Chemomab Therapeutics Ltd.
Q4 2021 Earnings Call Transcript

Published: 9 Mar 2022

[Operator:]

Greetings. Welcome to Chemomab Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Barbara Lindheim, Vice President and Investor Relations. Thank you. You may begin.

[Barbara Lindheim:]

Welcome to the Chemomab Therapeutics 2021 Fourth Quarter and Full Year Results Conference Call. Thank you for attending. I am Barbara Lindheim, consulting Vice President of Communications at Chemomab. With me today are Dale Pfost, our Chairman and CEO, Don Marvin, CFO, Chief Operating Officer, and Executive Vice President, Dr. David Weiner, Chemomab Interim Chief Medical Officer, and Dr. Adi Mor, our Co-Founder and Chief Scientific Officer. Before I turn the call over to Dale, please take note of our forward-looking statements. Today's call may contain forward-looking statements which may be identified by words such as may, could, will, expect, intend, plan, and other similar words and expressions. All forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business, and the environment in which we operate. These statements are subject to your risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our earnings press release that we issued this morning together with our SEC filings for a more complete discussion of factors that could cause our actual results to differ materially from those expressed or implied in forward-looking statements. You can read a comprehensive list of those factors under the heading, Risk Factors, contained in our Annual Report on Form 10-K, together with factors under similar headings, in the other reports and materials we filed with the SEC. Except as required by federal security laws, Chemomab does not undertake to publicly update or revise any forward-looking statements subsequent to the date made as a result of new information, future events, changing circumstances, or for any other reasons. Let me now turn the call over to Dale. Dale.

[Dale Pfost:]

Welcome to the First Chemomab quarterly conference call covering 2021, fourth-quarter, and full-year, along with an update on our planned activities for 2022. I came on board as CEO this past September, after a careful review of the company's science. I was impressed by the clinical and commercial potential of CM-101, our pipeline in the product, focusing on indications that the confluence of inflammation and fibrogenesis, an area of great unmet medical needs. Also, by the rigorous translation on pre -clinical science produced by our Co-Founder and CSO, Dr. Adi Mor, and her team. Our lead clinical candidate, CM-101, is a monoclonal antibody that neutralizes CCL24, a unique target that has been validated in 11 pre -clinical model systems. CM-101 has demonstrated good safety and pharmacokinetics and pharmacodynamics in two Phase 1 studies in both healthy volunteers and patients, which further supports our belief that CM-101 has first-in-class potential in the two rare disease indications of primary sclerosing cholangitis or PSC. And systemic sclerosis SSc, as well as in an additional clinical indication. I'm excited to be Chemomab's CEO and now also Chairman. I believe the company has a very bright future and I look forward to sharing this progress with you. First, an overview of our progress in 2021, which was an eventful year for Chemomab. Key accomplishments included

[David Weiner:]

As Dale noted, the strategic review has resulted in a number of important changes to the CM-101 clinical development program. We initiated this review based on multiple relevant factors, most notably upon receipt of key feedback from global regulatory authorities. Today, I am presenting the broad outlines of the revised plan. We expect to provide significantly more detail in several months time. Key elements of the revised clinical program include implementing a dose finding component to the CM-101 development program by significantly expanding our phase two trial for primary sclerosing cholangitis. We're currently exploring the safety, tolerability, and importantly, the biomarker and clinical activity of 10 migs per kilogram of CM-101 administered intravenously every three weeks, over 15 weeks. We will be increasing the size of the study by adding additional dose cohorts, including plans to evaluate both a lower and a higher dose level of CM-101 in this ongoing trial. In addition, we plan to add an open-label extension to the trial to evaluate the safety, tolerability, and durability of effect, over longer treatment durations. Finally, we will be performing an interim analysis of the currently enrolling dose cohort in the study to assess safety in biomarker data, with an expected readout in the second half of this year. Regarding systemic sclerosis. Focus the goals of our systemic sclerosis trial, towards establishing biological and clinical proof-of-concept in this patient population. We are revising the design of our planned systemic sclerosis trial, in a way that should enable an expedited path to proof-of-concept data, as well as further elucidation of the different mechanisms of action of CM-101 in treating the skin long and vascular damage seen in systemic sclerosis patients. The data obtained from this study can potentially provide a clear and rapid clinical route forward by enabling more informed decisions about the selection of patients and primary endpoints for registrational trials. We are currently working with key systemic sclerosis research and clinical experts to refine and finalize the design and study endpoints of the Phase II trial. We anticipate that these activities will result in trial initiation in the second half of this year. Lastly, as we ramp up our activities for our primary indications of primary sclerosing cholangitis and systemic sclerosis, we will be winding down our ongoing safety, tolerability, and biomarker trial that is evaluating a five milligram per kilogram dose of the subcutaneous formulation of CM-101 in liver fibrosis patients. We will be halting screening and enrollment in the coming weeks. And based on the timing required for all enrolled patients to complete all study visits, we anticipate the final clinical readout will be around the end of this year. The data readouts in this study will include safety and tolerability data to support future development, and deeper insight into CM-101's mechanism of action. Providing additional data on the anti-inflammatory and anti - fibrotic activity of CM-101 in liver diseases. Finally, a key objective of this study is to explore the safety and drug exposures associated with our sub-Q formulation. And we believe the early completion in this study should be sufficient to achieve this purpose, providing the pharmacokinetic data needed to assess our next steps in the development of the subcutaneous formulation of CM-101. The proposed changes to the development program for CM-101 are expected to provide the following key data. To obtain important data on the clinical dose response relationships to inform the broader development program. And if the data are supportive to identify the optimal dose to advance in later trials in primary sclerosing cholangitis. To obtain proof-of-concept data on clinically relevant aspects of systemic sclerosis, a complex rheumatologic disorder with both inflammatory and Fibrotic components. To best informed the development path for a novel first-in-class therapeutic like CM-101. And to obtain relevant safety and tolerability data to support the evaluation of higher doses of CM-101, as well as informed the next steps in the development of the subcutaneous formulation. Overall, these changes should also provide additional benefits, including sharpening our focus on our clinical efforts on the rare diseases of primary sclerosing cholangitis and systemic sclerosis. Accelerate the timeline, particularly in systemic sclerosis, to the achievement of meaningful mechanistic, biological, and clinical proof-of-concept data. With that, I will turn the call over to Don Marvin, our Chief Financial Officer, Chief Operating Officer, and Executive Vice President. Don?

