CohBar, Inc.
Q1 2021 Earnings Call Transcript

Published: 17 May 2021

[Operator:]

Good afternoon. My name is Hillary and I will be your conference operator today. At this time, I would like to welcome everyone to CohBar's First Quarter 2021 Financial Results Conference Call. All lines have been placed on mute to eliminate background noise. The question-and-answer session will follow the formal presentation. Now, I would like to turn the call over to Jordyn Tarazi, Director of Investor Relations at CohBar.

[Jordyn Tarazi:]

Thank you, Hillary, and thank you everyone for joining CohBar's first quarter 2021 financial results conference call. Joining me on today's call is Joe Sarret, CohBar's Chief Executive Officer; Ken Cundy, CohBar's Chief Scientific Officer; and Jeff Biunno, CohBar's Chief Financial Officer.

[Joe Sarret:]

Thank you, Jordyn, and thank you everyone for joining us this afternoon. I'm delighted to be joining you on the first quarterly earnings call since my recent appointment as CEO of the company.

[Ken Cundy:]

Thanks, Joe. I'll now give a brief update on our most advanced research and development programs starting with the 4211 clinical program for NASH and obesity. We're currently in the final stages of the Phase 1a/1b clinical study. As a reminder, the Phase 1a part of the study was a single ascending dose, multiple ascending dose study conducted in 65 healthy subjects to define the appropriate dose.

[Joe Sarret:]

Thanks, Ken. That was a great overview. I'd now like to ask our CEO, Jeff Biunno to walk you through our financial performance last quarter. Jeff?

[Jeff Biunno:]

Thanks Joe. I will now provide you with a summary of our financial results for the first quarter ended March 31, 2021 compared to the first quarter ended March 31, 2020. Total operating expenses in Q1, 2021 were $4.013 million as compared to $3.281 million in Q1, 2020 an increase of approximately $732,000. Operating expenses included noncash expenses of $357,000 for the quarter ended March 31, 2021 and $927000 for the quarter ended March 31, 2020. Net of the noncash expenses total operating expenses in Q1, 2021 were $3.656 million as compared to $2.354 million in Q1, 2020 an increase of approximately $1.302 million. Noncash operating expenses include stock-based compensation and depreciation and amortization costs. Research and development expenses were $2.655 million in Q1, 2021 compared to $1.450 million in the prior year period an increase of approximately $1.205 million. The increase in research and development expenses was primarily due to the timing of the costs incurred related to our clinical trial and the continuing development of our peptides. Those increases were pretty offset by a decrease in stock-based compensation costs. General and administrative expenses were $1.359 million in Q1, 2021 compared to $1.832 million in the prior year period, a decrease of approximately $473,000. The decrease in general and administrative expenses was primarily due to lower stock-based compensation costs in the current year period. For the quarter end March 31, 2021 CohBar reported a net loss of $4.038 million or $0.07 per basic and diluted share compared to a net loss for the quarter ended March 31, 2020 of $4.218 million or $0.10 per basic and diluted share. Net loss included noncash expenses of $371,000 for the quarter ended March 31, 2021 and $1.816 million for the quarter ended March 31, 2020. Excluding the noncash expenses CohBar's net loss was $3.657 million for the quarter ended March 31, 2021 as compared to $2.402 million for the prior year period. Moving to the balance sheet. As of March 31, 2021 CohBar had $17.8 million in cash and investments compared to $21 million as of December 31, 2020. The cash burn for the quarter ended March 31, 2021 was approximately $4.2 million. During the quarter ended March 31, 2021 CohBar received proceeds of approximately $1 million for option and warrant exercises. We estimate that based on our cash and investments balance as of March 31, 2021 we have sufficient capital to finance our operations through the first quarter of 2022. I'll now turn things back over to Joe. Joe?

