Sesen Bio, Inc.
Q2 2015 Earnings Call Transcript

Published: 13 Aug 2015

[Operator:]

Welcome to Eleven Biotherapeutics Second 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 and Media Section of Eleven website at elevenbio.com. This call is the property of Eleven Biotherapeutics and recordings, reproduction or transmission of this call without the express written 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 our second quarter 2015 financial results became available at 7

[Abbie C. Celniker:]

Thank you, Leah and good morning everyone. Since our last update we continue to progress our pipeline and we will provide you with that update this morning. We continue our commitment to moving EBI-005 and EBI-031 forward in patients with ocular inflammatory diseases. Yesterday we were pleased to announce that the first patients have been dosed in the first of two planned pivotal Phase III studies of EBI-005 in allergic conjunctivitis. We also plan to initiate the IND enabling toxicology studies with EBI-031 before the end of the year and expect to file the IND in the first half of 2016. We have sufficient capital to continue to invest in these programs. Because we do not plan to pursue further development of EBI-005 in dry eye disease we are truncating the duration of the ongoing long term safety study in dry eye subjects. Randomized subjects will be treated for a minimum of three months and subjects who had already completed three months of treatment when we decided to truncate the study will complete six months of treatment. As a reminder allergic conjunctivitis is a mechanistically different ocular disease than dry eye disease due to the single central mechanism of allergen stimulation in allergic conjunctivitis, opposed to the many diverse causes of ocular surface inflammation in dry eye disease. Allergic conjunctivitis ranges in clinical severity from relatively mild common forms to more severe forms that can cause impaired vision and even in the most severe cases blindness. Of the approximately 11 million patients we believe seek treatment for allergic conjunctivitis in the United States we estimate that about half may not be well maintained on the current standard of care. These are patients that are on the more moderate to severe end of the disease spectrum. Based on our market research, of the 11 million patients approximately 4 million have moderate allergic conjunctivitis and approximately 1.8 million have severe allergic conjunctivitis and often require treatment with steroids that we know to be associated with site threatening toxicity. Our pivotal Phase III trial on allergic conjunctivitis is designed to continue to evaluate the safety and efficacy of EBI-005 for up to four weeks in patients with moderate to severe allergic conjunctivitis in an environmental setting. Based on our discussions with the FDA and advice we received from the EMA we believe that a study in the national allergy environment should help us to rapidly progress into a global registration program. Approximately 250 patients will be randomized one-to-one to receive treatment with EBI-005 or the vehicle control. These are patients that have failed or experienced an incomplete response to antihistamine and/or mast-cell stabilizers and may have required topical steroids. Our primary endpoint is ocular itching and secondary endpoints include ocular tearing, total nasal symptoms and conjunctival redness. Other endpoints include safety, tolerability and immunogenicity. Patients will keep diaries of their experience and environmental tolling [ph] counts are monitored throughout the study. We’ve also included an exploratory arm of the study where approximately 60 to 70 subjects who have completed the environmental part of the study will be further valuated following a series of direct conjunctival allergen challenges or CAPT over a period of three days while continuing to receive the study treatment. We look forward to reporting top line data from this study in the first quarter of 2016 and if the results are favorable we intend to initiate the second Phase III trial in the second half of 2015. In July Dr. Michael Goldstein, our Chief Medical Officer gave an oral presentation on ocular surface inflammation and the use of EBI-005 in patients with allergic conjunctivitis in dry eye at the International Symposium on Ocular Pharmacology and Therapeutics or ISOPT meeting in Berlin. In May at the Annual Meeting of the Association for Research in Vision and Ophthalmology or ARVO, Dr. Goldstein gave an oral presentation entitled comparison of two clinical repeat allergen challenge model to evaluate EBI-005 in the late phase inflammatory response in allergic conjunctivitis. There he described data from a Phase II study in subjects with moderate to severe allergic conjunctivitis in which EBI-005 was evaluated in two different clinical models that have been adapted for the late stage inflammatory response which is an area of high unmet need in the target allergic conjunctivitis patient population for EBI-005 that we continue to study in our Phase III program. In a poster presentation at ARVO entitled Optimized Intravitreal IL-6 Antagonist for the Treatment of Diabetic Macular Edema, 11 researchers described the preclinical data demonstrating that EBI-031 was an optimized for the drug like properties necessary for an Intravitreal IL-6 antagonist including potent blockade of known IL-6 signaling species and pharmacokinetic properties such extended vitreal retention and rapid systemic clearance. EBI-031, our most advanced pipeline candidate, a novel IL-6 antibody for the treatment of back of the eye diseases such as Diabetic Macular Edema and Uveitis continues to move forward. Based on our pharmacokinetic modeling we believe that the potency and Intravitreal retention of EBI-031 may result in the need for less frequent Intravitreal injections relative to the current standard of care therapies. Diabetic Macular Edema or DME is characterized by an abnormal accumulation of fluid in the macula, which is the portion of the retina that provides the clearest and most detailed vision. The fluid accumulation is 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 inflammation of the middle layer of the eye known as the Uvea. We are focused on filing an IND in the first half of 2016 to initiate the clinical development of EBI-031. Our enthusiasm for EBI-031 comes from the belief that by blocking IL-6 we are targeting one of the most central pathways in treating DME and other forms of Macular Edema in that IL-6 may drive blood vessel leakage in at least three ways. First IL-6 up-regulates VEGF production and the blockade of IL-6 has been observed to reduce VEGF levels, including observations following the systemic treatment with IL-6 pathway inhibitor, Tocilizumab in patients with rheumatoid arthritis. A recent publication of peer-reviewed journal Cancer Research provides insight into the second and VEGF independent mechanism where it indicated that IL-6 stimulates defective angiogenesis by antagonizing the Tie-2 pathway and thereby destabilizing vessel. Therefore blocking IL-6 may have a dual action in decreasing vascular leak by blocking VEGF production and maintaining Tie-2 activity. Additionally blocking IL-6 should diminish channel information, which we know is upstream of the initiation of vascular leak in diseases such as DME and Uveitis. We remain excited about the potential of our novel drug candidates for the treatment of ocular inflammation and look forward to continuing to update you on our process. With that I will now turn the call over to John McCabe to provide a review of the financial results for the quarter.

