TFF Pharmaceuticals, Inc.
Q3 2023 Earnings Call Transcript

Published: 14 Nov 2023

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the TFF Pharmaceuticals Third Quarter 2023 Corporate Update and Earnings Conference Call. As a reminder, this conference is being recorded. I will now turn the call over to our host, Corey Davis of LifeSci Advisors. You may begin your conference.

[Corey Davis:]

Thank you, operator. Hello, everyone, and welcome to TFF Pharmaceuticals third quarter 2023 corporate update and earnings conference call. With me on the line this afternoon, are Dr. Harlan Weisman, Chief Executive Officer of TFF Pharmaceuticals; Dr. Zamaneh Mikhak, Chief Medical Officer; and Kirk Coleman, Chief Financial Officer. Before we get started, I would like to remind everyone that this call will contain forward-looking statements, including, without limitation, statements about the anticipated timing of achievement of clinical milestones, the potential to see positive effects in our Phase 2 studies, the number of treated patients necessary to make decisions in regards to moving to Phase 3 studies, the market opportunity for our product candidates, and the expected timeframe for funding operations with cash and cash equivalents. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in all of our findings with the U.S. Securities and Exchange Commission, including the Risk Factors section of our 2022 Annual Report on Form 10-K filed with the SEC. And now, it’s my pleasure to turn the call over to Dr. Harlan Weisman. Go ahead, Harlan?

[Harlan Weisman:]

Thank you, Corey. And good afternoon, everyone. And thank you for joining us for our third quarter 2023, corporate update and earnings conference call. Last quarter, we detailed the considerable progress that we've made across a number of key areas in our ongoing Phase 2 studies of TFF VORI and TFF TAC. Based on these accomplishments and subsequent progress, we continue to expect initial clinical data from the Phase 2 studies by year end. Assuming results from both trials are positive, we believe these initial data will serve as a major catalyst for our company by providing the strongest evidence to-date of how Thin Film Freezing can improve a drug safety and efficacy in two rare disease patient populations. In anticipation of these data readouts, I'd like to spend most of our time on today's call discussing how TFF defines clinical success for both programs. We will therefore spend time reviewing what endpoints will be presented and their clinical relevance within the context of these two rare disease indications. Our Chief Medical Officer, Dr. Zamaneh Mikhak, will lead this discussion in a moment. Following her remarks, our Chief Financial Officer Kirk Coleman, will review our third quarter results. We'll then open up the call for quick Q&A. Before turning the call over to Zamaneh. I would like to briefly note, that we continue to closely manage our expenses while prioritizing how we allocate our capital resources. In August, we closed a $5.7 million equity financing, providing us with sufficient funding to reach the initial data readouts, for the TFF VORI and TFF TAC programs and extending our runway into the second quarter of 2024. Anticipating positive data from these studies, we continue to review our longer term capital planning efforts, as we think about advancing our two clinical programs into registration enabling studies. To that end, our 2023 proxy statement contains two voting items that are critical for executing our corporate strategy over the next several months, including a request to increase the company's stock authorization, and a request to implement a reverse stock split should the Board determined that it's necessary. Respectively, these two initiatives could significantly facilitate future fundraising efforts and ensure that we remain in compliance with NASDAQ listing requirements. We hope to have your support for both of these two important voting items. With that, I'll now turn the call over to Zamaneh, who will preview our upcoming data readouts for TFF VORI and TFF TAC Phase 2 programs. Zamaneh?

