NeuBase Therapeutics, Inc.
Q4 2016 Earnings Call Transcript

Published: 23 Dec 2016

[Operator:]

Greetings and welcome to the Ohr Pharmaceutical Company Fourth Quarter and Full Year 2016 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to your host Mr. Brian Ritchie of LifeSci Advisors. Thank you. Mr. Ritchie, please go ahead.

[Brian Ritchie:]

Thank you, operator. Good afternoon, everyone. After the market today, Ohr released financial results and provided a business update for fiscal year ended September 30, 2016. If you did not yet receive the release, it is available on the Investor Relations section of the company’s website at www.ohrpharmaceutical.com. This call is being webcast and a replay will be available. Before we begin, I would like to remind you that some of the information contained in the news release and on this conference call contain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words of expression reflecting optimism, satisfaction with current prospects as well as words such as believe, intend, expect, plan, anticipate and similar variations identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Such forward-looking statements are not a guarantee of performance and the company’s actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the company’s 10-K, 10-Qs as well as additional filings with the SEC. These forward-looking statements speak only as of the date of this release and the conference call and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. Participating in today’s call from the company are Dr. Jason Slakter, CEO, Mr. Sam Backenroth, CFO; Dr. Avner Ingerman, Chief Clinical Officer. With that, I would like to turn the call over to Dr. Slakter. Please go ahead, Jason.

[Jason Slakter:]

