ERYTECH Pharma S.A.
Q1 2020 Earnings Call Transcript

Published: 13 May 2020

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the ERYTECH's First Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.I would now like to turn the conference call over to your host, Mr. Gil Beyen, Chief Executive Officer. Please go ahead, sir.

[Gil Beyen:]

Thank you. Good afternoon in Europe. Good morning here in the US. Hoping you're all well and safe and thanks for joining us for this Q1 '20 earnings call. It feels like we're in a different world compared to the previous call, mid-March. You will have seen it, we announced our business and financial update yesterday evening. You should be able to find the press release and the earnings presentation on our Investor Relations page of our website.Here today, with me joining in this call are Iman El-Hariry, our Chief Medical Officer; and Eric Soyer, our Chief Financial and Chief Operating Officer. Turning to Page 2, to the forward-looking statements. Want to draw your attention to the disclaimer and you see we highlighted the COVID, we provided an update recently and so, we are managing overall relatively or even well the situation, but obviously we continue to monitor very closely the potential for the impacts of the COVID. So, and then, I'll invite you to read the rest of the forward-looking statements obviously.On Slide 3, the Agenda. It's the usual routine. I will start with a business update, I'll hand over to Eric for the financial highlights in the first quarter. We then -- he will also summarize the news flow and the milestones and then we'll open up for Q&A very quick and all three of us will be available for the questions and answers.On the next slide, Slide 4. I think you all know this by heart, just for reminders, complete this quick reminder of who we are, the leading red blood cell company and obviously, focused on cancer metabolism, late stage fully operational manufacturing sites in Lyon and Princeton both producing for our clinical trials and indeed listed on Euronext Paris and NASDAQ. So, I don't think I need to remind further this slide. I go immediately to the heart of the matter, Slide 5, the TRYbeCA-1, I think you see that the main focus of this update. So, notwithstanding the COVID related challenges and we already announced it, that we're very pleased and proud to say that the trial has over the past weeks reached several very important milestones. So, we are well over 75% enrolled of the total approximately 500 patients to be enrolled.We had this second -- this third safety review by the IDMC, now on 320 patients and again, there was no safety signal highlighted and the trial continued as with recommendation was to continue the trial as planned. And then, indeed recently, we got this Fast Track designation, which we believe indeed is a nice confirmation of the unmet medical needs we are working on and that our clinical data so far are perceived as encouraging to address this unmet medical need.Now, indeed a bit further here, it's true that since early March -- mid-March, we've been very -- like all companies sort of bit surprised with this COVID outbreak. But we have been really focused and with the clinical teams and the investigators have done a tremendous effort to ensure the continuity of the trial, all while, keeping always yes, first priority the safety of the patients and the staff and our employees. We now have -- and the first priority in all of this is clearly been the focus on preserving the integrity of the already 370 patients in the trial. So making sure that these patients get their continued treatments, get the continued follow up. And I can say, we're succeeding well in this. It takes -- we continue to be able to manufacture and ship the products, candidates to the sites even in very difficult times and in countries like Italy and Spain, across the US also.And we have also put additional measures in place that can allow the best possible follow-up of the patients. So, that's the one part. The other is obviously the new enrollments. That's also continuing, but it is, as we mentioned at a slower pace than before the outbreak. That's why we announced an anticipated delay towards complete enrollment. We originally expected it and it was fully on track for full enrollment in this summer. But indeed, now we probably, we added three to four months. So we -- but we still think the full enrollment in the fourth quarter of this year. Now with more than 75% of patients enrolled in the trial, the interim analysis -- the interim superiority analysis can be conducted by the IDMC at two-thirds of the events.In fact, will not be significantly be delayed by this delay in enrollment of patients, the events, for the interim analysis will to a very large extent come from the patients already in the trial. But indeed and that we signaled also in the press release what we observed when preparing the database for the IDMC, blinded database is that the events that we have less events in the trial than we had originally anticipated, which indeed will have an effect on the interim analysis. And that's why we guided the interim analysis from end of Q3 to around year-end 2020. Just a quick reminder, this interim analysis is a superiority analysis. So there is no futility to outcomes or continuous plant or if we already hit the primary endpoint still distributed study for superiority.So that's about TRYbeCA-1. We have three other -- two other trials ongoing and one in the making. So that's on Slide 6. And here also, notwithstanding the COVID challenges that are affecting the trial, but we have not -- we don't have to change the guidance for these trials at this stage, at least, so TRYbeCA-2 is continuing. That is the Phase 2 study in triple-negative breast cancer, first line, it's continuing at the 17 sites, are opened in three countries and we -- although it is obviously, it was already slow and even it continues to be slowly enrollment right now. We still expect the data in 2021.The Nordic study, it's an IST, an investigator-sponsored study in second line ALL, is now very, very close to full enrollment of 50 patients in the trial and so now, we continue to expect to provide an interim update, it will not be really interim data but interim update on this study, still in this quarter. And we hope that the final analysis can be that the investigators will report the final analysis by the end of this year, the final results.And then, there is the third one, the Phase 1, also an IST in first-line pancreatic cancer. It's in Phase 1 to show safety in combination with FOLFIRINOX important to when they bring our aerial space product also to front line where FOLFIRINOX obviously is gaining a lot of brands. This study will I think is going on, will take place in the Georgetown Cancer Center, the sponsor of this trial. They have already received their IND approval and are preparing to get going. It's obviously the COVID is making a little bit delay there, but we still expect what we guided before that this trial can start in the second half of this year.So that's until here about the clinical trials, maybe, and then switching to Slide 8, quick word on the press release of yesterday, the evidence press release. So indeed, we are part of a European Horizon 2020 grant in the EVIDENCE Consortium. It's a consortium of leading experts in red blood cells. We're very proud to be part of it. It's not so much for the money, but for indeed the fact that we are sort of in this network of leading experts, working on better understanding how red blood cells are influenced by their extracellular environment and by physiological conditions, which is obviously very important for us as we -- as our ERYTECH's technology is based on this.So, this concludes the business update from my side. I'll hand now over to Eric to guide us through the financials and milestones for the next year.

