Chemomab Therapeutics Ltd.
Q2 2022 Earnings Call Transcript

Published: 12 Aug 2022

[Operator:]

Greetings Welcome to Chemomab Therapeutics 2022 Second Quarter Earnings Call. At this time all participants are in listen only mode. And Question-and-Answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Barbara Lindheim, Consulting Vice President of Chemomab Therapeutics. Barbara, you may now begin.

[Barbara Lindheim:]

Welcome to the Chemomab Therapeutics 2022 second quarter earnings call. Thank you for attending. I am Barbara Lindheim, Consulting Vice President of Strategic 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, Interim CMO; and Dr. Adi Mor, our Co-Founder and Chief Scientific Officer. Before turning 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 may today are based on management's current expectations, assumptions and beliefs about our business and the environment in which we operate. The statements are subject to 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 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 file with the SEC. Exceptions 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 reason. Let me now turn the call over to Dale. Dale?

[Dale Pfost:]

Welcome to the Chemomab conference call covering the second quarter of 2022. I am pleased to report we have continued to make good progress on multiple fronts since our last call. These include first advancing our clinical programs for CM-101, our first in class monoclonal antibody that neutralizes CCL-24, a novel disease targets at the confluence of fibrosis and inflammation. Second, adding to the intellectual property portfolio of CM-101. Third, presenting important new preclinical data at major scientific meetings. And fourth, adding a number of highly experienced staff essential for the progression of our scientific and clinical programs. On the clinical development front, we continue to make good progress in our CM-101 on one clinical programs, as Interim CMO, Dr. David Weiner will discuss in greater detail shortly. In summary, we concluded the treatment phase of our Phase 2 Liver Fibrosis study. We finalized plan revisions and initiated global regulatory filings supporting expansion of our Primary Sclerosing Cholangitis or PSC Phase 2 trial, and we made significant progress on delineating the design of our upcoming Phase 2 trial in Systemic Sclerosis, or SSc. Turning to our Intellectual Property, I'm pleased to report that in June, the United States Patent and Trademark Office issued Chemomab, a new method of use patent. It covers the use of CM-101 and other anti CCL-24 antibodies in binding fragments for the treatment of a range of fibro inflammatory liver diseases, including PSC and other cholestatic related disorders. Liver diseases are an important target for CM-101, which is currently in a Phase 2 trial for treatment of PSC, a potentially lethal disease affecting the bile ducts of the liver. And as I noted, a Phase 2 liver fibrosis study in NASH patients that is nearing completion. In addition, there are a number of other liver diseases where CM-101 might have therapeutic value. So we believe that this new patent may be significant. This new patent adds to the protections provided by CM-101 core composition of matter patents that has already issued in the US, Europe and other global markets. The new patent extends Chemomab intellectual property protections for CM-101 in the US for another three years through at least 2038 with additional extensions possible. We've also filed and intend to continue to file additional patents as warranted in an effort to assure the optimal protection for this key asset, which we believe may have wide applicability in a variety of fibro inflammatory diseases. In June, the company made a number of presentations at important European Scientific Meetings. These are good examples of our ongoing preclinical research designed to further elucidate and validate our CCL-24 target and its role in disease and to better understand how CM-101 affects disease pathways. Additionally, by sharing this research at major scientific meetings, our scientists are helping further educate the broader scientific and medical communities about the role of CCL-24, in fiber inflammatory disease, the therapeutic potential for CM-101 and interesting and robust science underlying our approach. First, in an oral presentation of the 2022 EASL International Liver Conference represented data from a preclinical PSC model that used advanced technologies to reveal unique liver macrophage subpopulations as the major source of CCL-24 production in the area of the bile duct that is damaged in PSC. Our scientists also demonstrated in this model that the treatment with CM-101 interfered with the core PSC disease pathways in a way that is potentially associated with therapeutic activity. Second, at the First International Extracellular Matrix or ECM Pharmacology Conference, Chemomab researchers presented a poster that included both preclinical and early clinical data demonstrating that CM-101 attenuates biomarkers associated with ECM expression. This is noteworthy because ECM expression is involved in PFC pathophysiology, and is closely related to CM-101 mechanism of action. Importantly, this dataset supports our efforts to translate preclinical biomarker findings on ECM remodeling and deliver to the use of similar serum biomarkers in patients. Third, earlier in June, we presented data supporting the role of CCL-24, as a therapeutic target for systemic sclerosis and a poster at the 2020 to use our European Congress of Rheumatology. This study which was conducted by our collaborator Professor Francesco Delgado of Leeds University in the UK, examined the role of CCL-24, in longitudinal cohorts of diffuse cutaneous SSc patients. The study reported elevated serum levels of CCL-24 in these patients, and showed that high circulating CCL-24 levels were correlated with disease activity and worse prognosis, as reflected by high fibrotic activity and the deterioration of lung function over time. The findings further support the role of CCL-24, as a potential therapeutic target for SSc. Researchers received positive feedback on these presentations and we look forward to further conference participation over the rest of the year. Since it started the second quarter, we added a director and several senior level executives we view as critical to our continued success. Jill Quigley JD, a highly accomplished biotechnology executive with broad experience in Public Company, Executive Management, Global Operations, Legal Affairs and Finances, joined our Board of Directors. We're also welcoming Christina Crater, MD, as our new Vice President of Clinical Development, who will be joining us at the end of August. Dr. Crater brings an extensive background in medical affairs and clinical trial design and execution across a broad range of therapeutic indications. We expect the addition of Dr. Crater to significantly augment our medical and clinical capabilities. Additionally, during the quarter, we appointed Dylan Backman, PhD as Vice President of Research and Development. Dr. Backman is a terrific addition to Chemomab bringing more than 20 years of highly relevant experience in Immunology, Antibody Development, Translational Research and Biomarker Development, including more than a decade in Senior Science roles at Compugen. Renting out the Science and Clinical team are several highly experienced mid-level professionals bringing vital skills to enhance our capabilities in clinical trial operations and planning. We feel competent, we now have most of the right personnel in place to execute on our clinical programs. Let me now turn the call over to Dr. David Weiner, who has been leading our efforts to advance our clinical development program for CM-101.