Thank you, Brian. Good afternoon and thank you for joining us today. 2016 overall has been a very productive year at Ohr and we have been very successful in advancing our lead development candidate, topical Squalamine for the treatment of wet AMD. We now have a comprehensive Phase 3 program underway being conducted under a special protocol assessment from the FDA. We have also made progress advancing our preclinical pipeline of sustained release drug candidate we are developing for ophthalmic indications. As you know, we conducted a Phase 2 study with Squalamine enrolling treatment-naïve wet AMD subjects with all lesion characteristics, sizes and a wide range of visual acuity, subject to receive topical Squalamine or placebo drops twice a day, along with a single Lucentis injection at baseline followed by PRN Lucentis injections for the nine months of the study. The data demonstrated a visual acuity benefit in favor of combination therapy in all measures of visual function. When looking at new therapeutic treatment paradigm like Squalamine combination therapy, it is important to keep in mind that wet AMD is a multi-factorial disease with a complex vascular biology. This results in the development of neovascular lesions that vary by location, growth pattern, degree of exudation and response to treatment. We classified these lesions by fluorescein angiography as classic-only, occult-only and mixed lesions. Occult-only lesions represent nearly half of the wet AMD cases seen today. Over the past decade with anti-VEGF monotherapy, lesion characteristics have not played a role in guiding treatment. With the introduction of combination therapy, however, understanding the vascular biology is critical in proper selection of patients be treated with various agents. Classic neovascularization, which are rapidly growing in less mature vessels are responsive to anti-VEGF therapy with reduction in leakage and vascular involution in some cases. These classic vessels maybe further impacted by combination therapy, but it is occult CMV that is the primary target of combination therapy. These occult vessels are more resistant to anti-VEGF therapy which reduces vascular leakage, but has little effect on the vessels themselves. These slow growing more mature occult vessels located beneath the RPE may present with symptoms after months or years of growth and require more than just an anti-VEGF agent to achieve maximal and long-lasting visual gains. Based on our understanding of the mechanism of Squalamine combination therapy and combination therapy in general, we took a deeper look at the results of the Phase 2 trial. Squalamine combination therapy resulted in improved visual acuity outcomes compared to Lucentis monotherapy with the vision gains driven by the size of the occult CMV at baseline irrespective of whether the lesion had a classic CMV component. This correlation was not seen with Lucentis monotherapy treatment. Patients with occult CMV less than 10 square millimeters had consistent positive visual gains with Squalamine combination therapy. This is supported by the vascular biology and mechanism of combination therapy. Furthermore, this lesion type represents about 75% to 80% of the patients seen in clinical practice today. This data was first presented at the American Academy of Ophthalmology Annual Meeting in November 2015 by Dr. David Boyer, one of the investigations in that Phase 2 trial. Looking more closely at the Phase 2 data, we found that in those patients with occult CMV less than 10 square millimeters, they were greater visual gains with Squalamine combination therapy with a 5.3 letter mean acuity benefit over Lucentis alone at 9 months. With Squalamine combination therapy, there was a 54% increase in the proportion of patients being able to achieve gains of three or more lines in vision versus Lucentis monotherapy. A key finding in our study which was presented for the first time at the Annual Meeting of the American Society Retina Specialists in September of 2016 was the ability to drive patients to better vision outcome. Subjects treated with Squalamine combination therapy achieved a final mean visual acuity of nearly 72 letters or 20/40 is now an equivalent. Topical Squalamine used with anti-VEGF treatment offers the potential to provide an improvement in quality of life greater than that achieved with anti-VEGF monotherapy. These analyses had important implications of the Squalamine registration program, because with this information in hand, we were able to optimize patient selection for the Phase 3 development program. This allowed us to design trials which enroll those patients with the highest likelihood of significant visual acuity gains with Squalamine combination therapy. We believe that our understanding of the vascular biology of this disease, the detailed analyses of the Phase 2 study and other de-risking measures that we instituted for the Phase 3 program that put us in a prime position to be successful where other programs have failed. In March, we came in an agreement with the FDA on a special protocol assessment and initiated enrollment of the first of our Phase 3 trials in April. As we have previously stated, our goal is to find a strategic partner to collaborate with us on the further development and commercialization of Squalamine. Discussions with potential partners are ongoing and we continue to make progress in these discussions. We look forward to updating you when we have further news. Now, to the development work we completed during the year on our sustained release technology. We achieved two important milestones on these programs during the year. The first was successful in vivo proof-of-concept study with OHR3031 which is a sustained release formulation of a novel small molecule anti-angiogenic compound. The results of this study which was conducted in rabbit show that a single intravitreal dose of OHR3031 resulted in supra-therapeutic levels of active drug in the retina and choroids, which are the target ocular tissues for back of the eye disease. These results were presented at the ARVO meeting in May this year. The second milestone was a study investigating activity of OHR3031 in a rabbit model of a laser induced CMV. In this model, we showed that a single injection of micro-particle containing the drug produced statistically significant efficacy at the targeted six weeks after dose administration. There was a dose dependent reduction in average CMV lesion area with the OHR3031 containing micro-particles compared with vehicle treatment. The magnitude of the difference in average CMV lesion size at the 6-week time point for the high dose of OHR3031 compared to vehicle treatment was comparable to that seen at two weeks with the currently approved anti-VEGF agent conducted in a previous study. These studies serve as important validation of our SKS sustained release technology. We believe that has a potential to improve the standard of care in a number of ocular conditions by allowing for physician administration of drugs at convenient treatment interval. We plan to present addition in vivo proof of concept data on our internal programs in calendar 2017. Finally, in December, we have strengthened our balance sheet with the successful public offering that resulted in net proceeds for the company after the deduction of underwriting expenses of $6.9 million. We are grateful for the support of the investors who participated in this transaction. Now, I would like to have Sam provide addition detail on the financial results we just reported. Sam?

[Sam Backenroth:]

Thank you, Jason. For the year ended September 30, 2016, we reported a net loss of approximately $25.8 million or $0.82 a share compared to a net loss of approximately $15.2 million or $0.54 a share in the same period of 2015. Total operating expenses for the year were approximately $24.6 million consisting of $7.7 million in general and administrative expenses, $16.5 million in research and development expenses and $1.2 million in depreciation and amortization. This compares to total operating expenses in the same period of 2015 of approximately $17.8 million consisting of $7.5 million in general and administrative expenses, $8.8 million in research and development expenses and $1.2 million in depreciation and amortization. At September 30, 2016, the company had cash and cash equivalents of approximately $12.5 million. This compares to cash and cash equivalents of approximately $28.7 million at September 30, 2015. As Jason mentioned on December 13, we closed on a public offering of common stock and warrants, net proceeds for the company after deducting placement agent fees and estimated offering expenses were approximately $6.9 million. For further details on the transaction, please refer to the prospectus filed with the SEC. That completes my review of the financials. We will now open up the call for questions. Operator?