[Eric Soyer:]

Thank you, Gil. And good morning to everybody [indiscernible]. So, I'm going to get continuing now with a few words on the financial highlights for the first quarter of this year and we are on Slide number 8 of the slide deck.My first preliminary comments is that unlike normal times, we're not providing today a P&L information for the quarter, with the COVID-19 situation and the reorganization of our accounting operation and teams which are working from home now. It was a bit challenging to combine total financial information of the usual days and also to organize the auditors' review, which are also in the remote session. So we will be able to provide the quarterly P&L information at a later time and as expected, we chose to focus already today, the key financial information on the cash position of course and cash utilization.So as of March 31 this year, a retake at the total cash position of EUR58.6 million, which is approximately $64.6 million and that's compared with the EUR73.2 million position at the start of the year. So this was a EUR14.6 million decrease in cash position in the first quarter 2020 and that was the result of the EUR15.3 million net cash utilization which was mostly comprised of a EUR16.7 million net cash utilization in operating activities. We also had EUR1.1 million used for investing activities and we generated EUR2.4 million in financing activities, which are mostly related to R&D loans in them. And at the same time, the variation of the US dollar against the euro led to a EUR0.7 million favorable currency exchange impact.I want to mention that the EUR14.6 million decrease in cash position in the quarter was fully in line with operating plan. We're still of course closely monitoring the budget impact of the COVID-19 pandemic on our operations, but at this stage we can confirm or previous guidance on sufficient cash position to fund operations into the first quarter of 2021. We are now moving to the next and last slide of the presentation, at Slide number 9 for a recap of the key news flow and milestones expected over the next 12 months.So I'm starting with the complete enrollment, an interim update on the Phase 3 trial -- Phase 2 trial, sorry, Phase 2 trial in second-line acute lymphoblastic leukemia. Again this study, which we call NOPHO, is an investigator sponsored trial and is conducted in the Nordic and Baltic country of Europe. We expect the interim updates in the current quarter, which is Q2, 2020 and the final results should be expected for the end of this year. But again, this is an investigator led trial. So we are not fully in charge of the timeline here.Next is the initiation of the Phase 1 study in first-line metastatic pancreatic cancer. So this is also an IST, an investigator sponsored trial in the US with the Georgetown Lombardi Cancer Center and we expect to start patient enrollments in the second half of this year. And finally, but certainly, most importantly as the company and value milestone for this year, is the interim analysis for superiority in TRYbeCA-1, the Phase 3 clinical trial in second-line metastatic pancreatic cancer.So, we expect this interim results towards the end of this year, with again as Gil mentioned two possible outcomes, either stopped for superiority if the primary survival endpoint is already met with only two-thirds of the events or we continue toward the final analysis, which is now expected in the second half of 2021.With that, I would like to thank you already for your attention. And we will now open the call for any questions you may have. Again, I would like to remind any of you who would like to ask questions in French, that's -- you are of course very welcome to do so.[Foreign Language] Operator Elizabeth, now, over to you.

