BiomX Inc.
Q2 2021 Earnings Call Transcript

Published: 16 Aug 2021

[Operator:]

Greetings and welcome to BiomX Second Quarter 2021 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder this conference is being recorded. It is now my pleasure to introduce Marina Wolfson, Senior Vice President of Finance and Operations. Thank you, you may begin.

[Marina Wolfson:]

Thank you and welcome to the BiomX second quarter 2021 financial results and corporate update conference call. The news release became available just after 6

[Jonathan Solomon:]

Thank you, Marina, and good morning everyone. Let me start by saying how excited we are about the multiple catalysts the Company will have in the next year. We are entering the most data rich period in the Company's history with expected readouts across all four of our clinical stage programs. In our view, any one of these readouts, if successful, could represent a transformative event for our company. This is all thanks to the hard work and dedication of our team. We also enter the second half of 2021 with more than sufficient capital to reach these important milestones. As previously announced, last month BiomX completed a registered direct offering of $15 million. Participation in this offering, included both existing and new investors, and that was also gratified by the show of confidence from the Board of Directors, each of whom also participated in this offering. We further strengthened our balance sheet with access of up to $30 million of debt financing from Hercules Capital, a leader in customized debt financing for companies in the life science and technology-related markets. The first $15 million tranche is available upon closing. Two subsequent tranches of $10 million and $5 million will become available upon the achievement of certain milestones. These two financing provide us with cash runway after at least the middle of 2023 with a full debt supporting us until the beginning of 2024. Now, let me briefly summarize the progress we made to-date in our four clinical programs to enable us to have potentially meaningful clinical readouts in up to four different indications through mid 2022. Starting with our acne program. Top line results are on track to be reported for the 8 and 12 week treatment periods in the third and fourth quarters of 2021, respectively. We are pleased we previously report that enrollment in the study was completed on May 13, 2021, two weeks ahead of time. Given good progress, we can now confirm that this 12-week microbiological assay analysis can be completed even earlier, if bundled together with the eight-week samples. Therefore, we have made a decision to forego the interim eight-week analysis, continue the blinded status of this study until completion, and conduct and report all analysis, 8-week and 12 week, together. Hence, the full study readout will be available end of October, only weeks after previously communicated timeline for the planned eight week interim analysis and in the earlier and of our prior guidance for the 12 week data. As a reminder, BX001 is a topical gel comprised of a cocktail of naturally occurring phage that targets the Cutibacterium acne or C-acne, which is implicated in the pathophysiology of acne vulgaris. The Phase 2 cosmetic clinical study is evaluating 140 subjects with mild to moderate acne vulgaris. Key endpoints in the study include safety, tolerability of BX001 in addition to its impact on the appearance of an acne-prone skin. We will evaluate the BX001 for cosmetically meaningful improvement of acne-prone skin as well as a reduction in C-acne burden. We look forward to reporting on these results in the upcoming months. With respect to our cystic fibrosis program, BX004 is a phage cocktail candidate designed to target Pseudomonas aeruginosa or P. aeruginosa, a bacteria that causes chronic respiratory infection and is a main contributor to morbidity and mortality in patients with cystic fibrosis, CF. By way of background, CF patients suffer from chronic lung infections and typically require for long and repeated courses for various antibiotics, whose effectiveness diminishes over time as multi-drug resistant strains appear. BX004 has the potential to be both active against antibiotic resistant strains of Pseudomonas aeruginosa and to penetrate biofilm, an assemblage of surface associated microbial cells enclosed in an extracellular polymeric substance and one of the leading drivers of antibiotic resistance. In consultation with cystic fibrosis therapeutic development network, BiomX will be conducting a Phase 1b/2a trial compromise of two parts. Part 1 will evaluate the safety, pharmacokinetic, microbiologic and clinical activity of BX004 in a single ascending dose fashion, followed by multiple doses in eight CF patients that are confirmed to have chronic Pseudomonas aeruginosa respiratory infections. Results from Part 1 of this trial are expected to be in the first quarter of 2022. Part 2 of the strong will evaluate the safety and efficacy of BX004 treatment over 10 days in different cohorts of 24 CF subjects with chronic Pseudomonas aeruginosa respiratory infection. As in Part 1, results from Part 2 of this trial are expected by the second quarter of 2022. Turning to our atopic dermatitis program, our phage cocktail BX005 is designed to target Staphylococcus aureus or S. aureus, a bacterium associated with the development and exacerbation of inflammation in atopic dermatitis. S. aureus is known to be more abundant over the lesional skin of atopic dermatitis patients compared to the skin of healthy individuals or non-lesional skin of atopic dermatitis patients. The targeted bacteria also increases in abundance and becomes dominant when patients experience flares. We expect results in Phase 1b/2a proof-of-concept clinical study evaluating the safety and efficacy of the BX005 in the first half of 2022. During the second half of 2021, we plan to advance a clinical program inflammatory bowel disease and primary sclerosing cholangitis into Phase 1b/2a trial of BX003. Study arms will include either healthy subjects or IBD or PSC subjects or confirmed carriers of the target bacteria Klebsiella pneumoniae in their gut. The Phase 1b/2a is a four-week placebo controlled dosing study designed to direct the safety tolerability and efficacy of the BX003 as measured by the reduction of the amount of target bacteria in stool. Results are expected in the second quarter of 2022. Finally, let me briefly touch on our preclinical immuno-oncology program focused on colorectal cancer or CRC. Despite the success of immunotherapy and cancer, only a small percentage of new cases CRC respond to immunotherapy. This limited response is believed to be due to the lack of novel tumor antigens and scarcity of immune cells and colorectal tumors. We have observed in vitro and in vivo that our phage therapy can target strains of Fusobacterium nucleatum or FN, a bacterial species that is highly enriched in colorectal tumors and is believed to contribute to the pathogenesis. We plan to administer phage with target F. nucleatum intravenously to deliver payload genes such as dose and coatings immune-stimulating proteins to tumors, while also reducing material load of these bacteria. We have successfully engineered an IL-15 gene payload into ethnically atom phage and we plan to announce our preclinical results in this program in the fourth quarter of 2021. We look forward to keeping you informed on our progress. I'd like to turn the call over to Marina Wolfson, our Senior Vice President of Finance and Operations to review our financial results for the second quarter of 2021.

