Sesen Bio, Inc.
Q1 2015 Earnings Call Transcript

Published: 2 May 2015

[Operator:]

Good day ladies and gentlemen and welcome to Eleven Biotherapeutics First Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors & Media Section of Eleven’s website at elevenbio.com. This call is the property of Eleven Biotherapeutics and recordings, reproduction or transmission of this call without the written express consent of Eleven Biotherapeutics is strictly prohibited. As a reminder, today’s call is being recorded. I would now like to introduce Leah Monteiro, Corporate Communications Manager of Eleven Biotherapeutics.

[Leah Monteiro:]

Thank you. Good morning. The press release of the first quarter 2015 financial results became available at 7

[Abbie Celniker:]

Thank you, Leah and good morning everyone. Before I walk through our programs in more detail I want to turn up by saying that we believe 2015 will be a transformative year for Eleven with important pivotal Phase III data readouts of EBI-005, in dry eye disease expected later this quarter and our Phase III EBI-005 allergic conjunctivitis set to begin in the second half of this year. As we have previously described IL-1 receptor inhibitor has been shown by us with EBI-005 and also by our founder Dr. Reza Dana with anakinra to be an effective mechanism to address this inflammatory disease of the eye. EBI-005 has also been shown to be well tolerated with no treatment related effects [ph] reported. We continue to invest in our preclinical pipeline which includes EBI-031 developed using our AMP-Rx protein engineering platform for the treatment of the back of the eye diseases such as Diabetic Macular Edema and Uveitis. We look forward to reporting additional data on EBI-031 next week at the Association for Research in Vision and Ophthalmology or ARVO annual meeting. We expect to file an IND before the end of the year and we continue to pursue our mission of designing and developing first of kind protein therapeutics to treat ocular diseases in new and effective ways. Now I’d like to walk you through the highlights of our lead program EBI-005 in dry eye disease. Treatment for dry eye remains an area of high unmet clinical need for many patients. There is just one currently approved therapy which states, which addresses the needs of a fraction of dry eye patient. As many of you know dry disease is a disease of the ocular surface characterized by dryness, pain, discomfort and irritation. In its most severe form dry disease patients suffer from chronic pain and blurred vision which can significantly reduce the person quality of life. Dry eye disease is one of the leading causes of patient's visits to eye care professionals in the United States. According to Market Scope, a publisher of research and analysis on the ophthalmic market, approximately 68 million people in the United States, European Union, Japan and other developed market have dry eye disease, including approximately 26 million people who suffer from the moderate to severe forms of dry eye disease. Approximately 19 million people in the United States have dry eye disease, including approximately seven million people who suffer from the moderate to severe form of dry eye. Recent market data suggest that increased time, underlying auto immune diseases and the ageing population are linked to increased incidence of disease; therefore we can expect the dry eye market to continue expanding. We look forward to reporting topline data from our Phase III study of EBI-005 in dry eye disease later this quarter and are planning to begin a second Phase III study later this year. As a reminder, the current study includes 669 patients at 45 sites in the U.S. Enrolment in this study completed during the fourth quarter of last year. We expect initial topline analysis will include mean change from base line and magnitude of response for the signs and symptoms of dry eye disease in the EBI-005 treated patients compared to the vehicle controlled treated patients and we will be reporting on EBI-005 safety and tolerability. We are on track to report data in this quarter and as noted in this morning’s press release we expect to report data sometime after ARVO As discussed in our press release last week, we are excited to have one oral presentation and two posts which was accepted at ARVO which together reflect the breadth of clinical and preclinical data coming out of our research pipeline and supports the design of this pivotal phase III dry eye diseases study. Our ongoing safety study in dry eye disease continues to enroll at multiple centers in the U.S. and Canada. This randomized double mass vehicle controlled Phase III study is designed to evaluate the safety of EBI-005 tropical solution given three times daily over a one year period. We are particularly excited about this study as it will provide valuable insight into the long term effects of EBI-005 on the quality of life for patients suffering from moderate to severe dry eye disease. We continue to invest in required chemistry manufacturing and control or CMC activities and have a robust manufacturing process which is being actively validated in support of our plan BLA filing and commercial effort. We are excited about the global regulatory pathway which continues to evolve. We believe Shire’s filing of their NDA for Lifitegrast last quarter is a positive for us. And as a priority review they receive from the FDA highlights the need for treatments in this space. We view this as an illustration of the FDAs collaborative thinking of ways to show sign and symptom benefit, further supported what we’ve seen by what we’ve seen in the EU with the approval of icurve is based on a sign, data and a biomarker. We look forward to continuing our discussions with the FDA and EMEA. In addition the increased product offering in this space is good for patients and we are excited to participate with what we think is a differentiated product profile. Turning to EBI-005 and allergic conjunctivitis we presented data at the American Society of Cataract and Refractive Surgery or ASCRS earlier this month demonstrating the statistically significant improvements in ocular itching, ocular tearing and nasal symptoms associated with the late phase allergen response in patients with allergic conjunctivitis utilizing a modified direct conjunctivitis allergen challenged model. We will also be presenting additional data on this topic at ARVO. Our oral presentation provides an excellent opportunity to further describe or Phase 3 study in subjects with late phase allergic conjunctivitis in which EBI-005 was evaluated in two different clinical models adopted for the late Phase inflammatory response. We are also pleased to announce that our paper titled, Phase 2 exploratory study of a novel Interleukin-1 receptor inhibitor EBI-005 in the treatment of moderate to severe allergic conjunctivitis was published in the May issue of eye and contact lens. This paper leads further insight into the Phase 2 clinical data for EBI-005 in allergic conjunctivitis describing the models that we used to evaluate the late phase allergen response in this patient population. Our Phase 2 study included 159 patients with moderate to severe allergic conjunctivitis randomized to receive topical EBI-005 at 5 milligrams per ml or vehicle control given three times a day while being repeatedly challenged with allergen using an adaption of two clinical models of allergic conjunctivitis. The results of this phase 2 study confirms that we are addressing the underlying information which drives the late phase allergen response and at EBI-005 is well positioned to address the up to 5.8 million moderate to severe allergic conjunctivitis patients still in need of better therapies. We plan to initiate a phase 3 study in allergic conjunctivitis in the second half of the year. Based on our discussions with the FDA, and advice we received from the EMEA, we believe that a natural environment study should allow us to rapidly progress into a global registration program moving to our preclinical pipeline EBI-031 our most advanced product candidate which is a novel anti IO6 antibody for the treatment of back of the eye diseases such as Diabetic Macular Edema and Uveitis continues to move forward. At ARVO next week we will present additional data demonstrating higher potency and longer Intravitreal retention which may lead to less frequent injections relative to the current standard of care. We also encourage you to review two publication, Mesquita Adol [ph] from the journal ophthalmology in 2014 and [Indiscernible] in arthritis and rheumatism in June 2003. These articles further describe their role of an IO6 phase in certain inflammatory pathways and demonstrate continued evidence of the IO6 mechanism. Mesquita [ph] provides evidence of an IO6 pathway antagonist Tocilizumab to check how it can reduce [Indiscernible] Macular Edema in Uveitis patient. While the Nakahara [ph] papers show that the IO6 pathway blockade with Tocilizumab reduces systemic VEGF levels in patients with rheumatoid arthritis. Diabetic Macular Edema or DME is characterized by an abnormal accumulation of Fluid in the Macular. The portion of the retina that provides the clear and most detailed vision due to leakage from blood vessels in the retina. According to the American Diabetes Association, DME is one of the most common causes of vision loss in the U.S. Uveitis is a heterogeneous group of ocular condition that are characterized by implantation [ph] in the middle layer of the eye and is the Uvea. We recently completed a pre eye ending meeting with the FDA to gain alignment on our non-clinical CMC and Clinical Plant and are excited to move forward with EBI-031. And we are very excited about our overall coming milestone, the use of EBI-005 and two indications and advancing EBI-031 towards the clinic. With that, I will now turn the call over to Greg Perry to provide a review of the financial results for the quarter.