[Operator:]

[Operator Instructions] And your first question comes from the line of Frederick Gomez with Pharmium Securities.

[Frederick Gomez:]

Yes, good afternoon, Gil. Good afternoon, Eric and thank you for taking my questions.

[Gil Beyen:]

I'm glad you're able to saw me, finally.

[Frederick Gomez:]

Yes. But just the end of the [indiscernible] speech. Two questions from my side. This Phase 3 is on track in pancreatic cancer with the interim plan end of the year. I was just wondering on the regulatory side, are you working on the FDA submission in a different way now that you have the fast track stages? I would like to know where do you stand on the CMC and in their -- in the preclinical module? And could we expect early next year, a kind of rolling submission in case of positive interim readout? And I was just wondering that maybe you can refresh a little bit in my mind that will those trends will be included in the dossier with the FDA, the one in Princeton and the other one in France for the CMC because the FDA should do an inspection of each site issued with the case. So I'm just wondering, how you are going to play with that?And the second question is on the stats for this study TRYbeCA, because we may assume that some patients included in the study will die of the COVID-19. So are you going to discuss the results and the mortality observed in the study with FDA, for instance? Thank you.

[Gil Beyen:]

Thank you, Frederick. I think Iman, suppose you can answer both of the questions.

[Iman El-Hariry:]

Okay, so good afternoon Frederick. So there are three questions, so one on the CMC and then the enrolling submission and then the stat component. On the CMC, yes, that this year will have -- will include both manufacturing sites in Lyon as well as in Princeton. And you are right, that FDA may decide to inspect one or both sites. On the second question, the enrolling submission, that's exactly the plan, with the Phase 2 trial, that will give us the opportunity to submit a part of the disease as they are ready and so it would allow the FDA to do this enrolling review as well. And that's exactly what we have been doing in the past different months, we're working on various modules of the daily, where they are not contingent or waiting for the outcome of the clinical trials. So as these modules become ready, we'll submit them so that would allow the FDA to start with their enrolling review.On the third question regarding the stats and the COVID impact is, since the beginning of the crisis, the FDA as well as several authorities in Europe, issued several notifications and guidance. So we have implemented immediately a COVID impact tracker, where we are tracking all the deviations around the COVID impact whether they are operational issues or whether there are issues that could affect the 50 or the 60 of that patients. And we will ensure in our statistical analysis plans which we will have to amend to add several sensitivity analysis. Basically, if we have patients who died or expected to have died due to COVID impact, we will add some censoring for those patients. And so, and we will look at the efficacy. I just wanted to remind you that the primary endpoint of the trial is based on the intent to treat. So that will be old patients, regardless whether they died of COVID or not, regardless whether they have received any study treatment or not. But in sensitivity analysis, this is one we're going to look at this is if we censor those patients with potential death due to COVID. So, these are the three points that you list.

[Frederick Gomez:]

Okay. Thank you, that's clear. I can go back in the queue. Thank you.

[Operator:]

And your next question comes from the line of Philippa Gardner with Jefferies.

[Philippa Gardner:]

Hi guys, good afternoon. Just a couple of questions from me please. For you, Gil, just coming back to one of your comments that you said at the last safety review, you noticed that there was a lower number of events. I guess, is that the first time that you've noticed that when you've been compiling the reports for the other safety reviews and if so, does that mean that something has changed between those reviews or with the other ones just based on too few patients sort of come to any conclusion?And then my second question is, could you just tell us when the interim is conducted, is the trial -- if it's decided that the trial should just continue as planned, what level of information do you actually get from the review committee at that point, do you get any details on the data or do you remain completely blinded to what the outcome was? Thank you.