[David Weiner:]

Good morning. Today we will be providing updates on three key elements of our CM-101 Clinical Development Program. One, we will provide additional details on the status of our Phase 2 Safety Pharmacokinetics Biomarker study in Liver Fibrosis Patients. Two, we will provide additional details on the revisions to our randomized placebo-controlled dose findings study in primary sclerosing cholangitis patients. And three, we will update our progress towards finalizing the design of our Planned Phase 2 Biological Proof of Concept trial of CM-101 in Systemic Sclerosis. Let me begin with the liver fibrosis trial, which we are in the process of wrapping up. For context on this trial, it is useful first to review some background on the Phase 1 clinical studies of CM-101. We initiated the clinical development of CM-101 with a single ascending dose study in healthy subjects, which demonstrated the safety and tolerability of the intravenous administration of doses of CM-101 up to 10 milligrams per kilogram. We then progressed to a Phase 1b assessment of the safety, tolerability and initial biological activity of multiple ascending doses of CM-101 in subjects with NAFLD or non-alcoholic fatty liver disease. The trial was randomized and placebo controlled, were two cohorts of eight subjects each received either placebo or CM-101 one group at 2.5 milligrams per kilogram intravenously, and the second group at 5 milligrams per kilogram subcutaneously. Both groups received five doses once every three weeks for a total treatment period of 12 weeks. It's instructive to review the key results of these studies, as they provide the backdrop for the Phase 2 trial now underway. Administration of CM-101 was found to be safe and well tolerated. Favorable multiple dose kinetics of CM-101 were obtained, along with evidence for peripheral target engagement at both dose levels. Importantly, initial signs of activity as CM-101 were observed on serum based biological markers, as well as liver stiffness assessed by the non-invasive elastic graphic method known as FibroScan. The serum biomarkers were Pro-C4 and TIMP1. Pro-C4, a marker of collagen type 4 formation was decreased by 10% from baseline in subjects who received 2.5 milligrams and 5 milligrams of CM-101 with no change observed in placebo patients. Similarly, a comparable reduction in TIMP1, which is a component of the widely used composite ELF biomarker score was observed in CM-101 treated subjects while it's increased in subjects who received placebo. And in addition to the effects observed on these important markers of extracellular matrix biology, favorable and concordant changes were also observed in six additional fibrosis biomarkers in subjects receiving CM-101. These biological markers are also outcome markers we're assessing in the ongoing liver fibrosis trial. Regarding liver physiology, we observed a decrease in liver stiffness reflected by approximately 15% reduction from baseline in subjects receiving CM-101 as compared to no change in subjects receiving placebo. Based on these promising early results, and with the intent to confirm and extend these findings, and to broaden our understanding of the mechanism of action, and potential beneficial clinical effects of CM-101 in fibro inflammatory liver disease, we initiated the current study a randomized placebo-controlled trial in patients with Non-Alcoholic Steatohepatitis or NASH. Patients with stage F1C, F2, and F3 disease were enrolled in the trial and were randomized to either CM-101 at a dose level of 5 milligrams per kilogram administered subcutaneously over placebo. Patients received eight doses of study drug once every two weeks for a treatment period of 15 weeks. The primary outcome measure of the trial is safety and tolerability. Key secondary outcomes include evaluation of multiple serum based fibrotic markers, including ELF score, Pro-C3, Pro-C4, and CK-18. Evaluation of multiple serum based inflammatory markers, including C-reactive protein, fibrinogen, haptoglobin, and alpha 2 macroglobulin. Changes from baseline in clinical laboratory measures utilized to evaluate a static function, including ALC, AFT, total bilirubin and lipid profiles. Evaluation of liver fat content by MRI and liver stiffness by FibroScan and evaluation of the local tolerability in pharmacokinetics following subcutaneous delivery on CM-101. Regarding trial status as of August 1 of the 23 patients that were enrolled and randomized, all 23 have completed treatment, and four of those remained in the protocol defined safety follow up period. We are on target for a final readout in the fourth quarter, and look forward to sharing the clinical trial data at that time. We believe that the data from this trial will provide useful insights and support of the CM-101 Development Program. Although the sample size is small, based on the encouraging signs of activity we saw in the Phase 1b study in NAFLD patients. We believe that evaluating the same relevant outcomes that a patient population with more severe liver inflammation and fibrosis is likely to be informative. Importantly, these data represent the first readout of CM-101’s activity in patients with established liver disease. For the important secondary objective of exploring the safety and drug exposure achieved with our subcutaneous formulation, we believe the study results will also provide us the pharmacokinetic and tolerability data needed to inform next steps in the development of the current subcutaneous formulation of CM-101. Turning to our Primary Sclerosing Cholangitis trial. We view PSC as a promising clinical indication for CM-101 based on the extensive preclinical and translational data generated by our researchers that highlights the potential role of CCL-24 in PSC related disease pathophysiology, and the observed activity of CM-101 in attenuating, the fibro inflammatory processes that characterize the disease. As such, we previously indicated our interest in increasing our clinical efforts in this rare disease, including expanding the size and scope of our ongoing trial, and importantly, in adding a dose finding component to better inform the optimal CM-101 dose to advance into late development. Today, we can report that we have finalized the trial revisions and has begun regulatory submissions with a major clinical trial protocol amendments support trial expansion. However, it is useful to note that much in the trial design has not changed. The core design of the trial as a randomized placebo controlled multiple dose study remains unchanged. The patient population under study, namely PSC patients with large duct disease of more than 24 weeks duration also remains unchanged. The trials double blind treatment period where all enrolled patients receive five administrations of study drugs, which is either CM-101 or placebo. intravenously every three weeks remains the same. Finally, all outcome measures in the trial, including evaluations of serum ALP level, serum biological markers, and Fibroscans remain unchanged. Revisions to the trial include the following

