Pieris Pharmaceuticals, Inc.
Q4 2020 Earnings Call Transcript

Published: 30 Mar 2021

[Operator:]

Greetings, and welcome to Pieris Pharmaceuticals Inc. Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I would now turn the conference over to your host, Tom Bures. You may begin.

[Tom Bures:]

Thank you. Good morning, everyone, and thank you for joining us for our year-end 2020 conference call and corporate update. On the call today, we have Steve Yoder, our President and CEO, who will provide a corporate overview and outlook on our pipeline; Hitto Kaufmann, our Chief Scientific Officer; and Shane Olwill, our SVP and Head of Translational Science, who will be available for Q&A. You can access the press release released this morning on the Investor Relations page of our website at www.pieris.com.

[Steve Yoder:]

Thank you, Tom. And thank you to everyone for joining us today for our 2020 year-end earnings call. It's been a busy and exciting past few days, including this morning's update within our AstraZeneca collaboration. But before diving into those updates, as well as a recap of some of last year's highlights, and an outline of our future plans. I’d like to simply remind everyone, that we're building a proprietary and partner pipeline of large molecules called Anticalin proteins, which are engineered versions of naturally occurring proteins called lipocalins. Lipocalins are small specific binding proteins with good drug like properties. We're currently focused in two areas, inhaled Anticalin proteins to treat respiratory diseases locally, and bispecifics designed to activate the immune system of cancer patients locally. In both cases, the local or focused approach that Anticalin proteins offer is intended to drive superior outcomes for patients compared to systemically active agents. Beginning with our respiratory franchise, I first will provide an update on PRS-060 or AZD1402, an IL-4 receptor alpha antagonist we’re developing for moderate to severe asthma in collaboration with AstraZeneca. We’re pleased to have announced earlier today, the achievement of the $13 million milestone payment in connection with the initiation of the Phase 2a study for this program. In this global two part Phase 2a study, PRS-060 will be evaluated at up to three dose levels in an inhaled dry powder formulation versus placebo. The first part of the study will evaluate the compound in approximately 45 moderate asthmatics controlled on standard of care asthma therapy over four weeks to establish the safety and pharmacokinetics of the dry powder formulation. The second part of this study will assess its efficacy, safety and pharmacokinetics in up to three arms, plus a placebo arm and up to 360 moderate uncontrolled asthmatics with a blood eosinophil count of greater than or equal to 150 cells per microliter and fractional exhaled nitric oxide or FENO greater than or equal to 25 parts per billion. Patients will be dosed and monitored over four weeks, with FEV1 improvement compared to placebo as the primary endpoint.

[Tom Bures:]

Thanks, Steve and good morning again everyone. Cash and cash equivalents totaled $70.4 million for the year ended December 31 2020 compared to our cash, cash equivalents and investment balance of $104.2 million for the year-ended December 31 2019. The decrease was primarily due to funding operating and capital expenses in 2020, partially offset by ATM proceeds and milestone achievements during the year. December 31 2020 ending cash excludes the $13 million received from Seagen in March 2021 and the $23 million to be received from AstraZeneca in connection with the Phase 2a study initiation and equity investment. R&D expenses were $46.5 million for the year-ended December 31 2020, compared to $55 million for the year-ended December 31 2019. The decrease in R&D expenses was primarily due to lower clinical and manufacturing costs on our immuno-oncology programs, in part due to the partial clinical hold in CINRA, lower manufacturing spending on PRS-060 which is fully reimbursed from AstraZeneca and lower travel related expenditures due to COVID-19 restrictions. The overall decrease was partially offset by an increase in allocated IT and facility costs due to the move to a new R&D facility in Hallbergmoos, Germany in early 2020. G&A expenses were $16.7 million for the year-ended December 31 2020, compared to $18.4 million for the year ended December 31 2019. The decrease in G&A expenses was primarily due to lower personnel costs, lower audit and professional fees related to Sarbanes Oxley readiness and lower travel related expenditures due to COVID-19 restrictions. These decreases were partially offset by higher allocated IT and facility costs due to the move to the new R&D facility. Our net loss attributable to common shareholders was $37.2 million, or $0.68 per share loss for the year-ended December 31 2020 compared to a net loss of $28.3 million, or $0.56 per share loss for the year-ended December 31 2019. With that, I'll turn the call back over to Steve.