[Greg Perry:]

Thanks, Abbie. Earlier this morning, we issued a press release detailing our financial results for the first quarter of 2015. I’ll review the financial highlights first and then speak to our cash position and our financial guidance. During the first quarter we filed a shelf registration along with an aftermarket facility or ATM to position the company to efficiently raise and meet the capital with our mission of quickly bringing new treatments to patients in need. Earlier this month we sold common shares for gross proceeds totaling about $12.8 million. The ATM facility was about – has a $27 million of additional capacity remaining. Turning to our financial results for the first quarter of 2015 we reported a net loss for approximately$6.5 million compared to a net loss of $7.7 million for the same quarter in 2014. Total revenue for the first quarter of 2015 was about $200,000 compared to $600,000 for the same quarter in 2014. Research and development expenses for the first quarter of 2015 were $5.2 million compared to $5.8 million for the same period in 2014, a decrease primarily driven by EBI-005 related development expenses. G&A expenses for the first quarter of 2015 were $2.6 million compared to $1.9 million for the same period in 2014 and this increase was driven primarily by higher expenses related to operating as a public company since February of 2014 and increased stock-based compensation expense. We ended the first quarter with about $45.5 million in cash and cash equivalents and based on current operating plans, we believe that we have sufficient cash and cash equivalents to fund our operating expenses, debt service obligations and capital expenditure requirements into 2016. Turning to an update on business development initiatives we continue to believe that Eleven can create substantial value by commercializing EBI-005 in the U.S. on our own. We’ll be looking to partner EBI-005 outside the U.S. to accelerate its development and commercialization globally. And the recent approval icurve in Europe and the growing awareness of the significant unmet need that exist around the world and drive patients and allergic conjunctivitis patients were factored into currently approved therapies supports our view that there is substantial opportunity for value creation ex-U.S. And with that we can open the call for questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Jason Gerberry with Leerink Partners. Your line is now open. Your question, please.