[Zamaneh Mikhak:]

Thank you, Harlan. As Harland mentioned, I'm pleased to review with you the type of initial data we plan to share by year end for the TFF VORI and TFF TAC Phase 2 studies. Focusing on the endpoints, their clinical relevance, and the definition of success. I'll start with TFF VORI. Let's begin with the unmet medical needs and the value proposition for TFF VORI. TFF VORI is being developed as a potential treatment for pulmonary fungal infections, including pulmonary aspergillosis starting with invasive pulmonary aspergillosis, or IPA. IPA is a life threatening fungal lung infection that primarily affects immunocompromised patients such as patients with hematologic malignancies, or individuals who receive solid organ or stem cell transplantation. Voriconazole, is first line therapy for patients with IPA. However, when administered orally or intravenously, voriconazole is associated with high rates of toxicity and drug-drug interaction. The most common toxicities associated with voriconazole resulting in its discontinuation include liver toxicity, visual disturbances and rashes. Other potential serious toxicities or arrhythmias, QT prolongation and photo sensitivity. Drug-drug interactions represent another significant limitation of oral and intravenous voriconazole. Voriconazole can increase or decrease the levels of other drugs needed for the treatment of the patient's underlying illness such as chemotherapeutic or immunosuppressive agents, driving these drugs to sub therapeutic or toxic levels respectively. Not surprisingly, the high rates of toxicities and drug-drug interactions lead to a poor prognosis. Patients with IPA have a 12-week mortality rate of approximately 30%, which clearly represents a significant unmet medical need for this rare disease. There are approximately 250,000 patients globally with invasive aspergillosis, which we believe represents a significant opportunity for TFF VORI. Thin Film Freezing technology enables us to address this opportunity by delivering voriconazole directly into the lungs where the IPA infection results. Through localized delivery, we hope to drive efficacy, while minimizing the patient's systemic exposure and thus systemic toxicities and drug-drug interactions. Our decision to advance the TFF VORI into Phase 2 testing was based upon acceptable safety and tolerability results in Phase 1 studies and positive efficacy results in two patients with pulmonary fungal infections treated with TFF VORI on a compassionate use basis. The Phase 1A study with 65 healthy volunteers and the Phase 1B study with 16 mild asthmatics demonstrated that doses up to 80 milligrams twice a day were well tolerated and showed no signs of the toxicities commonly reported for oral and intravenous voriconazole. Results from the two compassionate use patients were also favorable. Both patients had a history of recurrent pulmonary fungal infections and systemic toxicities from available antifungal standard of care therapies. As a result of treatment with TFF VORI lung function stabilized, as shown in the middle chart. Lung lesions improved, as shown on the chart to the far right and fungal infection cleared. Aspergillosis in one patient status for any other patient. In both cases, there was no need for hospitalization, treatment with TFF VORI resulted in no drug-drug interactions, and no adverse events were reported. Based on the favorable results from the Phase 1 studies and the two compassionate of use patients, a Phase 2 study was initiated in Europe. The ongoing Phase 2 trial is a randomized open label study evaluating TFF VORI versus oral voriconazole. The duration of treatment is 13 weeks, and the trial endpoints include safety and tolerability, clinical radiologic and micrologic response, as well as all-cause mortality. Before entering the 13-week treatment period, patients are screened to establish the diagnosis of proven or probable IPA. During the screening process, we gain an understanding of the patient's underlying condition that renders them immunocompromised and makes them vulnerable to fungal infections like IPA. To confirm, that the patient's infection is indeed caused by Aspergillus, by visualizing Aspergillus under the microscope, or growing it in culture, or by detecting its DNA, or by detecting galactomannan, which is a piece of the cell wall of Aspergillus that can break off and enter the bloodstream. We document the signs and symptoms caused by the infection with Aspergillus such as fever, chest pain, coughing up blood, and shortness of breath and record their severity. We examined the impact of the infection on lung function, so spirometry, which is a test of how much air the patient can inhale, or exhale, and how fast. For example, FEV1 of forced expiratory volume 1, which measures the maximum amount of air a patient can forcefully exhale in one second, can be decreased in the setting of IPA. Finally, we assess the impact of infection and lung structures to do chest CT imaging and look for abnormalities such as nodules or spots in the lungs, or cavities. The parameters that established the disease status at baseline, such as evidence of infection, signs and symptoms, lung function and lung structure abnormalities on the endpoints of the study. Overall, treatment response is assessed by mycological response, defined as clearance of Aspergillus infection, like clinical response, defined as improvement in signs and symptoms or lung function via spirometry and or by radiologic response, defined as improvement in lung structure via chest CT. Once through the screening process, patients enter the treatment period of their trial and are randomized in a 3