[Steve Yoder:]

Thanks, Tom. I just like to conclude by saying that 2020 was a tough year for everyone to say the least. And I'm very proud of how our team adapted and stayed the course. The challenges we faced last year made us a more resilient organization and I look forward to maintaining this mindset in 2021 and beyond. This year is already off to a good start with partner support and a number of clinical program starts recently announced or anticipated. PRS-060 is progressing through its next phase of development and this year, we will be advancing both CINRA and PRS-344 into the next phases of development. We would now like to open the call for any questions that you might have.

[Operator:]

And at this time, we will be conducting a question-and-answer session. Our first question is from Matt Phipps with William Blair. Please proceed with your question.

[Matt Phipps:]

Good morning and thanks for taking my questions and congrats on minute agreements here. I'm just curious if you guys have been able to glean any learnings from the recent data sets, or updates from competitor PD-L1 4-1BB bispecific programs. And really, it seems like competitors are not able to reach a dose level where they can fully inhibit the PD-L1 pathway. And therefore may even look to combine with a separate PD-1 antibody. So really just curious if you guys have any reason to think that 344 might be able to, still have good 4-1BB agonism at a higher dose level to saturate the PD-L1 pathway. And then, I think weaning from maybe the tumor types or things like that to go into with the drugs in clinics?

[Steve Yoder:]

Hey Matt, Steve here, thanks for the question. It's a great question. And we know a lot of people are focused on not just 4-1BB but 4-1BB PD-1 and we do believe it's a great example of a combination where the bispecific itself drives novel biology compared to a cocktail approach. And where you're giving on this, in this case an antagonistic approach on one side and agonistic approach on another, you have to really put a lot of thought into the design and the dosing schedule of the molecule. And here, I think this demonstrates, our position of leadership, a lot of the thought that's gone into designing the molecule and how we can extract learnings from 343 in the clinical setting for 344 going forward. And I would say before turning it over to Shane to get into some of those important nuances that you highlighted. We believe that the data we're seeing in general out there, from third-party molecules in the clinic, really confirm the rationale to pursue this combination. And it does show the nuanced challenges of getting the right dosing schedule, those levels of course, you have to work with the molecule you have. And given the thought that we put into the design of our molecule, we feel really encouraged about the opportunity for best in class approach. And I'll let Shane go into the details. He was largely the brainchild behind the development or design of this molecule. So I would be remiss if I didn't let him share that with you, firstly.

[Shane Olwill:]

Thanks Steve and thanks Matt for the question. Yes, thanks Steve. So as you say, there is some emerging data. And as Steve mentioned, we see this as positive in the sense that is further validation or confirming 4-1BB’s importance. But when it comes to the actual design of a molecule, there are a number of things you need to bear in mind. And we certainly considered things like the isotype of a molecule, we wanted to ensure that would be would have a complete silent backbone, we spent a lot of time working on the valency and the geometry of a molecule. From a valency perspective, we feel bivalent is best, geometry we wanted to have an optimized, flexible formats that would allow a natural ups to form. And then other things like the actual affinity for the partners 4-1BB or PD-L1 As we've said, many times we scale on the 4-1BB sides, you need to have a moderate affinity to really allow you to take advantage of a therapeutic window. So we've gone for some competitors have gone for a highest and molecule and that may impact the therapeutic window, we also have thought a lot to particular epitopes of 4-1BB, we bind to. So all in all, as Steve said, we've been working in the 4-1BB space for a number of years, we've learned a lot from PRS-343 and all those learnings can go into PRS-344, we feel we have the opportunity to have the best in class play here. And notwithstanding that, we do feel that the data coming out from competitors is supporting the general approach of targeting 4-1BB.

[Matt Phipps:]

Good, thanks, Shane. So then on the CINRA combo, the new CINRA combo with tucatinib, why not also explore chemo in that combo just it seems like in gastric lot of drugs and regimens really kind of need some chemo there to help slow down the aggressive tumor?

[Steve Yoder:]

Shane, you want to answer that one as well?