[Gil Beyen:]

Okay. Thank you, Phillippa. So on the first question, it was -- it's in fact now that we had the IDMC, was now in 320 patients. It was for the first time with sort of it was sort of enough view on the events that this was sort of put forward. So it was, it doesn't mean that there is at least any one can comment further doesn't mean that, that sort of has a change lately but it's just that there was enough data to get a good view and on sort of the time through events in average.For the second part, I'll refer to Iman as well.

[Iman El-Hariry:]

Good afternoon, Phillippa. I think no additional comments on the first point around the number of events, on the second point, we will remain blinded is the outcome of the IDMC review is to continue the trial to completion. So we have absolutely no clue what information they have seen. So, that would be the case. Nothing, so that there -- when we meet with IDMC, they were business pillars. At this stage, we would recommend the study to continue until completion and that would be it.

[Philippa Gardner:]

Okay, that's very clear. Thank you.

[Operator:]

And thank you. The next question comes from the line of Ingrid Gafanhao with Kempen.

[Ingrid Gafanhao:]

Well, hi, thank you for taking my question. I actually have two of them. Both on the investigator-initiated studies. So appreciating that you have limited information on those. Can you remind us what was the motivation of the investigators to initiate the ALL trial? And what do you believe will be their goals as to this kind of results? And the second question is on the trial that is evaluating every state in the first line pancreatic cancer. So let's say, in that case, even if the second line, if you see the second line is not giving you the favorable result. Using every state first, could you expect anything different on bringing every state into first line, would there be any added advantage to that?

[Gil Beyen:]

Okay. Hi, Ingrid. Good afternoon. And I'll start and let Iman to complement, but on the first, on the ALL study, indeed the NOPHO study is the clinicians who came to us of the Nordic and Baltic countries. So this -- the Nordic organization of Pediatric Hematology and Oncology. They are doing many, many trials in ALL for example. And here, specifically the issue is, patients who develop allergies to the first-line treatments, to the E coli asparaginase, the Oncaspar. When patients develop this allergy, they can or abandon treatments with asparaginase but that's known to be detrimental, decelerated, it is known to be important to continue on asparaginase. Or they will be treated with Erwinase; Erwinase is an order form of asparaginase. So, Erwinase has -- it's a complex product, it needs 12 injections per month.There are also lately but it was -- that's lately, that was not yet the case when we started the study as supply issues, shortages. But clearly, these clinicians who wanted to see whether it would make sense before going or instead of going to Erwinase, to continue treatment on E coli asparaginase but indeed then in an [ph] escalated form, because we have seen in our previous studies that even in patients who had prior allergies to E coli asparaginase that we were able to continue treating them without development of allergic reactions. And that's really the rationale behind the study there. The study was originally set up to evaluate 30 patients, in these, in about 20 sites. And based on, I think we have had a request, six months ago to extend the enrollment to 50 patients. And now we are very close as I said to 50 patients in this study.So, I hope that answers your first question and your second question is a good one indeed. So, it's really the move to front line is basically obviously planning for success. It is under the assumption that we can confirm what we've seen in second line and that we broaden the indication to first line. So to your question, would it make sense to go to first line, if we don't see it in second line, I think it will be a challenge. But I would not exclude it. Obviously it is -- it will all depend on obviously what we would see in the second line study. I'll leave it to you. Maybe, I don't know Iman whether you -- I missed something whether you want to complement on this.

[Iman El-Hariry:]

I have -- I think, Ingrid, you also asked, what would be the goal for the ALL trial and NOPHO trial and so the goal you -- this study is just like any other study or evaluating an asparagines in this disease. So this study is evaluating the asparagines activity in patients who have developed hypersensitivity actions to prior asparagine therapy essentially Oncaspar. So it will be primarily a pharmacokinetic as well as pharmacodynamic endpoints. So, that is -- this is the primary goal of the trial. On the second one, the IST in first-line do not only clean the first line so it is the -- offline [ph] for success in the market. But also learning from other diseases, that would be a failure in the second line setting. Doesn't mean that a certain drug cannot work in an earlier disease setting.So that's number one and number two, is the combination with FOLFIRINOX which is interesting and it's also a regimen, or a combination, a chemo regimen that can be applicable in other GI tumors. So, that can have also an impact if we would like to go beyond the pancreatic cancer.