[Kirk Coleman:]

Thank you very much, Zamaneh. Our cash and cash equivalents as of September 30 2023 were $9.7 million, based on gross proceeds of $5.7 million received from the financing transaction that closed on August 17. Our current cash runway is expected to fund operations into the second quarter of 2024. We remain mindful of our capital resources and continue to monitor our expenses to ensure we are only spending on our core activities. Research and development expenses for the third quarter of 2023 for $2.4 million, compared to $4 million for the comparable period in 2022. The $1.6 million decrease year over year is primarily results of reduced clinical and manufacturing expenses. General and administrative expenses for the third quarter of 2023 for $2.3 million, compared to $3.3 million for the comparable period in 2022. The $1 million decrease year-over-year is primarily related to decreased professional fees, patent expenses, insurance, consulting, market research, payroll, and related expenses. The net loss for the third quarter of 2023 of $4.4 million, compared to a net loss of $7.3 million in the comparable period in 2022. And now I'll turn the call back over to Harlan.

[Harlan Weisman:]

Thank you, Kirk. I hope today's call has provided you with a clearer understanding of our TFF VORI and TFF TAC Phase 2 trial designs, clinical endpoints, and most importantly, with the value we hope to bring to patients who are suffering from these two rare diseases. I think it's also worth mentioning once again, that relative to clinical programs involving new chemical entities, we believe that development risk associated with the TFF VORI and TFF TAC programs is significantly reduced, given the well-established historical data available for these molecules. Generating positive results in our Phase 2 studies will further validate our technology and demonstrate how our lead pipeline assets, TFF VORI and TFF TAC represents significant improvements over the current standard of care. I would like to thank our shareholders for your continued support and confidence in TFF Pharmaceuticals, and we look forward to updating you on our progress throughout the rest of the year. That concludes our formal remarks. And I'd now like to open the call up for the question and answer session. Operator.

[Operator:]

[Operator Instructions] Your first question is from Jonathan Aschoff from ROTH. Please ask your question.

[Jonathan Aschoff:]

Thank you. Good afternoon, guys. I know that you're not giving precise enrollment or any enrollment update. But what can you qualitatively say about how enrollment has improved you know, between now and second quarter call, specifically for VORI?

[Harlan Weisman:]

Jonathan, hi. Thanks for your question. I'll turn that over to Zamaneh.

[Zamaneh Mikhak:]

Hi, Jonathan. Thanks for the question. We have 95% of our sites active at this point, and 90% of them are actively prescreening. Because of that, our enrollment rate has increased very significantly. And now we match what is generally the enrollment rate in IPA Phase 2 clinical trials. You know, to enroll a clinical trial, you need to have active site, that is you need to have hospitals with investigators have investigators, study coordinators, nurses, pharmacists, that are fully trained in the conduct of the study. And you have to have the right equipment there for measuring safety and efficacy parameters. And then you have to have drug on site for dosing your patients. We spend pretty much the first half of 2023, activating our clinical trial sites, and then amending our protocol to broaden our eligibility and also to change the randomization ratio from 1

[Jonathan Aschoff:]

I'm thinking, what is the size of your phase 2 programs, say, about what we might expect for Phase 3 enrollment numbers?

[Zamaneh Mikhak:]

In terms of enrollment…

[Harlan Weisman:]

Jonathan, in terms of…

[Jonathan Aschoff:]

Go ahead.

[Zamaneh Mikhak:]

Sure. In terms ofenrollment rate…

[Jonathan Aschoff:]

Enrollment numbers, size of the trial?