[Marina Wolfson:]

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q, which will be filed later today. I will walk you through some of our brief highlights. The cash balance including short-term deposits, as of June 30 2021, was $47.3 million compared to $57.1 million as of December 31 2020. This figure does not include capital that we obtained with our recent equity and debt financings. Importantly, during July and August, we have strengthen our balance sheet and extended our cash runway with a $15 million equity financing and secured up to $30 million in debt funding from Hercules Capital to support our clinical trials, R&D efforts, and for general corporate purposes. The first $15 million tranche of the venture debt is available upon the closing of the agreement, and we will also have access to up to an additional amount of $15 million with the achievement of certain milestones. We estimate that existing cash, cash equivalents and short-term deposits with the equity financing that we completed and the first tranche of the venture debt facility will be sufficient to fund the Company's current operating plan until at least mid of 2023, with a full debt supporting us until the beginning of 2024, assuming achievement of milestones. Net research and development expenses were $3.8 million in the second quarter of 2021, compared to $3.7 million for the same period of 2020. The increase was primarily due to conducting preclinical and clinical activities of our product candidates, increased headcount in our research and development and clinical personnel, increased staff-based compensation and salaries and related partially offset by an increase Israeli Innovation Authority grants that were recorded during the period. General and administrative expenses were $3.1 million in the second quarter of 2021 compared to $2.3 million for the same period in 2020. The increase is primarily due to increased stock based compensation and salaries and related expenses, mainly due to the close and the number of employees. Increase expenses associated with operating as a public company, such as directors and officers insurance and expenses and moving into new premises. Net loss was $7.3 million in the second quarter of 2021 compared to $6.2 million for the same period of 2020. Net cash used in operating activities was $12.8 million for the six months ended June 30 2021, compared to $11.4 million for the same period of 2020. And now, I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