[Don 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 second quarter 2022 financial performance. Please see the press release we issued this morning for more detail. As you know, the market for biotech stocks remains very challenging. I want to note again that while we cannot change the markets, we can ensure that we are not distracted from focusing on what we need to do to build a successful company and for Chemomab that is to ensure we are pursuing the optimal development path for CM-101. Prudently managing our finances and serving capital to the extent feasible, while advancing our clinical programs in as optimal fashion as possible, and monitoring our ecosystem or potential opportunities to bring additional attractive assets in house as resources permit and for tracking competitive challenges. We believe we are doing a good job delivering on these goals and we will strive to do so going forward. Let me now share a summary of our financial performance in the second quarter of 2022. Cash, cash equivalents and bank deposits were $51.8 million as of June 30, 2022, compared to $57.5 billion at March 31, 2022. R&D expenses were $2.9 million for the quarter ended June 30, 2022, compared to $1.3 million for the same quarter in 2021. The increase in R&D expense, quarter-over-quarter primarily reflects the ramp up in activity supporting our clinical programs for CM-101. G&A expenses were $3.3 million for the quarter ended June 30, 2022 compared to $1.4 million for the same quarter in 2021. Please note that the 2022 figure includes 700,000 noncash stock-based compensation payments. The increase in cash G&A in the second quarter partly reflects key additions to the senior management team. In addition, about half of the year-over-year increase reflects a non-cash charge for previously disclosed equity-based compensation plus a provision accrued for a potential tax liability arising from transactions that took place prior to the company's reverse merger in March 2021. Net loss was $6.2 million, or a net loss of approximately $0.03 per basic and diluted ordinary share for the second quarter of 2022 compared to $2.8 million, or a net loss of approximately $0.01 per basic and diluted ordinary share for the quarter ended June 30, 2021. The weighted average number of ordinary shares outstanding basic and diluted were 228,173,276 which equals 11,408,664 American Depository shares for the quarter ended June 30, 2022. We continue to prudently manage our cash and currently expect our runway to last through the end of 2023. As we have indicated in our last call. 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 pleased with our progress to date and believe we are continuing on the right path to build value at Chemomab. We look forward to sharing more details with you in the coming months. We currently are planning a virtual event this fall to provide more details on our upcoming systemic sclerosis trial. And as noted, we also expect to provide an initial readout on our liver fibrosis study and to complete an interim safety assessment of our PSC trial around the end of the year. We do appreciate your continued interest in support. Operator, we're now ready to open the floor to questions.

