infections, including in patients with cystic fibrosis. Without going into specific detail, I can report that each of our first six patients fit into these categories. When we initiated our single patients expanded access strategy, we just had a goal to treat 10 patients by the end of 2017. Once the 10 patient has been reached we will continue our expanded access outreach to those up to an additional 20 critically ill patients in the first half of 2018. Based on the clinical and microbiological data that we are currently collecting, and will continue to collect we plan on the first half of ’18 to select lead indications for further clinical development, and in consultation with the FDA and other regulatory agencies to find a potential path to regulatory approval. As we reported earlier in the year on our meeting with the agency, the FDA has expressed its commitment to work with us to design their regulatory path for phage therapies. We believe that positive data in the coming month could enable us to initiate one or more Phase 2 studies of AB-SA01 and/or AB-PA01 as early as the second half of 2018. This future study or studies may have the potential to be registrational studies. As a reminder, we are developing AB-SA01 and AB-PA01 as well characterized biologics, and manufacture them at our GMP certified facility. Both products are targeted therapeutics with a broad host range. In preclinical studies, AB-SA01 demonstrated activity against 97% of multi-drug resistance for its clinical isolates collected globally over a multiyear period, while AB-PA01 demonstrated activity against 70% to 80% of similarly collected multi-drug resistance Pseudomonas clinical isolates. Another important consideration for defining the path for the development of our bacteriophage therapeutic candidates is an in-depth understanding of the unmet medical needs and the market opportunity for each indication, which we are refining through discussions with key opinion leaders and market research. One such indication is bacteremia. According to the Centers for Disease Control up to 1.5 million cases of bacteremia are reported annually in the US causing an estimated 250,000 deaths a year. The Agency for Healthcare Research and Quality lists bacteremia as the most expensive condition treated in US hospitals costing nearly $24 billion in 2013. Staph aureus is the second most common pathogen associated with bacteremia causing approximately 150,000 cases per year, and complicated staph aureus bacteremia is associated with approximately 20% mortality, and also often causes metastatic infections such as infectious endocarditis, septic arthritis and osteomyelitis, and can lead to complications such as septic shock. The increasing incidence in antibiotic resistance multistrains makes staph aureus bacteremia a particularly challenging condition to treat and creates an urgent need to develop novel therapeutic approaches that are different from traditional antibiotics, such as bacteriophage therapies. Now I would like to turn the call over to our CFO, Steve Martin, who will review our financial results. Steve?

[Steve Martin:]

Thanks Igor. I'd like to share some highlights from our financial results provided in our quarterly report filed with the SEC today and as announced in our press release. Cash and cash equivalents were $7.7 million as of September 30, 2017 compared to $5.7 million as of December 31, 2016. Based on our updated operating plans focused on single patient expanded access treatments, we believe our existing cash resources will be sufficient to fund our operations until mid 2018. The company currently has 9.5 million common shares outstanding. R&D expenses for the quarter ended September 30, 2017 decreased by $2.5 million to a benefit of $0.8 million from a $1.7 million expense for the quarter ended September 30, 2016. The difference is due primarily to a $2 million Australian tax incentive payment or R&D rebate received in the third quarter, which has been recorded as an offset to research and development expenses. G&A expenses for third quarter of 2017 decreased by $0.2 million to $1.6 million from $1.8 million for the same period in 2016. The decrease was primarily attributable to decreases in non-cash stock-based compensation expense and legal fees. With that I would like to turn the call back to Paul.

[Paul Grint:]

Thank you, Steve. So in summary we believe we are on track to meet our short-term goal of dosing 10 patients with either AB-SA01 or AB-PA01 by the end of 2017, the completion of the interim stage to demonstrate clinical benefit of our two lead therapeutic candidates as well as inform our planning for Phase 2 or potentially a pivotal study. We believe our therapies hold tremendous promise to provide treatment to seriously ill patients suffering from antibiotic resistant infections, who have few if any other options. With those comments, I would like to now open the call up to questions. Stephen, could you assist? Thank you.

[Operator:]

[Operator Instructions] And our first question comes from David Bautz with Zacks Investment Research. Please go ahead.

[David Bautz:]

Hi, good afternoon everyone. Thanks for taking the questions. So my first one, I just want to clarify are you going to approach the FDA after you get the data from the 10 patients or are you going to wait to approach them until after you get data from more than 10?

[Paul Grint:]

David, this is Paul. Good afternoon. Let me clarify. We are actually going to wait until after we have data more than 10. Our goal was as we said, 10 by the end of the year. We are in the process of getting additional institutions up. Clearly we have said we want to treat around another 20 in the early part of next year, and it is really looking at that dataset of around 30 patients or so that we feel will be meaningful to do a couple of things. One is to help us refine the Phase 2 study design, or if we believe appropriate maybe even pivotal study design, but then also obviously to aid in discussions with the FDA with regard to their review of those clinical protocols. So we will need more data than just the 10 patients.

[David Bautz:]

Okay. So what type of data do you think the FDA wants to see, I mean, are they going to be survivals, bacterial counts – do you have a feeling for what they are going to want?