[Donald Marvin:]

Good day. As CFO of Chemomab, I am pleased to have this opportunity to communicate directly with our shareholders and other stakeholders. Today, I will review highlights of our 2021 financial performance. Please see the press release we issued this morning for more detail. I will also briefly discuss our thoughts about the company's financial outlook for 2022. Our first-ever quarterly conference call is taking place during a particularly challenging time in the biotech industry. Like many of you, I have been through tough market cycles before, and know how painful they can be. However, I also know that downcycle's inevitably cycle to better times. And I believe this one will too. We cannot change the markets, but we can ensure that we are not distracted from focusing on what we need to do, to build a successful company. And for Chemomab management, that is to ensure we are pursuing the optimal development plan for CM-101, prudently managing our finances, to have achieved the greatest ROI on our investments, conserving capital to the extent feasible while advancing our clinical programs in as optimal fashion as possible, and monitoring our ecosystem for potential opportunities to bring additional attractive assets in house. Let me now share a summary of our financial performance in 2021. In addition to the detail included in today's press release, we also expect to be filing our 10-K Annual Report before the end of March. Cash and cash equivalents were $61.2 million as of December 31st, 2021, compared to $11.8 million as of December 31st, 2020. R&D expenses were $2.4 million for the quarter and $6.3 million for the full year ended December 31st, 2021, compared to $1.3 million and $4.7 million for the same quarter and year in 2020. G&A expenses were $2.6 million for the quarter and $6.0 million for the full year ended December 31st, 2021, compared to $0.7 million and $1.3 million for the same quarter and year in 2020. Net loss was $5 million, or a net loss of $0.02 per basic and diluted share for the fourth quarter and $12.5 million or a net loss of $0.06 per basic and diluted share for the year ended December 31, 2021, compared to $2.6 million or a net loss of $0.02 per basic and diluted share for the quarter and $6 million or a net loss of $0.04 for basic and diluted share for the full year ended December 31st, 2020. The weighted average number of ordinary shares outstanding, basic and diluted, are $207,468,650 and $136,755,498 for the year ended December 31st, 2021 and December 31st, 2020, respectively. As Dale and Dave described, a cornerstone of our efforts over the coming months, will be to implement revisions to our clinical program for CM-101. As noted, we expect these changes may allow us to achieve clinical validation sooner at less costs, and with less risks while providing us more data readouts along the way and better positioning of CM-101 per subsequent registrational trials. Since its inception, Chemomab has been characterized by a sufficient use of capital. And I'm pleased to report that we are upholding that tradition by ensuring we are continuing to work smarter and more efficiently in every area of our operations. And as we have noted, the changes we are implementing to strengthen our clinical programs, also have the beneficial effect of costing less than the original plans. As a result of these expected savings, in clinical spend and our plans for continued prudent management of corporate resources, I am pleased to confirm that we now expect to have adequate capital to sustain the company through the end of 2023. This is about six months longer than our prior forecast. Now, being required to raise new funds during market downturn is a good thing, it provides us greater flexibility. Another important initiative for 2022 is enhancing and extending our corporate and investor communication outreach to better educate and inform our various stakeholders about the potential and progress of our clinical programs. We are updating and refreshing our corporate and investor materials and are planning an active round of investor conferences, non-deal roadshows, social media outreach, KOL events, and other special virtual and in-person investor activities as appropriate. We believe we have a compelling story to tell and we'll work to ensure that is more widely known and appreciated going forward. In summary, we are excited about the therapeutic potential of CM-101 and the opportunities afforded by our revised clinical development program to achieve strong momentum at Chemomab over the rest of 2022 into 2023. We believe we have the opportunity to make a significant difference in patients lives while continuing to build a vibrant and valuable company. We appreciate your continuing support, and invite you to reach out if you would like to communicate with us directly. I will now turn the call back to Dale. Dale?