[Operator:]

Thank you. Ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] And our first question comes from the line of Mr. Corey Davis from H.C. Wainwright. Please go ahead.

[Corey Davis:]

[Question Inaudible] given how good the Phase 2 look and given that you have a similar yet different mechanism of action, how does this encourage or discourage you with your own study that’s ongoing?

[Jason Slakter:]

Thanks for having this. That’s a really good question. I think on the minds of a lot of people today. There are a number of possible reasons why the Fovista Phase 2 results did not mirror the differences in vision gains seen in the Phase 2 trial. But without more data, it’s difficult to draw firm conclusions. I think it’s important to remember that Squalamine is a fundamentally different molecule. It has a differentiated mechanism of action about the delivery and a sustained therapeutic activity. Squalamine lactate is topically administered as an agent and it doesn’t just inhibit PDGF, but also VEGF and basic bFGF activity through an intracellular mechanism of action. When we first evaluated our Phase 2 data, one of the first things we have looked at was how closely our Lucentis mono-therapy control arm performed compared to prior study. As you recall the Lucentis PRN arm of the CATT trial, which was the large study comparing Lucentis to Avastin had a treatment regimen inclusion criteria almost identical to that that we used in our study. And we saw that the outcome in our Lucentis monotherapy arm were very similar to the visual acuity outcomes seen in the comparable arm in the CATT study at months nine. This provided us with support to the improvements that we were seeing with Squalamine combination therapy in Phase 2 were real and replicable. Going back from the very beginning, we utilized an exploratory approach in our Phase 2 Squalamine trial. And we did that in order to be able to identify the optimal patient population as we move forward into Phase 3. This was the population we found is consistent with the mechanism of Squalamine combination therapy and the vascular biology of choroidal neovascularization. Further more and very importantly the Phase 2 study was designed with a nine month end point which more closely aligns with the longer term effect you see with wet AMD patients in general. Our Phase 3 trials are designed with that same nine month end point. So I think when we look at the overall picture and we look at the results that we have seen we see the way we developed our program, we feel that our approach to the drug development de-risks the Squalamine Phase 2 registration program and really positions us to be successful where other companies have failed.

[Corey Davis:]

Okay. Thanks. And then just second question is I know you addressed it briefly, but can you provide a little more color on the rationale about your recent capital raise and why you did it, how long it’s going to get you and how that plays into your ongoing partner discussions?

[Jason Slakter:]

Sam, I let you, do you want to take that?

[Sam Backenroth:]

Sure. The Board and management decided that as we dealt with multiple parties we needed to strengthen the balance sheet to provide flexibility in our ongoing discussions. I want to specifically convey to everyone on the call that the management team is fully committed to providing shareholders with the best possible outcome to maximize shareholder value and we believe that the capital that we have raised will allow us to do that.

[Operator:]

Mr. Davis any further questions.

[Corey Davis:]

No. I am good. Thank you very much.

[Operator:]

We have no further questions at this time. I will go ahead, I will turn the call back over to you Dr. Slakter for any closing remarks.

[Jason Slakter:]

Thanks very much. I want to thank you all for joining us on today’s call. 2016 has been an exciting year for Ohr and we look forward to even more progress on our corporate clinical and development program objectives in 2017. On behalf of the entire Ohr team, I want to wish you all a happy and healthy holiday season and New Year. Have a good evening.

[Operator:]

Thank you. Ladies and gentlemen, this does conclude our call for today. We thank you for your time and participation. You may disconnect your lines at this time and enjoy the rest of your day and a wonderful holiday season.