[Operator:]

Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Now our first question comes from the line of Jeff Jones with Oppenheimer. Please proceed with your question.

[Jeff Jones:]

Good afternoon, guys. Thanks for taking the question. Just a few here, in regards to the 5 mg subcutaneous dose and the NASH or liver fibrosis study? Do you have any data that speaks to how that compares from an exposure perspective to the 51 mg, 10 mg, and 20 mg IV doses used in the PSC trial? And then in terms of the interim safety readout on the PSC trial? I may not have caught it, do you plan on sharing any information from that interim readout or not? And then on the sub, the systemic sclerosis trial, I know starting goal of starting end of this year, do you any have any feedback on sort of when we would be looking for top line or interim results from that trial? Thank you very much.

[David Weiner:]

Can I take it, Dale?

[Dale Pfost:]

Yes, go for it. Thank you.

[David Weiner:]

Yes, happy to answer questions. So we do have some regarding your exposure question. The subcutaneous formulation in the Phase 1b behaved with an exposure that was roughly 60% of an equivalent dose in the IV. So that's our initial data there gives us some anticipation of what we expect to see, at the end of this year, when we look more deeply at the PK data of the 5 milligrams per kilogram subcutaneous in the liver fibrosis trial. We data on the 10 milligram per kilogram is essentially linearly increase from the five and that was observed in our Phase 1 study. So it's roughly dose proportional. And we have yet valuate 20 milligrams per kilogram. We have done some things of doses to that. And once again, the CM-101 trail, one of the critical elements there. And one of the reasons we want to assess those three doses is to confirm do lead to increasing exposures, and to correlate that with clinical outcome. The second question that you asked was related last, last was related to SSc. There once we finalize the design, and so I think Dale mentioned we're going to have a special session to go through that trial design will provide at that time, once we know all the final details, the actual readout timing for that. And I think the second question you asked related to the safety data, we do not end that analysis will be blind. So we do not intend to have detailed descriptions on the safety data by group but we will once we actually perform that analysis and the DMC does that review, we will provide external information on what the safety data cut looks like to date.

[Jeff Jones:]

Great, thank you very much.

[Operator:]

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

[Kristen Kluska:]

Hi, good morning and good afternoon, everybody. Thanks for taking my question. First for PSC, can you help us walk through some of the timelines that you've cited here as it relates to enrollment cadence and number of sites you're hoping to have open and how you're thinking about this relative to what we've seen for other studies?

[David Weiner:]

Can you take that, Dale?

[Dale Pfost:]

Thank you, happy to do that. So yes, as you note, we are increased significantly increasing the size of the trial and consistent and actually even before that is being added, we have been adding significantly more effort into expanding the number of sites that were engaging on this trial, including the locations. So as we've mentioned before, we've expanded the EU, the US and those are ongoing processes now as we're building up additional sites, and that will continue as we amend the protocol. And to the point where we will get to a steady state level number of sites that should be sufficient to prosecute the trial, and enroll the roughly 93 patients. Our current timeline to deliver the top line data there in the second half of 2024, is based very much on that site expansion. And some of the historical enrollment rates in PSC that have been observed of late, obviously, in our desire, our hope to prosecute that to that metric, or even better, but that is one of the factors that leads to our guidance on the second half of 2024.

[Kristen Kluska:]

Thanks, I appreciate that. And same indication, PSC, I know you've done a lot of sequencing work. And obviously, there's been a lot of preclinical proof of concept as well. But understand is a very heterogeneous disease. There's a lot of comorbidities, particularly with IBD. So wanted to ask if you think that there are certain populations where CCL-24 as a target is more important than others? Or do you think just broadly across the board across the different patient profiles that this could be relevant?

[Don Marvin:]

Thank you, Dave, do you want to start that off? And maybe Barbara round that out?