[Joe Sarret:]

Thanks Jeff. I'd now like to highlight some key upcoming milestones events to watch out for during the remainder of 2021. First, as we've mentioned we expect top line data from our Phase Ib trial of CB4211 in NASH and obesity in early July. Once we've had the opportunity to analyze those data, we will be able to finalize plans for the next phase of development for 4211 including the necessary activities to enable a Phase II study. A key part of that process, assuming positive data, will be to secure additional funding, including through stepping up our partnering efforts. Second, we will continue our ongoing work to complete the IND-enabling studies for CB5138-3 for idiopathic pulmonary fibrosis. Our goal is to be able to file an IND in 2022 providing us with a second clinical stage program. And finally, assuming adequate funding, by the end of the year we also plan to select a third clinical candidate to progress towards IND-enabling studies. As I mentioned throughout my remarks, we believe that CohBar has just scratched the surface of its potential. While we are well on our way to developing a robust pipeline of peptides, our focus now is ensuring that we have the necessary capital to enable continued execution that can turn that tremendous potential into reality. As a result, we continue to evaluate the range of financing options available to us including non-dilutive funding opportunities. Before opening up to questions, I would like to reiterate how excited I am to be joining CohBar. In my short tenure with the company, I've been extremely impressed by the dedication and commitment of the CohBar team. I would also like to thank our shareholders for their continued support and I look forward to the opportunity to meet with you over the coming weeks and months. Operator, can you please open the line for questions.

[Operator:]

At this time, we will be conducting a question-and-answer session. Our first question is from Kumar Raja of Brookline Capital Markets. Please state your question.

[Kumar Raja:]

Thanks for taking my questions. With regard to CB4211, once you have the data in July, what would be the time line to start a Phase 2 trial? Are you guys thinking about a 12-week or a 16-week trial? And also are you guys planning to include a GLP-1 agonist combination in the Phase 2 trial? Thank you.

[Ken Cundy:]

Right. I'll take that question. Kumar, good to hear from you. This is Ken. Yes. So our plans obviously depend on the outcome of the Phase 1b study with respect to the results. So we will be looking at those analyzing the trends. Preparation for Phase 2 will depend on the outcome of that study and on completing other activities required to prep for Phase 2. Part of that as well of course, is securing additional funding whether that's through partnerships or through another means of fundraising. But our goal would be to complete the prep activities to support a Phase 2 study to start the Phase 2 study in 2022. As far as your second question about design, yes, I think it's likely of the choices between 12 and 16 weeks, that a 12-week study would probably be sufficient. But again, we would not settle on that design until we have data. And I've had a chance to discuss that as well with our advisers in designing the next study. It's very likely I would say that, we would want to include diabetic subjects that are on a GLP-1 agonist in that study as it does take advantage of the known synergy between CB4211 and that class of drugs. But again, that's a design question that will obviously be answered once we have the data and get into that further discussion. I hope that answered your question Kumar.

[Kumar Raja:]

Yes. Thanks. And with regard to IPF, can you directly go to the IPF patients, or how much of healthy volunteer data would you need before moving to the IPF patients? And how are you guys thinking about dosing there based on the animal models? Thank you.

[Ken Cundy:]

Yeah, that's a good question Kumar. So for IPF there are options here. So again we're in discussions now with our advisers around the best designs for an early proof-of-concept. One approach you may be familiar with some of the other drugs out there in the IPF space has been to do an adaptive study where you begin in healthy subjects and then move to IPF subjects fairly early on with the intent of demonstrating a change in biomarkers as some proof of activity rather than a longer-term change in lung function. So those are all factors we're taking into consideration here. We do not yet have a final say on the design for that first clinical study, but it's something we're currently discussing with our advisers.

[Kumar Raja:]

Okay, great. Thanks.

[Operator:]

Our next question is from Jason McCarthy of Maxim Group. Please state your question.

[Unidentified Analyst:]

Hi, everyone, It's Azib on the line for Jason. Thanks for taking my question. And Joe congratulations on your appointment as Chief Executive Officer. Just wanted to see if you plan on expanding any of the clinical trial sites to outside the U.S. or if you have any intention of meeting with ex U.S. regulators?

[Joe Sarret:]

Yeah. With respect to 4211 if that was your question for the next clinical study, I think we would definitely be considering broadening the locations to do a large enough 12-week study in the setting of NASH. We'll be pushing resources out beyond just the few U.S. sites that we might engage. So I think that is clearly a consideration. But again we have not decided yet on the clinical study design for Phase II. And so the number of sites would be part of that equation.

[Unidentified Analyst:]

Great. Thanks for the additional color. And regarding -- this is a little down the time line here. But regarding a future potential Phase II study, could you maybe shed any color on what potential end points on those would be if you have maybe histopathology end points that you could briefly go over?