[Dale Pfost:]

We are excited about the revised clinical program we outlined today. I believe our team has done an outstanding job of developing practical and achievable plans to strengthen our clinical programs. We see CM-101 has great potential as a pipeline and a product with its ability to act it to confluence of inflammation and Fibrosis that is implicated in a variety of indications with high unmet medical need and strong commercial potential. We believe we are on the prudent and right path to building value at Chemomab. With our new plan over the next 24 months, we expect to

[Barbara Lindheim:]

Thank you, Dale. This concludes our prepared remarks. Operator, we are ready for questions.

[Operator:]

A confirmation tone will indicate your line is in the question queue. Please ask one question and one follow-up question, and then re-queue for additional questions. Our first question is from Kristen Kluska with Cantor Fitzgerald. Please proceed.

[Kristen Kluska:]

Hi. Good morning and good afternoon, everybody. Thanks for taking my question. They're all on systemic sclerosis. I wanted to ask; I understand some of the endpoints could differ based on you wanting to look at a more holistic package of effects on the different organs that play a role for these patients. But could you further comment on some of the trial design implementations you're considering at this point. For example, are you looking at changes across inclusion, exclusion, criteria to understand different levels of severity, or looking at different doses to study as well as length of time, or is it all of the above at this point?

[David Weiner:]

Yes. Hi. It's all of the above at this point. We have changed the goals of what we're trying to achieve in SSc. And we're moving towards an exploratory and clinical proof-of-concept. And we're going to do exactly that. We believe CM-101 has a unique opportunity in this very heterogeneous disease to address multiple components, so rather than initially focusing on a composite endpoint, we intend to more deeply explore each of those individual components in a more -- in a revised trial design. And we intend to provide more clarity on that design in the coming months.

[Kristen Kluska:]

Okay. Got it. Thanks for that. And then my second and final question is, is this on the subcutaneous study? It sounds like based off this decision, that you think that there is at least enough definitive evidence for you to understand the effects with this type of formulation. So can you just confirm that? And then assuming that things read out positively, you're happy with the result, is the plan after these initial PSC and SSc studies to then consider moving into a subcutaneous trial?

[Dale Pfost:]

Yes. We are continuing to explore the non-clinical aspects of the formulation and optimizing them. And later this year, when we get the readout from the liver fibrosis trial, which is the trial that is being conducted with the subcu formulation, that exposure and pharmacokinetic data will determine what our next steps in the clinical program are. And indeed the goal here is to advance that such, that it'll be either usable in our registration programs or soon thereafter.

[Kristen Kluska:]

Got it. Thanks so much for taking my questions.

[Dale Pfost:]

Thank you.

[Operator:]

. Our next question is from Nathan Weinstein with Aegis Capital. Please proceed.

[Nathan Weinstein:]

Thank you. Good morning, Dale, Adi, and Chemomab team. Thanks so much for taking my questions. And the first one is just on PSC regarding including a higher dose. What gives you the confidence to include the higher dose in the revised trial?

[Dale Pfost:]

I'm not exactly sure we have that confidence, but we -- our desire here is to explore more than the single-dose that we're currently targeting . The rationale is to add a lower dose and a higher dose. We believe that the 20 -- the safety observed to date with CM-101 across all the populations, which is quite good, will support us advancing to the evaluation of the 20 mg per kg dosing in the PSC trial in the near future.

[Nathan Weinstein:]

Okay. That's exactly what I was hoping to hear so I appreciate that. And then secondly, with the extended cash runway, I guess conceivably, does that take us through at least the initiation of a prospective registration study in one or both of the indications?

[Donald Marvin:]

As we've stated before, we have sufficient cash to run the operations through the end of 2023. We will be investigating that further as trials designs become more formative, and we'll communicate that to the investment team maybe over the next couple months.

[Nathan Weinstein:]

Okay. Okay. Fantastic. Thanks again for taking my questions. Appreciate it.

[Donald Marvin:]

Thank you.

[Operator:]

. We will pause for a brief moment to poll for any final questions. There are no more questions at this time. I would like to turn the conference back over to management for closing comments.

[Dale Pfost:]

Well, thank you very much for attending our first quarterly earnings call. I'm real proud of the team, and their processes that they've undertaken over the last couple of months to come to these adjustments to our clinical plans. I'm really excited about the potential. We're looking forward to updating you again in the May quarterly conference call. Thank you.

[Operator:]

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.