[John J. McCabe:]

Thank you, Abbie and good morning to all. Earlier this morning we issued a press release detailing our financial results for the second quarter of 2015. I’ll review the financial highlights first and then speak to our cash position and our financial guidance. For the second quarter of 2015 we reported a net loss of approximately $6.9 million compared to a net loss of $8.2 million for the same quarter in 2014. Total revenue for the second quarter of 2015 was approximately $100,000 compared to $800,000 for the same quarter in 2014. Research and development expenses for the second quarter of 2015 were $6.3 million compared to $6.8 million for the same period in 2014, a decrease primarily driven by lower EBI-005 dry eye disease related development expenses. G&A expenses for the second quarter of 2015 were $2.2 million compared to $2.1 million for the same period in 2014. We ended this quarter with $53.5 million in cash and cash equivalents. Based on our current operating plans we believe that we have sufficient cash and cash equivalents to fund our operating expenses and debt service obligations into the second half of 2016. With that we can open up the call for questions. Operator?

[Operator:]

Thank you. [Operator Instructions]. Our first question is from Jason Gerberry with Leerink Partners. You may begin.

[Jason M. Gerberry:]

Hi good morning. Thanks for taking my questions. Just had a couple on the Phase III allergic conjunctivitis trial, just curious if you can provide any more details, just in terms of magnitude of benefit on the ocular itching endpoint that you need to show relative to placebo in order for this Phase to be successful and any additional details you’re going to provide on the powering assumptions for the trial? And then also as you compare this to the Phase II study as it relates to the CAPT analysis just kind of curious so what are the meaningful distinctions. It all looks like treatment duration or assessment period is pretty similar. Is there any issues around rescue medication like steroid and if you can comment at all on the placebo effect that you see in general on this peak patient point of [ph] outcome? Thanks.

[Abbie C. Celniker:]

Thanks Jason. I’ll just give a brief overview and then hand it over to Mike to give you the detail. I think one of the things that’s very clear for us is that vehicle and placebo factor in allergic conjunctivitis is considerably different than that which you usually see in dry eye disease. So that’s a much less of a consideration than in AC then it is typically in dry eye disease. But I’ll let Mike talk to you about sort of the how the trial was designed, the details of what we need to show from a magnitude perspective and our powering assumptions as well as how we think about how the CAPT translates into the study we’re doing now.

[Michael H. Goldstein:]

Yeah so thank you Abbie. So in terms of the magnitude of benefit that you need to show you need to show statistically significant difference between those patients treated with the drug, and those patients treated with the vehicle for the primary endpoint. So in this case the primary endpoint is looking at subject assessment of ocular itching at multiple time points. So you need to show a statistically significant difference for that endpoint. In terms of the powering assumptions, have been powered to show for more than 90% for that particular endpoint and that data comes from the CAPT study as well as other environmental studies that have been done. And if you compare the current design to the previous CAPT, as you mentioned it’s really a similar duration study. We are actually looking at a very similar patient population and in particular we’re looking at those patients who fail standard ocular therapy which is a topical antihistamine/mast-cell stabilizer. What is different with this study that it is an environmental study where patients are assessed in a natural environment as opposed to the Phase II design where patients were actually given the direct conjunctival allergen challenge directly on to the eye. However they are similar that in that CAPT model we did it multiple times, which was really designed to get to the effect you would more likely see in the environmental setting. And finally as far as your question about rescue therapy, it is a short duration study. And the rescue therapy is not part -- of course not allowed in the study. Of course if patients are needing concomitant [ph] medication for their symptoms we will actually monitor that but that is not art of the protocol.

[Jason M. Gerberry:]

Great, just one follow-up do you have to be reach significant statistical significance on all time points or is this like an area under the curve analysis?

[Michael H. Goldstein:]

So the FDA would accept an area under the curve analysis but you need to show a statistically significant better on a majority of the pre-specified time points.

[Jason M. Gerberry:]

Okay great, thank you.

[Abbie C. Celniker:]

Thanks Jason.

[Operator:]

Thank you. All questions have been answered. Dr. Celniker?

[Abbie C. Celniker:]

Thank you once again for your participation. You may now disconnect and everybody have a wonderful day.

[Operator:]

Ladies and gentlemen this concludes today’s conference. Thanks for your participation and have a wonderful day.