[Joe Sarret:]

Again I think it's a little early to give you full details on what the plan is there because we're still developing that. But the obvious inclusions would be at a minimum what is required by FDA for pivotal studies just because we want to know in a Phase II setting if we are likely to have a predictable outcome as we move into Phase III. So histopathology biopsy-driven NASH would be a key component. I think MRI-PDFF is gaining ground as far as its acceptance of being a predictable measure of likely NASH outcome. But as far as the biomarkers that really will depend on what we see out of the Phase Ib study as to whether we think any of those could also be argued to be predictive. So a little early yet in that process. The data I think are critical to that discussion.

[Unidentified Analyst:]

All right. Thanks for the additional color. I appreciate the insight.

[Joe Sarret:]

Sure. Thanks.

[Operator:]

Our next question is from Steve Brozak of WBB. Please state your question.

[Steve Brozak:]

Thanks for taking questions. And I'm specific on more color as to everything we're looking at for the long hauler side shows not one fibrotic event, but multiple fibrotic events. Can you give as much color and specificity as to what you would look at as far as potential peptides and what the answers would be that CohBar might present in dealing with each of these specific insults and as much detail as you can give would be really appreciated. Thank you.

[Joe Sarret:]

Yes. Thanks Steve for the question. So now this really is a big question right, because this is a new emerging population here with COVID long haulers that are now manifesting with not just the expected consequences of a short-term acute respiratory distress induced by a virus, but they are developing prolonged fibrotic events, thrombotic events things that are only now becoming known. I think we have an opportunity here, because COVID is a disease of many different outcomes in terms of the sequelae. And if those include fibrosis we have peptides that we know have strong antifibrotic activity. So there's an opportunity there where these might be used in the setting of COVID long haulers. There's also the question of whether you can preempt a lot of that damage in the early stages if you're treating around the time of the infection to prevent the downstream effects of the damaging signaling caused by the cytokine storm and inducing thrombosis at that stage. And that's where our Apelin agonist peptides the 5064 analogs are interesting and potentially useful. So that's why that's important that we continue to pursue that program for ARDS in general, but are also very much interested in working with NIAID to get that into the realm of testing for COVID as well. So I think there's many possibilities there across our programs that could have an impact on the long haulers. Does that address your question there, Steve?

[Steve Brozak:]

Yes. No, no. Thank you very much. Appreciate that. And thanks again for taking the question.

[Joe Sarret:]

Thank you, Steve.

[Operator:]

Our next question is from Nathan Weinstein of Aegis Capital. Please state your question.

[Nathan Weinstein:]

Hi, Joe, Ken, Jeff and Jordyn. Thanks for taking my question. We've been excited about how many MVPs -- you stated over 100 of them. I guess, how many of them would you say are well characterized enough to the point where you could see them sort of in a preclinical stage or start to move towards the IV studies?

[Joe Sarret:]

Yes. That's a great question, Nathan. Thanks for the question. So what we have effectively is a large library of MVPs and a very large library of analogs that we have discovered and patented around those sequences. As far as what we know about them as Joe mentioned in the call right, we're scratching the surface here. So once we put resources into a program, we uncover things we did not expect about their potential utility disease indications that they might be useful for. So that really is exemplified by the recent discoveries right around the Apelin agonist program, the inhibitors of CXCR4. We believe there are many other opportunities like this in the portfolio. I think it's a question of time and resources to dig deep enough to find those. So I think it's difficult to say how many we think out of 100 are going to translate into preclinical opportunities. But I think you can see from what we have so far that it's going to be not just a few, there will be more. And the more resources we have the more we can obviously identify those additional ones.

[Nathan Weinstein:]

Great. Thank you. That makes sense. And I just have one follow-up question on sort of the other side of things. On the business development side, really, when you think about just philosophically on partnerships, at what time in the development cycle do you think you might be willing to engage with a potential partner?

[Joe Sarret:]

Yes. Thanks for that question. This is Joe. That's a key thing that we're always sort of evaluating when looking at different programs, is what's the right timing. We think that it's important to start discussions early to get potential partners familiar with our programs and the company has certainly done that so far. And the answer really depends, I think, to a certain degree on a program-by-program basis. We're certainly, as Ken referenced and as I think I mentioned also in my earlier remarks on 4211, now that we've -- we'll soon have completed the Phase Ib study. We think that's a good time to engage more seriously with partners about potentially forming a partnership to further progress that program. With other programs, there's certainly been interest in some of the earlier stage programs, including the fibrosis program. And there we're kind of evaluating sort of the pros and cons of continuing to progress that on our own, derisking the program and getting ideally better terms at a future date versus taking that early partnership now. And so that really depends to a certain degree on sort of the tenor of those discussions, but that's sort of the calculus that we're going through. But we think that, in the near term, 4211 is again assuming good data in July is our nearest term sort of partnering opportunity.