[Zamaneh Mikhak:]

I see. A size of the trial is something that we are still working on. And ultimately, we will need to have FDA feedback, before we can finalize any particular type of plan. No matter what the size of the trial, what we expect is that the enrollment rate for the Phase 3 would be in general faster than enrollment for Phase 2, that's generally the case in Phase 3 trials, because especially if all-cause mortality, or any type of mortality is part of the endpoints of this study, you allow patients that are generally sicker into the study. And by the time you're doing a phase 3, you have more clinical data, when that helps in general with enrollment with investigators and patients participating. So generally speaking, we expect enrollment rates to be higher for our Phase 3. But in terms of the total sample size and what the number would be, we really have to finalize that after we've had FDA interaction.

[Jonathan Aschoff:]

Okay. So 10 patients is enough for your go or no go Phase 2 decision. But, these 10 patients -- is 10 patients, something that's also sufficient to be able to have an end of Phase 2 meeting with the FDA and get their sign off for the Phase 3 program design?

[Zamaneh Mikhak:]

Sure. Harlan, I take that one.

[Harlan Weisman:]

Yes, go ahead.

[Zamaneh Mikhak:]

So, we anticipate that data from approximately 10 patients will be sufficient for us to hold a meeting with the FDA to present our thoughts and questions to get feedback on the Phase 3 trial design. We really go back to the concept that voriconazole is not a new chemical entity, there is a great deal of safety tolerability, and efficacy data about voriconazole and tacrolimus for that matter. We know these are active drugs, active ingredients with desired pharmacodynamic effect. And also, we know that we're in rare -- two rare indications. So because of that we believe the data from 10 patients will be quite informative, and it will allow us to interact with the FDA get feedback. And we plan to do that as early as possible and as often as possible, such as we come to a Phase 3 design that's efficient and optimized for the indication.

[Jonathan Aschoff:]

Okay, so this is the first time that you're saying year end ‘23, first, some amount of data and one quarter ‘24. For more data, this is for VORI. In particular, I don't think you said that about TAC. What's going to be the difference in those two data releases is 1Q ‘24, going to be more patients with the same parameters, or are you going to have different parameters on the same number of patients, how those two release are going to differ?

[Zamaneh Mikhak:]

Sure, it's a combination. We expect to have data on a subset of patients by year end, and present all the data we have. So some patients will have finished the 12 weeks of treatment, and some patients will have finished eight weeks, and some will have finished four weeks, and some will have finished two weeks of treatment. So we will present all the data that we have on the subset of patients and then we will have a more complete dataset with say approximately 10 patients and the parameters that we discussed by the end of first quarter 2024.

[Jonathan Aschoff:]

Okay, so it's highly likely more likely than not that you won't have 10 patients by the end of this year, but you'll have them by the end of first quarter. Is that accurate?

[Zamaneh Mikhak:]

That is accurate.

[Jonathan Aschoff:]

All right. Thank you very much.

[Operator:]

Thank you. Your next question is from Justin Walsh from Jones training, please ask your question.

[Justin Walsh:]

Hi, thanks for taking the questions. I guess a couple related to the data release and your potential end of Phase 2 meeting with the FDA. I'm just trying to get a sense of what expectations people should be thinking about with respect to the level of efficacy that they would be looking for, and maybe what other forms of either adverse events or safety concerns that the FDA might be looking out for. Like you mentioned, both voriconazole and tacrolimus are very well known. So they know the overall profile. But I don't know if there's something maybe more specific with an inhalable formulation that they'll want to have information on. So any more details on that would be helpful.

[Harlan Weisman:]

Justin, thank you for the question. And again, Zamaneh, that seems that you're best positioned to answer that.