[Jonathan Solomon:]

Thank you, Marina. Let me conclude by saying that we are entering a truly an exciting period for BiomX, ahead of our clinical data readouts. I think it's important to remind investors, what makes BiomX such a unique and compelling opportunity within the microbiome field. BiomX's BacteriOphage Lead to Treatment platform or BOLT is capable of generating clinical proof-of-concept data in patients within 12 to 18 months from project initiation. The BOLT phage discovery and optimization platform is capable of efficiently screening large libraries of phage for testing potential candidates based on cell activity and potency, as well as a number of other parameters that are important for drug development, such as safety, stability and ease in manufacturing. This approach together with our in-house GMP manufacturing facility enables a rapid pass and discovery to the clinic. And the upcoming data readouts of all four of our clinical programs clinically reflect the efficiency of our development platform. The combination are both platform along with a broad acceptance of phage inherent safety enables us to develop manufacturer formulate novel phase therapy candidates that target specific pathogenic bacteria at an unprecedented speed. Having all these capabilities in-house helped us build a diverse portfolio spanning various indications. As a pioneer in this field, we believe that our approach of developing precision based medicine that aim to restore the natural balance of healthy bacteria represents the safest and most effective means of treating microbiome related disease, and we look forward to updating investors on our lead clinical programs over the next 6 to 12 months. We'd now like to open the call for questions. Operator.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. Our first question is comes from the line of Michael Higgins with Ladenburg Thalmann. Please proceed with your question.

[Michael Higgins:]

Good afternoon, guys. Thanks for taking the questions and congrats on the continued progress. First one, specifically on the acne data and the timing for such, coming up in late October looks like now. Can you give us a little more insight as to your decision making going into releasing just the 8 and 12 together as in 8 and 12 separate?

[Jonathan Solomon:]

Good morning, Michael. Great to have you. Definitely excited about the progress in the program, and I can let Sailaja kind of give you into more details on the decision process.

[Dr. Sailaja Puttagunta:]

Great. Thank you so much, Jonathan, and good morning, Michael. So as we reported earlier, we were very pleased with the enrollment in the study for 140 patients with acne, completed enrollment about two weeks ahead of schedule as we reported earlier. And we continued to make good progress with the conduct of the study. And it turns out that, if we bundle the microbiological analysis of the 12-and 8-week time points together, that we've been able to report on the entire dataset sooner than we thought. And so the difference between reporting, the interim analysis, just using the 8-week time point versus the complete data set after completion of the 12-week treatment period was only a few weeks. And so, it didn't make sense for us to do the interim analysis separately. And therefore, we decided to combine continue the blinded status. Do all of the 8 and 12 week analyses at the end of this study and deport them just a few weeks later than the interim analysis would have been done.

[Michael Higgins:]

Just a follow-up for that, I think investors are would be curious. Are you able to see any of this data? This is not a heading towards an NDA filing. So just curious, you guys are able to see the data as its building? Thanks.

[Dr. Sailaja Puttagunta:]

No, we remain blinded, and we do not see the data by treatment or battle. We can monitor the data, obviously in a blinded status as we would with any study.

[Michael Higgins:]

Okay, appreciate that. And then one follow-up and this is another big one. So I'll stop here with this one. Given the series news, can you describe for -- sorry, given the series news, can you describe for us the environments in which your pages are being applied, specifically under active treatments if they're allowed or not? That obviously can have an impact on the microbiome and environment. I'll start it off with acne, if benzoyl peroxide is allowed Thanks.