[Ingrid Gafanhao:]

That's very clear. Thank you.

[Operator:]

Thank you. And your next question comes from the line of Ren Benjamin with JMP Securities.

[Ren Benjamin:]

Hey, good morning guys. Thanks for taking the questions. I have a couple, maybe just starting off with the IDMC review. Can you talk a little bit about the push-out of the interim results, I guess, there are different ways to kind of look at it obviously the very positive ways that the treatment arm is having a significant impact, are there are other scenarios that could result in this pushing out of events? And have you looked at the impact of, whether it's COVID or other things in terms of getting the appropriate analysis or I guess, data from the patients that are currently in the study.Could that be impacting the push out or do the IDMC make this decision based on kind of a complete, full dataset? And I guess just related to that, when is the next IDMC meeting?

[Gil Beyen:]

Iman, I think both or all three questions for you?

[Iman El-Hariry:]

Okay, good morning. And how are you? So on the scenarios for delayed events, the most obvious scenario is there is a good delta between the footshold and the AFSR and so patients are living longer and so this is why we have a lower number than anticipated. It could also be potentially -- and no one knows really, it could be a combination of perhaps the median survival or the patients in both control arm and active arm are also longer, but still with a delta between the two treatment arms.And that's the second scenario. The third scenario, which we are still working based on to get, whether we actually -- some of these delayed events is simply because we don't have all the data, and it could be one of any combination of above. Yes. It is some of these events have not been introduced in the database, again because of the COVID impact, it could be any of the above or a combination of any of these three scenarios.On the COVID impact, the IDMC did not ask for that. IDMC reviews only 50 information, they don't have access at all to any efficacy data. This is based on the agreed charterer with the IDMC and so, they would only look at the efficacy at their plans to interim analysis at end of the year. And at that time, yes, they -- we will agree with them on what information they would like to see in the tables beyond the survival in the ITT population. And the next IDMC, it will be a separate review and this would be planned again six months around October timeframe.

[Ren Benjamin:]

Terrific, thanks for that.

[Iman El-Hariry:]

Does this answer to your answers -- your questions?

[Ren Benjamin:]

Yes, it did. Thank you very much. And then just as a follow-up. Thinking about the Phase 2 IST ALLL results, when we think about an interim update versus final update what would be -- what should we be expecting from this interim update? Is it just on the first sort of 30 patients, should we be expecting response rates or primarily safety? How should we be getting ready for this?

[Iman El-Hariry:]

Do you mean the NOPHO trial?

[Ren Benjamin:]

Yes.

[Iman El-Hariry:]

I see. Okay. Gil, do you want to take this or shall I take it?

[Gil Beyen:]

Go ahead, it's all right Iman.

[Iman El-Hariry:]

Okay. So the interim update, it's basically, we don't expect to provide a quantitative sort of data. This is an investigator initiated trial that investigator is extremely keen to preserve the integrity of the study for future publications. However, they will have conducted the full interim results in terms of the 60 and as I said earlier, the primary endpoint of the study is Pharmacokinetic which is kind of an efficacy endpoint. So they will have analyzed the primary endpoint as well as safety. So they will have -- they will know the information and based on the information that they become aware of, they will -- basically they will be happy for us to communicate with our -- the trial is shown but it's expecting to be showing. So yes, it will be on the primary endpoint as well as in the safety.I think the plan to provide full data is something that we'll have to discuss with the PI and we and such is the one who is in the driver seat. We will have to agree with what she would like us to and to provide to in the public domain.

[Ren Benjamin:]

Got it. And just as a follow-up to that, assuming that PK-PD is spot on exactly where you want, what would be the next steps for a program like this, outside of an IST? So from a corporate perspective, is there, what's the future for this product in ALL?

[Iman El-Hariry:]

Okay. Thank you for question or you will take it?