[Zamaneh Mikhak:]

Sure. With respect to safety and tolerability, there are certainly certain adverse events that are very common when you use oral or intravenous voriconazole. Then three top reasons for discontinuing voriconazole is hepatic toxicity. Liver function tests go up 3,4,5 times the upper limit of normal and at some point, physicians decide whether your patient has signs and symptoms of hepatic toxicity, this is getting too uncomfortable and they stop oral or intravenous voriconazole. Visual disturbances are quite uncomfortable for patients. It's a very common reason for discontinuing treatment. Rashes are very common. So we will certainly -- we are suddenly looking for all of these types of adverse events and following those and we expected to certainly report on adverse events in a comparative way compared with the historical data. With respect to what types of signs and symptoms might be common to or might happen with inhaled therapy, certainly with any type of inhaled therapy, you look for evidence of bronchospasm or uncontrollable costs or things of the sort and certainly we follow those and we also plan to report on those in the upcoming data release. We will report what we have, we will report the data and that's available to us by the end of this year, and share that both in terms of safety tolerability and efficacy. It will be in a subset of patients. And as I mentioned, patients will have been treated for varying amounts of times, we do believe what we present will be directionally informative, in the same way that there to compassionate use patients that we originally presented was very informative. So we expect that will form the base of than the data, the more complete data set that will share by the end of first quarter 2024.

[Justin Walsh:]

Great, thanks. And just one more for me, obviously, the big focus has been on, rightly so on TFF VORI and TFF TAC, but maybe just provide a quick commentary on some of the other work that you guys have been doing and maybe some other things that you might be excited about that possible applications of Thin Film Freezing that you'd like to highlight.

[Harlan Weisman:]

Yes, so I'll take that. While we're continuing our collaborations with pharma and biotech companies. And we've been able to demonstrate that the technology has utility in creating dry powder formulations for a variety of molecules like monoclonal antibodies, vaccines, RNAs, other biologics as well as small molecules. As an example, last week, we announced the publication of results of our collaboration with Aptar Pharma, where we use the TFF process to convert a monoclonal antibody into an aerosol and [indiscernible] on dry powder that we can deliver into the posterior nasal cavity using the after those nasal spray systems. But, Justin it's important to emphasize that it's too early to say whether any of these collaborations will result in a meaningful business opportunity for the company and review all of them as the potential upside to the tremendous potential TFF VORI and TFF TAC.

[Justin Walsh:]

Great, thanks for taking the questions.

[Operator:]

Thank you. Your next question is from Daniel Carlson from Tailwinds. Please ask your question.

[Daniel Carlson:]

Guys, thanks for taking my questions. Just, on VORI and TAC, cash is tight. At some point, if you had to make a choice between the programs, how would you decide which one to move forward on?

[Harlan Weisman:]

Yes. Hi, Dan, and thanks for participating and asking your question. Well, of course, we'd like to go forward with both programs. But we're going to let the data drive our decisions. We will have to consider the potential for each commercially, things like acute versus chronic treatment, the competitive environment, it also is going to depend on interactions with the FDA and our ability to raise appropriate funds for both programs.

[Daniel Carlson:]

Got you. Okay. And then do you had an SBIR grant for, I think $3 million for a universal flu vaccine program. Can you talk about the status of that?

[Harlan Weisman:]

Sure. This is a collaborative research program with the Cleveland Clinic, it's well underway. Although the goal of the program is to develop an IND ready vaccine, that's probably three years away. Initial work is focused on developing formulations. And once we've completed this formulation work, we'll begin animal testing. It's important to say that the program underscores the recognition of our technology with entities such as the NIH and our ability to create great like Thin Film Freezing formulations, which can be applied broadly including in this program for a universal off the shelf vaccine. And it's also a perfect example of the potential for additional non-dilutive financing.

[Daniel Carlson:]

Got you. Okay. Thanks, guys. Appreciate the update.

[Harlan Weisman:]

Thank you. Thanks, Dan.

[Operator:]

Thank you. There are no further questions at this time, I will now hand the call back to Harlan, for closing remarks.

[Harlan Weisman:]

Well, once again, I appreciate all the participants in today's call and hearing our update, particularly appreciate the support of our investors who have had faith in us and we're looking-forward to presenting the initial data from our clinical programs at the end of the year. Thank you and good evening.

[Operator:]

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining you may all disconnect.