[Jonathan Solomon:]

Sailaja, want to address.

[Dr. Sailaja Puttagunta:]

I am sorry. Can you please repeat the question? I'm so sorry.

[Michael Higgins:]

Sure. Yes, no problem. I was just in brief, following the series news of sort of being it's interesting to hear from you guys about, what the exact environments are in which your phages are being applied, for example, in acne? Is benzoyl peroxide allowed? But just defer to your comments about how that may be different here? Thanks.

[Dr. Sailaja Puttagunta:]

Sure. So for the acne study, no, benzoyl peroxide is not allowed. And no other over the counter or other topical treatments are allowed. It's just either the facial or the placebo that are allowed in the study. And so this is exactly the same way that we did the first study that be reported out earlier this year. The, as for the series data, Jonathan should get on back.

[Jonathan Solomon:]

Yes, I can jump in. Because I think you bring up an important point, right. I think we were all very disappointed to see the series data in IBD. And it's a bloated field. I think, in general, the phage approach is very differentiated, right. First use of phage, we're not adding a bacteria. Second, I think an important aspect is because of the phage rabid specific target, our approach, if you look exact in the case of IBD, right, where is only relevant to 30% of the patients that actually have high levels of Klebsiella. So, we don't think IBD is a single disease, right. And you can't use a broad approach. You need something which is specific to the patients that have this manifestation of high level of bacteria. So, that's the key difference, right. Secondly, and I think another important aspect is in approach right to use fecal material source and healthy volunteers. So, it's not necessarily consistent or robust product. And I think these are issues that they've had in the past. And our approach we use phage bank, host bank, we produce a same well defined phase. So, it's a very consistent product and that's where we're looking at it.

[Michael Higgins:]

Just the follow-up to that in CF and atopic dermatitis. What are the meds are allowed in the treatment of the patients?

[Jonathan Solomon:]

Sure. Sailaja, please go ahead.

[Dr. Sailaja Puttagunta:]

Yes, thank you. So I'll start with the CF programs. In that study, we are enrolling patients with cystic fibrosis who have chronic Pseudomonas aeruginosa pulmonary infections. So these patients generally extend as part of standard of care are taking inhaled antibiotics either on a continuous basis or on an on off 28-day cycle basis. And so those treatments, we will allow and allow the patients to remain on whichever standard-of-care antibiotic either tobramycin or Aztreonam inhaled medication on their cyclical basis as they used to doing. And those that are randomized to phage will receive in nebulized phage on top of those antibiotics, and the others will receive placebo, nebulizer on top of those antibiotics. CFTR modulators or the other group of medications that CF patients are on especially in the U.S., and we will continue allow continuation of the use of CFTR modulators as well. So that's CF. For atopic dermatitis, these patients in this study, we plan to enroll patients with moderate to severe atopic dermatitis who are colonized with staff, and this will be a topical gel formulation. So for that study, patients who are requiring systemic biologics will not be allowed into that study, and those that are receiving other topical treatments for the atopic dermatitis, we will wash them off, allow a washout period to come off of their other topical medications and only be allowed to use products during the course of the study.

[Operator:]

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

[Kristen Kluska:]

The first one I have is just continuing from your earlier comments about the personalized and targeted approach of phase. Could you remind us for your lead indications what worked specifically went into validating the role that these harmful bacteria play across these conditions? And then to what extent do antibiotics and/or other therapies help validate these targets while recognizing that they come with limitations?