[Paul Grint:]

I think the simple answer is as much data as we can get. So, obviously we are tracking a number of things in these patients. I mean, there is a number of routine things done to look at them. So, clearly through clinical chemistries we are monitoring the progress of the patients, but also those safety markers, if you like. We are obviously watching them microbiologically both from a bacterial standpoint to see what happens over treatment time. But also obviously looking at from a phage standpoint, to look at obviously the sensitivity of [bacteriophages]. If the disease condition such as bacteremia, as Igor discussed, has a high mortality rate, clearly the mortality component will be captured as well there. So it really depends. We are capturing quite a lot of data on these patients.

[David Bautz:]

Okay. So my last question is does the FDA only allow phage treatment under expanded access programs that's produced in a GMP facility. Since you guys are the only GMP facility that produces it, I was just kind of wondering if you're the only game in town for that?

[Paul Grint:]

That is a very interesting question. I believe currently that I think we are the only company treating patients in the U.S. under single patient expanded access. I'm not aware of other companies that are currently doing that. So, I cannot comment in detail with regard to what the FDA’s views are on the product that comes from a GMP facility versus one that doesn't. But could actually point you to, the FDA NIH workshop, which we referenced in the conversation earlier because there was quite a lot of information laid out by the FDA with regard to their expectation about product quality.

[David Bautz:]

Okay, thanks. Thanks for taking the questions.

[Operator:]

Our next question comes from Joe Pantginis with H.C. Wainwrigh. Please go ahead.

[Unidentified Analyst:]

Hello, this is [indiscernible] filling in for Joe Pantginis. Congratulations on all the progress during the quarter, and I have a couple of questions. What forum are you expecting to release the news from the individual patients, and what is it dependent on?

[Paul Grint:]

Good question Pete. We are still working on that. I mean, as Igor indicated, in his comments earlier obviously we are working with the institutions. Many of these institutions do want to report detailed patient information at an appropriate medical meeting. But clearly as a company what we' d like to do is to present a broader summary of information, both from the types of patients that we treated, the nature of the treatments that we have given and some of the key outcome measures. So, our hope is that we will be able to present just what I have outlined on the patients at some point perhaps in the early part of next year.

[Unidentified Analyst:]

All right, thanks. And as you compile more and more data from the patients with varying infections, with no other option, what profile do you think you can put forward to the FDA to request a designation such as a breakthrough therapy?

[Paul Grint:]

Well, again a great question. We will have to see what the data shows us, but clearly as we said we are in critically ill patients. If these are individuals that are out of options, and we get a sense of perhaps where it potentially add a therapeutic option there in addition, I think that is the type of thing we would like to see to go and have a discussion with the FDA.

[Unidentified Analyst:]

All right. Thank you very much, and congratulations again.

[Paul Grint:]

Thank you.

[Operator:]

Our next question comes from Keith Markey with Griffin Securities. Please go ahead.

[Keith Markey:]

Hi, thank you for taking my question. I was just wondering, is it that you have not or cannot talk about in general terms the efficacy and safety that you have seen so far in the patients that have treated?

[Paul Grint:]

Well, again, just referring you to our comments. I mean, this is not a clinical protocol, per se. I mean, each patient is treated as an individual patient. The emergency IND is something that is requested by the treating physician. So we really are dependent on the treating physician and the institution where that patient is treated on releasing data before we can comment in any detail on that publicly. So that is the situation. I mean, clearly as we have indicated, given the nature of these patients there is a desire by the infectious disease teams of those institutions to be able to present appropriate data on those patients at the right forum in a medical meeting.

[Keith Markey:]

So, I wasn't really trying to get information about individual patients or even which of the two different therapies you have treated patients with, [at certain results] just simply generally are the patients that have been treated alive still, and have there been any safety issues that you have generally identified?

[Paul Grint:]

I think just to go back to our previous remarks, overall so far what we have seen is the therapeutic courses have been well tolerated. It is difficult to really comment beyond that because we are still actually collecting data from these patients, and so until we follow them up for a sufficient period, and that is complete it is difficult to comment otherwise with regard to clinical outcomes.

[Keith Markey:]

Okay, thanks and then, are there any particular venues where you and/or the physicians maybe more likely to present say in the first half of next year?

[Paul Grint:]

I think, several factors impact that. It depends on the underlying condition that the patient has that might have an influence on one forum over another, if it is being presented at a medical meeting, abstract headlines can have an effect on that. I just like to point you back to the original case that we treated here at UCSD with the [indiscernible] infection. In that situation the institution chose to press release quite a lot of information soon after the completion of treatment. So, it is very possible that we might see that again with some of the patients who we are currently treating as well.

[Keith Markey:]

Okay, thank you.

[Operator:]

And that concludes our question and answer session. I would like to turn the conference back over to Paul Grint for any closing remarks.

[Paul Grint:]

Thank you. Thank you for participating in today’s call. If you have any questions, please reach out to us or our Partners at Westwicke. Thank you very much.

[Operator:]

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.