[Gil Beyen:]

Maybe I'll start and then you can come. But yes, I think what we see clearly is -- it's a small part of ALL. But it's in high unmet need that patients who are doing relatively well are typically on Oncaspar and then also develop these hyper sensitivity and cannot continue treatment. They would get Erwinase. But as I mentioned Erwinase has shortage issues, has many injections per month, 12, is very expensive also. So we think that indeed, could be a business opportunity to continue in this indication and the whole question will be, that will depend on the data whether it can be on the data that we will have and the previous data we've had in it, remind that we have had a lot of good data in ALL already.It was not good enough to get an approval in relapse and refractory ALL. But that was for different reasons. So here in this high unmet need, with a study, with, who have 50 patients and then a lot of other data in ALL, we hope that can bring us to [indiscernible]. Yes, to help these patients with this indication, but again it will depend on what we see in the results.

[Ren Benjamin:]

Terrific, thanks for taking the questions. And I'll get back in the queue.

[Operator:]

[Operator Instructions] And your next question comes from the line of Boris Peaker from Cowen.

[Unidentified Analyst:]

Hi, this is Cynthia [ph] on for Boris. Thanks for taking our questions. Good afternoon. So just a brief question for me, for TRYbeCA-1, can you provide us more details on how patient follow-up is going with COVID and I think you mentioned in the remarks some additional measures you are taking to preserve study integrity, can you give us more context on what those measures are and what that looks like?

[Gil Beyen:]

Iman, I think that's for you.

[Iman El-Hariry:]

Okay. Hi, hello Cynthia. So what we are doing basically, first of all, in this clean, the real challenge for any clinical trial including TRYbeCA-1, most study coordinators are working from home, but they have access to the electronic database. So they will -- they manage the patients efficiently from home and then go to the site when a patient is scheduled for treatment. So that is the -- this is the challenge in terms of on the operational front for ERYTECH is also the CRO for all external visitors to every single hospital that we are working with, are basically being prohibited. So again, that our CRO access the data we're looking. So what we did at the beginning of this crisis, we think, give investigator letter to all our investigators and project coordinators and basically trying to make sure what strategic condition that they need to make sure it is in the system to be able to make judgment calls and for patient management.So we put that in place. We also encouraged the size towards the CRO, again, on all the electronic or remote data access, which actually worked very well. And then number three, we're prioritized what information in terms of, for example, with the CRO, if you have 10 sets of information that needs to go into the database or for cleaning or for sending queries which one will be critical on the ongoing basis again for, to ensure that the patient's -- and their treatment is improved. We have allowed the size to share to different local labs for instance for the 50 evaluations, the lab test, blood counts chemistry, et cetera.To put all of these measures in place, and in the meanwhile, we initiated and also we encouraged the investigators as well as everyone in their teams to reach out to us directly for, if there are any particular issues that they need that immediate response. And I continue with this, what we have assumed particularly at the beginning of April, which is basically the hit of the crisis everywhere. We had the non-stop communication with all sites for different patients issues. We created also a case report for captures or potential issues regarding deviations and so that can help us when we work on the statistical analysis plan, as well as the evaluation of the safety in other trial outcome, when we come to that stage. So this has been distributed to all sites. Thus, CRO's working with all sites on that front. So, these are the measures that we have taken and put in place.And what we are seeing is that, so far, we see, minimal, absolutely minimal impact on the patient treatments, patient efficacy evaluation. So we feel action actually very pleased with that. But I think we try to even go to the bare minimum of such evaluations to make it easier for the site and the remote support for different patients.So, I hope this answers your question.

[Unidentified Analyst:]

Yes, that's very comprehensive and clear. Thank you so much.

[Operator:]

[Operator Instructions] And there are no further audio questions in the queue at this time, I will now turn the call back over to Mr. Beyen.

[Gil Beyen:]

Thank you, Elizabeth. Thank you all. Thanks for your participation, your attention and the good questions and obviously for your continued support of ERYTECH. We will keep you updated on our progress, as for the remainder of the year, obviously. Thanks again. Thanks for joining and I wish you a great day.

[Operator:]

Ladies and gentlemen, this concludes today's conference. Thank you for participation and have a wonderful day. All participants may now disconnect. And speakers, please hold one moment.