[Jonathan Solomon:]

Sure and good morning, Kristen. So, I think if you look into the different programs, right. I think it's different in terms of validation for every program, right. In acne, we know topical antibiotic for use. We know C. acne is kind of the major component. That's what most therapies are going after, but there's now more and more issues basically with topical antibiotics and here we're building a basic and better mousetrap. We're trying to overcome resistance. We're trying to overcome biofilms and provide a safe and effective treatment. If I look in timelines, CF, we know these patients take antibiotics. We know that when for the care of sensitive, they do better breathing parameters that work and improve in CF patients, but just due to the prolonged usage of antibiotics, right, they become more and more antibiotic resistance. Biofilm is formed and they just stopped responding to therapy. So here again, phage can overcome antibiotic resistance can have antibiotic capability. And moreover, I think in CF we've even evidenced of compassionate use cases of patients that were treated with phage successfully, not only reducing the target bacteria as well as improving lung capacity. And atopic germ, there has been historical evidence that antibiotics did have effect in reducing Staph aureus and improving . There is now even new studies right the likes of forte and we're coming out of UCSD that shows that reducing this is having an effect. And again, being in atopic derm you just cannot use antibiotic chronically, right. This bacteria is so antibiotic resistant that it's just not an option. Same thing in IBD, right, these patients cannot be chronically treated with antibiotic. It messes up the whole microbiome -- messes up with their immune system. So, there's a clear need for a very precise approach. And in IBD, I think it's all based on the excellent work that was published by Professor Kenya Honda.

[Kristen Kluska:]

Great, thanks. Appreciate that. And then moving on to the IBD study, wondering whether you have an internal goal on the percent or the amount of reduction for K. pneumoniae that you hope to see with four-week dosing? And then as you look across the 30% or so of these IBD patients and PSE as well that have elevated levels of this bacteria, and then from looking at the microbiome composition of healthy patients. Do you know what reduction would be considered clinically meaningful here where you might start to see some correlation with some of the other measures in longer studies, as it relates to the effects of this disease?

[Jonathan Solomon:]

I think it's -- again, I think it's still difficult at this point. There are historical studies that have reduced by half a log to a log. So, we've seen some numbers like that. The question is what happens to the other population of bacteria. But I think if we see a signal, which is significant in the four weeks since the IBD study itself is planned when we go to patients can be longer, probably even get a greater reduction. So I think in this study, we want to see reduction around that range and then longer we want to see greater reduction. Hopefully, the rest of the microbiome is also going to be in competition, so it might over time get even a greater effect.

[Kristen Kluska:]

Okay, great. Thanks for taking the question. Looking forward to acne data in October.

[Jonathan Solomon:]

Okay. Likewise, thank you.

[Operator:]

Our next question comes from the line of Keay Nakae with Chardan Capital Markets. Please proceed with your questions.

[Keay Nakae:]

Jonathan, as we anticipate the acne data, give us a sense of what a good efficacy result would be?

[Jonathan Solomon:]

I'll let actually Sailaja comment on that. So go ahead Sailaja.

[Dr. SailajaPuttagunta:]

Thank you, Jonathan and good morning, Keay. So in terms of what would be a good outcome for the acne study? Just to remind you, what we saw in the first study was that the phage was able to reduce the bacterial burden of C. acnes? And here in this study with the longer duration of treatment, we expect to see that reduction, but also see a clinical correlation of that reduction, meaning, some change in the appearance of the acne prone skin.

[Keay Nakae:]

And in say that is there a specific threshold of improvement your potential collaboration partner needs to see before they'll pull the trigger?

[Jonathan Solomon:]

So I can jump in. I think we've -- this is obviously pursuing cosmetic test and a relatively small study. So people are looking for a signal, right. Not necessarily a need for statistical significance since this -- it's not a very large study, but we do want to see a signal indicating that there's a separation between treatment and placebo.

[Operator:]

Thank you. There are no further questions at this time. I would like to turn the call back over to management for any closing comments.

[Jonathan Solomon:]

So I wanted to thank you all again for joining us this morning. I want to thank the team of BiomX, which is to bring our innovative phage therapies into clinical testing, as well as our shareholders for their support and patients participating in our clinic trial. Have a wonderful day, and please reach out to us if you have any questions. Thank you.

[Operator:]

Thank you. This does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a great day.