[Nathan Weinstein:]

Got it. Thanks for sharing some more color there and looking forward to the Ib results and all the other updates from CohBar through the balance of the year. So, thanks again for taking my questions.

[Joe Sarret:]

Thank you.

[Operator:]

Our next question is from Michael Morabito of Chardan Capital Markets. Please state your question.

[Michael Morabito:]

Hi, team. Thanks for taking the questions. First, I just want to ask since you had the update that you enrolled 23 subjects, because three had dropped out. Are you able to provide any color on why those three patients have dropped out, if it's a safety concern or if it's just a lost follow-up? And also, we have the top line data coming in July, but do you know when we can expect the full data, if that will be at AASLD this year or later?

[Ken Cundy:]

Michael, thanks for the question. Yes, on the first one, so the three dropouts, two of those were actually tested positive with COVID-19 in the middle of the study. So they had to be discharged from the study regardless of anything else, just from having a positive COVID. The third one actually withdrew consent early in the study for personal reasons. So these are not safety-related dropouts. These are just the subjects we lost in the process and therefore made steps to replace them to have enough for the original target of 20. Now with respect to the expectations for top line data, we'll have in the July time frame the safety and activity data. It may be a little bit later that we'll have pharmacokinetic information. As far as digging deeper, it depends really what those data look like and what we might be presenting at AASLD or elsewhere later in the year. So too early to kind of parse that out. But I think as soon as we see the data, we'll have a good sense then of what else there is to dig deeper into and what our timing will be for release of additional information.

[Michael Morabito:]

Okay. Thanks. And a follow-up on 5138-3, you've made a point to mention other fibrotic diseases in addition to IPF. So beyond IPF, what would be the plans next indication after IPF? And how soon after starting an IPF clinical trial do you think you can make a second indication move into the clinic?

[Ken Cundy:]

Yes. Good question. The first step in that is providing ourselves proof-of-concept in the preclinical setting for the program working in various fibrotic settings. So as I mentioned, we have the plan here to generate data in the NASH setting in the systemic sclerosis setting and also in the kidney fibrosis setting. Now which of those might be prioritized as we go deeper I think will depend on what data we see. What else has to be done to move those to an IND stage as far as being ready to support an initial clinical study in a new indication. So, I think, we'll be able to tell you more about that as the data emerge. Clearly there's a lot of opportunity here in the fibrotic settings and not just the three that I mentioned there, but others we're also considering. So I'd say that's going to be data driven and we'll update you as we go.

[Michael Morabito:]

Okay. Great. And just one last question. I'm sorry my screen just scrolled at me. So with the NAFLD study ending and IPF moving towards IND, this quarterly cash burn was $4.2 million cash through first quarter of next year. But kind of model had cash burn ebbs and flows throughout the year as one study winds down and another move toward the clinic? Should we expect it to be roughly flat across the year, or do you think that we'll see hills and valleys?

[Jeff Biunno:]

So Michael, thanks for the question. It's Jeff. You probably want to see a front-loaded cash -- use of cash in the first in the next couple of quarters. And then it will tail off a bit because we got some increased costs coming up from the trial in the next quarter. So you probably want to model it a little higher in the next two quarters a little lower on the back end. But overall if you ever wanted to you could just straight line it and then add back some non-cash expenses if you want to get back to an accrual basis.

[Michael Morabito:]

Okay. Excellent. Thank you all for the answers and I look forward to speaking with you more soon.

[Jeff Biunno:]

Thanks.

[Operator:]

We have reached the end of the question-and-answer session. I will now turn the call back over to Joe Sarret for closing remarks.

[Joe Sarret:]

Thank you for everyone for joining us this afternoon. We look forward to updating you on our continued progress on our next call. For those of you who will be tending the virtual bioconference in June, we look forward to seeing you there. Operator, would you please conclude the call?

[Operator:]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.