[Jason Gerberry:]

Hi. Good morning. Thanks for taking questions. First one just for Abbie, just your evolving views on the FDA climate based on the decision to grant charge-less photographs [ph] priority review and basically what that means for needing to satisfy both co-primary endpoints. And then may second question is kind of similar but little bit different in that. How you think about weighting signs versus symptoms as we go forward here. Obviously, when we see your data, I’m just kind of curious how we should think about which is more importantly ultimately in the regulators eye signs or symptoms or just impossible to know? Thanks.

[Abbie Celniker:]

Thanks, Jason. Yes. So the two – answering the two question is kind a continuum from my perspective. So first of all going to the priority review, we were really excited to see that because we really believe that this indicates that the FDA has really firmly taken the positions that there’s a really high unmet clinical needs and that we really need to push things through and get things into the hands of patients as quickly as possible. And there’s no more tangible way for them do that then to assign this priority review which gives very favorable PDUFA date. So, I think that the most important aspect of that is the FDA’s recognition of the high unmet need. With regard to totality of the data which is how typically Shire has been referring to the way the analysis would be done. I think the FDA has been pretty consistent in suggesting that the reason that they require sign and symptoms is because they need those two endpoints to support each other. So that because of the subjective reporting of symptoms by patients and the more objective reporting of signs by docs, I think they feel by requesting both of those you find that there are supportive data for one or the other. And so in the case with Shire’s data that has been reported to be probably more robust on their symptom data than their sign data, I think they’re emphasizing the symptom data and supporting it with sign. However, what’s really interesting is if you consider what happened in Europe with icurve is they were approved on signing data with support from a Biomaker and I think that was really interesting about this is that it’s clear recognition that this an ocular surface inflammatory disease that is manifest in most patients with relatively severe symptoms, but that there is an inflammatory component to this disease that can be detected by signs. So, to your last question I’m not so sure that there’s an emphasis on signs versus symptoms at this point in time. But an understanding that if you can find the way that shows that signs and symptoms support each other that that totality of the data is indicative of something that’s going address the unmet need per patient.

[Jason Gerberry:]

Okay. And if I could just squeeze in a follow-up, I know that in Greg’s prepared remarks talked about a go-to-loan strategy in the U.S. and I’m sort of curious how you think about evaluation inflection points, because [Indiscernible] obviously choose to monetize their asset after they first Phase 3 was complete. And I’m just kind of curious if you guys are – do you think that after the first Phase 3 but it reads out if you entertain partnership or sale option?

[Abbie Celniker:]

I’m actually going to let Greg fills that question primarily, but basically I do want to emphasize that from our perspective we think that we can create great value for our shareholders by accelerating the development of this molecule and getting it into the hands of patients as quickly as possible and into the hands of the physicians who are really looking for something to treat these patients with, but Greg may you want to expand on that.

[Greg Perry:]

I think that’s correct, I mean, we do plan on entering into a process for seeking a partnership ex-U.S. pending the release of this data and obviously we think that there is probably going to be significantly interest in the U.S. because the amount of value that’s there. But again as I spoke in my prepared remarks we do believe that this is a value creation opportunity that we can realize on behalf of Eleven’s shareholders and so that’s going to be a primary objective.

[Jason Gerberry:]

Got it. Great. Thank you.

[Abbie Celniker:]

Thanks, Jason.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from the line of Tyler Van Buren with Cowen and Company. Your line is now open. Your question please.

[Tyler Van Buren:]

Hi. Thanks for taking my question. I was hoping you guys could just go over what’s going to be in the top line analysis one more time. I was hoping if I recall correctly it’s going to mean change from baseline and magnitude of response and also specifically what you’ll be looking at as to what inform the second pivotal study. Clearly, if you hit both end points I would imagine you would just repeat it. But as in the situation that one endpoint is hit versus the other, do you thing they will largely be patient selection issue that one form the second pivotal study or what else could you be looking at. And also what could be the potential timing on that second pivotal study initiation? Thanks

[Abbie Celniker:]

So, thanks for the question Tyler. I’ll answer you last question and then maybe handed over to Mike to give more details on what will actually be reporting and how we’ll be looking at the data. So right now our goal is to start the second pivotal study in the second half of the year. We really – we’ve described in our conversations over the last months, it’s our objective to get the data and rapidly be able to communicate with the FDA that confirm our plans and then start our trial. I think that with regard to their potential outcome that you mentioned if you hit both signs and symptoms we feel like it’s a pretty rapid progress to the next trial. And if we have to adjust our trial based on other outcomes we still believe that we can have those conversations rapidly in order to move forward in the second half of the year. So, I will hand it to Mike to talk a little bit more about what you can expect with what will be reported.