[Shane Olwill:]

Yes, sure. Matt, it’s a good question. Certainly, I can answer, Matt. And it's a good question. And again, we've taken an approach to gastric cancer and that we want to explore different regimens. And what we would say is, there's a lot of rationale for combining PRS-343 with CINRA. We see a dramatic increase in T cell activation with the combination. We also would remind you that as a single agent, we're seeing really nice activity with PRS-343. So we do feel combining those two agents certainly makes a lot of sense. I would also say that with our other arm and the gastric trial, we are exploring chemotherapy. So we've got one arm which is looking at Paclitaxel, and an arm which we'll look at tucatinib. So I would say we're covering our bases there. We do feel that with regard to the CINRA PRS-343 -- the CINRA combination with tucatinib, there’s a strong biological rationale. We've got some really nice preclinical data and building on the clinical data we've seen as a monotherapy with our agent, we feel that there's a real opportunity here.

[Steve Yoder:]

Yes, I would just add to Shane's, a very thoughtful answer that, we certainly are exploring the chemo regimen in combination with HER2+ cancer, and that's also because of the standard of care being Ram taxel and that make allows for an efficient enrollment on top of standard of care. It's not for fear of any toxicity that we wouldn't add a chemo regimen on top of tucatinib right now, we feel it's following the biology based on data, we've generated in house and with the collaborative efforts of Seagen, and we look forward to moving both the important parallel. Great questions Matt, thanks.

[Matt Phipps:]

And if I can just sneak one last one and that’s for Tom, can you say where this additional cash now gets you from kind of runway standpoint?

[Tom Bures:]

Sure, Matt. We haven't really guided beyond saying we have more than 12 months of cash. But certainly, this puts us in a really good position to run these Phase 2 trials for CINRA start and get to read outs in those certainly get to read out on the recently initiated Phase 2a trial for PRS-060 and go forward with the 344 study as well getting that into the clinic along with a number of earlier stage discovery programs that are partnered and some that we have proprietary as well. So I think we're well positioned now with some of the positional cash that's coming in the last couple of days.

[Matt Phipps:]

All right, thanks Tom.

[Operator:]

And it seems as if we have reached the end of the question-and-answer session, and I'll now turn the call over to Steve. I’m sorry I do see Matt Phipps from William Blair again, who has another question. Please proceed with your question.

[Matt Phipps:]

Yes, I’m going to leave some for others. But just so I know, you guys can't say too much on a trial. But clintrials.gov this mid next year primary completion. What should we look for updates, I know you guys have to work with AZ on this. But will we know when it reaches through the first part of the trial? Or will you be able to provide some updates as it goes?

[Tom Bures:]

Yes, Matt, I'm happy to take the question. It's nice to have a nice dialog with you today. But no worries. Look, we have to align, as you said with AZ on a disclosure strategy across the duration of the trials, we've clearly talked about the enrollment criteria for subjects for Part 1 versus Part 2, you can see that for Part 1, they're moderate asthmatics controlled on standard of care that don't have to have a Type 2 phenotype versus for the efficacy part that is modern uncontrolled, that have the classic T2 phenotype with the EO and the FENO cut-offs. So I think, we're encouraged to say that we think enrollment of Part 1, should be straightforward okay, with all the caveats that we're still at a COVID world out there. But I would like to think that that can go forward efficiently with the multiple sites we have up and running. And we would like to be able to talk about getting through that stage gate in a timely manner. That's our expectation. That's our hope. And so that's something that hopefully we can be able to comment on later in the year. And we'll work with AZ to be able to do that in a way that meets their corporate communication strategy. So that's what I would hope to be able to do on the way to announcing the overall efficacy data, which will be absolutely next year.

[Matt Phipps:]

Great, all right, thanks guys.

[Tom Bures:]

All right, Matt. Thanks.

[Operator:]

It appears there are no questions.

[Steve Yoder:]

There are no other questions, I guess. So I'm happy just to thank everyone for your attention today and your continued support of Pieris and we certainly look forward to keeping you updated on all of our progress. Thanks again for joining the call and have a great day.

[Operator:]

This concludes today's conference and you may disconnect your line at this time. Thank you for your participation.