Provention Bio, Inc.
Q3 2019 Earnings Call Transcript

Published: 9 Nov 2019

[Operator:]

Operator Hello, and welcome to the Provention Third Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to your host today, Sam Martin. Please go ahead.

[Sam Martin:]

Thank you, Keith, and thank you all for joining us on Provention Bio's Third Quarter 2019 Financial Results Conference Call. Joining today's call from the Provention team are Ashleigh Palmer, Chief Executive Officer and Co-Founder; Andy Drechsler, Chief Financial Officer; Dr. Francisco Leon, Chief Scientific Officer and Co-Founder; and Dr. Leni Ramos, Chief Medical Officer and Chief Operating Officer.On today's call, Andy will summarize Provention's third quarter financials, and Ashleigh will then provide you with a corporate update, including a review of the progress being made with the Company's PRV-031 program. We will then open up the call for questions.First, let me remind you that the various remarks we'll make today constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our product candidates, financial projections and our plans and prospects.Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and in other filings that we may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change.Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. There is more complete information regarding forward-looking statements, risks and uncertainties in the reports Provention files with the SEC. These documents are available on Provention's website at www.proventionbio.com, under the Investors section, and we encourage you to review these documents carefully.I will now turn the call over to Andy Drechsler, Provention Bio's Chief Financial Officer.

[Andrew Drechsler:]

Thank you, Sam. Good afternoon, everyone. Before I begin, I would encourage you to read our 10-Q that was filed today. The 10-Q includes our financial statements as well as management's discussion and analysis of our financial condition. I would also like to call your attention to the earnings press release, which was issued prior to this call.Let me start with our current cash position and cash projection. Our cash balance was $95.1 million as of September 30, 2019. This balance reflects the underwritten public follow-on offering of 5.75 million shares and a concurrent private placement with Amgen of 2.5 million shares of our common stock in September 2019. These shares were issued at a price of $8 per share, resulting in aggregate net proceeds of $62.7 million after deducting underwriting discounts and offering expenses.Our cash-based operating expenses for the nine months ended September 30, 2019, was $31.9 million. We will continue to fund operations for our four active programs, PRV-031, PRV-3279, PRV-015, and PRV-101.We expect our fourth quarter cash operating expenses to be in the range of $10 million to $12 million. Ultimately, we expect our current cash and cash equivalents will be sufficient to fund projected operations into the second half of 2021.From a P&L perspective, we generated a net loss for the third quarter of 2019 of $9.8 million or $0.24 per basic and diluted share. The increase in net loss of $4.4 million compared to the third quarter of 2018 resulted from an increase in research and development costs of $3.2 million, primarily associated with the clinical development expenses for PRV-031, PRV-101 and PRV-3279, as well as an increase in general and administrative costs of $1.4 million.During the nine months ended September 30, 2019, we generated a net loss of $32.7 million or $0.85 per basic and diluted share. The increase in net loss compared to the prior year is related to an increase in research and development costs of $10.2 million, primarily associated with the clinical development expenses for PRV-031, PRV-101 and PRV-3279.Also contributing to the increase in net loss was an increase in general and administrative costs of $2.7 million, resulting from an increase in personnel costs, including stock-based compensation as well as increased legal and professional fees.I will now turn the call over to Ashleigh Palmer, our CEO and Co-Founder, who will provide an update on Provention's corporate, clinical and business development achievements. Ashleigh?

[Ashleigh Palmer:]

Thank you, Andy, and thank you all for joining us today to review the considerable progress we have made and our exciting prospects going forward. Certainly, this past quarter witnessed substantial and transformative momentum generated by the landmark results published in June from TrialNet At-Risk Study funded by the NIDDK and the JDRF. There is no better example of a serious autoimmune disease with long-standing need that our industry has failed to address than type 1 diabetes or T1D.At Provention, our vision is to challenge that status quo and improve the lives of patients by preventing and intercepting autoimmunity before irreversible tissue damage occurs and symptoms require lifelong chronic treatment.The At-Risk Study delivered compelling results that are propelling Provention and the T1D community forward together towards the realization of our common goal to prevent or delay disease progression in at-risk individuals.Our progress with the PRV-031 or teplizumab program validates our strategic intent and represents a landscape-changing therapeutic option for T1D and the near-term, commercially attractive and highly realizable opportunity for Provention Bio.Our mission going forward is twofold

[Operator:]

Yes. Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Pasha Sarraf with SVB Leerink.

[Dylan Dupuis:]

Hi. This is Dylan Dupuis, sitting in for Pasha. Two questions for you on teplizumab. The first one, can you talk a little bit about the sourcing of teplizumab being used in the PROTECT trial? How much of it is derived from product-on-hand from Eli Lilly, and how much is going to be needed to be produced to complete the trial? And what does that time look like relative to completion of enrollment?And then second, are the patients from the At-Risk trial still being followed? And are we anticipating any follow-up studies and data readouts from these patients longer term? Thank you.

[Ashleigh Palmer:]

Thanks, Dylan. So I'll ask Leni to talk about the At-Risk trial's follow-up. But before that, we anticipate that about two thirds of our PROTECT study will be enrolled with the teplizumab therapy that we have manufactured from previous Eli Lilly drug substance and about a third at the end of the study will be from our new source. And this will help facilitate the demonstration of comparability between the two sources. Leni?

[Eleanor Ramos:]

Hey, Dylan. So yes, we have extreme interest in following the patients from the [indiscernible] study. We are partnering with TrialNet to see how we can engage them to get additional data. And indeed, we're also anticipating a follow-on study to see if we can treat the patients from the [indiscernible] study potentially if they develop type 1 diabetes. But those are still under discussion.

[Dylan Dupuis:]

And then one last follow-up question. Just thinking longer term, bigger strategy about what redosing strategies in trials would look like in at-risk patients. Would these take place in ruled settings? Or would this be a more formal clinical trial randomization kind of approach?

[Ashleigh Palmer:]

Thank you. So I think the first thing we have to determine is what criteria we're using for redosing. Is it going to be a calendar protocol, where we administer it, say, in a year or two years? Or, are we going to be able to identify patients whose initial therapy or prior therapy maybe wearing off, so to speak, by identifying a biomarker. I think probably Francisco would be best to answer that question.

[Francisco Leon:]

Yes. Hi, Dylan. The company intends to generate actionable data about redosing. We will use a combination of our own sponsored trials and learning from the clinical use of the drug after approval.

[Dylan Dupuis:]

Okay. Thank you very much.

[Operator:]

Thank you. And at this time, I would like to return the floor to Ashleigh Palmer for any closing comments.

[Ashleigh Palmer:]

Thank you very much. So thank you, everyone, for joining us today. We look forward to providing a regulatory update later this year. Thank you.

[Operator:]

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.