[David Weiner:]

Yes. That would be great. So yes, and this initial trial, we are focusing on patients, as we mentioned, with large duck disease established disease, who do not have significant or active IBD. But you're absolutely correct. One of the key things that we are doing internally is whether that population is worthy, with CM-101. Right. So whether as we advance our efforts, we specifically conduct a smaller trial in patients who have that concurrent physiological process is something that we're in engaged in discussions currently, very much for the reason you stated, which is unlike a lot of the prior attempts in this disease that were focused mainly on cholestatic disease, the promise or the potential of CM-101 is broader. So it behoves [ph] us to explore that in the clinical setting.

[Barbara Lindheim:]

Yes, I can only add on that. Thanks, Dave. For that, given the anti-inflammatory effects of CM-101 By targeting CCL-24, one would expect to see actually an improvement in all those gastro comorbidities, IBD included, there is data even in the public domain that supports the role of CCL-24, in generally in IBD, and in ulcerative colitis, and Crohn's specifically, and we do think that this is definitely a route that should be assessed in the future.

[Kristen Kluska:]

Thank you.

[Operator:]

Our next question comes from the line of Nathan Weinstein with Aegis Capital, please proceed with your questions.

[Nathan Weinstein:]

Good morning, Dale and Chemomab team. Thank you for taking my questions. Just the comment first, it really feels like you're being very diligent and doing everything you can as an organization to give CM-101 its best chance across multiple indications. So I just had two questions. Firstly, around the Phase 2 studies, it really feels like the intention, then design is very safety focused. So if you just look out into the future for the clinical path forward, I mean, do you think we'd have to have another round of Phase 2 trials that were more efficacy focused before we start to think about moving into registration studies?

[Dale Pfost:]

Thanks, Nathan. Dave, you want to take that?

[David Weiner:]

Yes. So Nathan, it is on the indication of the design, you are correct. The focus the primary outcome of the trials, many trials at this stage are safety and tolerability. The foundation upon which we will build towards efficacy. With regards to PSC and this is a robust trial with large group sizes with a significant duration of treatment. Depending on the outcome there, that's a trial that we can move directly into what could be registrational trials, right, in efficacy, because it should give us sufficient information on relevant outcomes like pyramids [ph], and others that have been used previously, to direct molecules and to move directly into those larger studies. And as I'm sure you're those larger studies usually hinge on histopathological outcomes related to liver biopsy. So from PSC, I think we can move rapidly into what could be a definitive trial, we'll have to actually assess the data at the time and understand what both the regulatory and treatment landscapes look like. And think with SSc. Once we've that design, yes, we'll know a little better correct in that disease, then the next step after the trial that we're contemplating currently could be a proof-of-concept Phase 2 clinically oriented study. And I think the challenge is that disease heterogeneity, and the need for us to read out on a clinical outcome prior potentially to doing the larger registrational type trial. So it's a little bit of a mix, I think, in PSC, we could potentially move more rapidly and SSc data that will have to what the next steps will be.

[Nathan Weinstein:]

Thank you. Great. That's very clear. And then just one follow up regarding how the company continues to evolve. I know you recently made some key hires, I guess, what's just the overall confidence level? And you think you're going to have two of these mid stage studies in PEFC? and FSC? I mean, correct me if I'm wrong, running simultaneously, what's the overall competence in running two of those studies at the same time?

[Dale Pfost:]

I can start that off. And Dave, perhaps you could round it out? Yes, the organization has been developed very nicely over the last several months, and Jack Lawler has joined us in the clinical operations sides. And the team has been filled out very, very well. So we're very pleased with our abilities to execute on the trials, as put forward today. And the team is really the best I've worked with before. Very proud of the team and competent and our capabilities. Dave?

[David Weiner:]

Can confirm, Dale, we are specifically targeting those key hires for exactly that purpose, Nathan, which is to make sure that not only prosecute those trials, but we'll also be prepared to respond to them rather, and move the program forward with the appropriate staffing, so I'm confident as well.

[Nathan Weinstein:]

Okay, great. So thanks, again for taking my questions and appreciate the updates today.

[Dale Pfost:]

Thank you.

[Operator:]

[Operator Instructions] Thank you. At this time, I'll turn the floor back to management for closing remarks.

[Dale Pfost:]

Thank you very much for your attendance today. And I hope you've seen from our discussions and our presentation today that our competence in CM-101 is strong. And we see a great opportunity for us at Chemomab. The team is doing a great job. I'm very pleased with how the team has shaped up over the last year or so and building on the basis of the work that Chemomab did over a period of greatest part of the last decade or so. So thank you very much for your participation. We'd be happy to follow up with any of you individually as you see fit. And thank you very much for attending.

[Operator:]

This concludes today's conference. You may disconnect your lines this time. Thank you for your participation.