[Michael Goldstein:]

So the co-primary endpoints of the trial are clinical meaning sign and clinical meaningful symptom. So the clinical meaningful sign is total [Indiscernible] and the clinical meaningful symptom is the painful sore eye component from the OSDI questionnaire and so for both those primary endpoints will be reporting the change from baseline of the patients treated EBI-005 compared to the main change from baseline or those treated with vehicle and that we’ll also be reporting the magnitude of response of the change from baseline for each of those co-primary endpoints. In addition there is a number of pre-specified secondary endpoints in the trial and those will also be reported. Those would include other symptom measures as well as other points in time in the trial.

[Abbie Celniker:]

Tyler, to add to what Mike was just saying you’d mentioned this question about patient selection, one of the things that we wanted to remind you is that in this trial we had enrollment criteria based on both signs and symptoms so that we do understand the patient population and as you know as we move from our inflammatory [ph] Phase 2 trial into this pivotal trial. We understood that we wanted to focus on patient choose OSTI scores were below 50 between 23 and 50. And so, we believe that we already really had a pretty in-depth understanding of the patient population. However, as you indicated there maybe any to refine this further for future studies and that is something that we will look into in our trial. But right now I think that our bigger focus in on the primary and potentially secondary endpoints that will come out.

[Tyler Van Buren:]

Great. Thanks so much.

[Operator:]

Thank you. Our next question comes from the line of Caroline Corner with Cantor Fitzgerald Your line is now open. Your question please.

[Caroline Corner:]

Hi, guys. Congratulations on progress recently. I just had questions on the about dry eye and sore [ph] market, but as you get closer to this Phase 3 data and get closer to hopefully ultimate approval, could you just speak a little bit to the market and what you think you’ll see in the competitive pace based on your time lines for approval. What you think will be out there and how your product will fit into kind of the commercial landscape and as far as addressable market and what part of the market you will able to approach? Thanks so much.

[Abbie Celniker:]

Thanks. I appreciate the questions. I’ll start and then hand it to Mike who can give you the perspective of practicing ocular surface ophthalmologist so I think I have some interesting perspectives on how multiple program could play in the market. So, from our perspective right now obviously Restasis is the only currently approved drug. And as we know there’s a bit of longer onset of actions for Restasis and there are some tolerability issues that might reduce the number of patients which is to on Restasis. So, what we believe is that any drug that comes on to market after Restasis has to be more efficacious and have more rapid onset of action and has to be more tolerable. I think we see that progress with what’s been reported by Shire to-date and we’re excited what that opportunity represent for patients and for providers. But we also know is that if drug has and even better tolerability profile has a rapid onset of action and potentially has a higher magnitude of response that that’s the kind of drug that would be able to see rapid uptake by providers and provide relief to physicians. So, there is 7 million patients with moderate to severe dry eye which is we’re targeting these therapeutic at any point in time we think about 1 million. Our currently on therapy with Restasis, so what you can see is that as different and differentiated products are introduced to the market, patients are going to have a greater awareness of this. And we believe that you see expanded numbers of patients on these therapies as well as what we mentioned with the idea that that market itself could be expanding. I’m going to ask Mike to just comment on the kind of therapeutic profile that would really encourage our physicians put their patients on a drug like EBI-005.

[Michael Goldstein:]

Yes. Well, thank you Abbie. As Abbie mentioned from clinical perspective dry eye represent possibly our areas of greatest unmet need, but it’s certainly one of the most common reasons that patients come into the eye care professional. So, things that are very attractive about EBI-005 in terms of where would fit into the competitive landscape are the very high safety and tolerability profile that we have shown so far. The rapid onset action of clinical affect and the magnitude of clinical affect that we’ve demonstrated. All of these are would be potential big opportunities in this market. And there’s one other huge opportunity is the percentage of responders and that not all patients respond to this place whereas what we’ve seen thus far there’s been a number of – there’s a very high percentage of patients who show respond to EBI-005. So I think these all represents areas of great clinical opportunity.

[Abbie Celniker:]

Thank you.

[Operator:]

Thank you. I’m showing no further question in the phone queue at this time. I’d like hand the call over to Dr. Celniker for any closing remark.

[Abbie Celniker:]

Thank you. And thanks once again for all your participation. You may now disconnect. And I hope everybody has a great day. Thanks again.