BiomX Inc. (NYSE:PHGE) Q2 2022 Earnings Conference Call August 10, 2022 8:00 AM ET
Company Participants
Marina Wolfson – Chief Financial Officer
Jonathan Solomon – Chief Executive Officer
Conference Call Participants
Joe Pantginis – H.C. Wainwright
Kristen Kluska – Cantor Fitzgerald
Michael Higgins – Ladenburg Thalmann
Keay Nakae – Chardan
Operator
Good morning. And welcome to BiomX Second Quarter 2022 Financial Results and Corporate Update Conference Call. Currently, all participants are in a listen-only mode. There will be a question-and-answer session at the end of this call.
I would now like to turn the call over to Marina Wolfson, Chief Financial Officer of BiomX. Please proceed.
Marina Wolfson
Thank you. And welcome to the BiomX second quarter 2022 financial results and corporate update conference call. The news release became available just after 6:30 AM Eastern Time today and can be found in our website at biomx.com. A replay of this call will be available on the Investor Section of our website.
Before we begin, I’d like to review the Safe Harbor provision. All statements on this call that are not factual or historic statements may be deemed forward-looking statements. For instance, we’re using forward-looking statements when we discuss on the conference call potential market opportunities; the design; aim; expected timing; interim and final results of our pre-clinical and clinical trials, the sufficiency of our existing cash, cash equivalents and short-term deposits. The potential receipt of additional funds if milestones are met. The potential benefits of our product candidates and potential growth and shareholder value.
In addition, past preclinical and clinical results, as well as compassionate use are not indicative and do not guarantee future success of our clinical trial. Except as required by law, we do not undertake to update forward-looking statements. The full Safe Harbor provisions, including risks that could cause actual results to differ from these forward-looking statements are outlined in today’s press release, which is noted earlier is on our website.
Joining me on the call this morning is Jonathan Solomon, Chief Executive Officer of BiomX. With that, I will turn the call over to Jonathan.
Jonathan Solomon
Thank you, Marina, and good morning, everyone. The second quarter of 2022 proved to be a highly productive period for our company. We dosed the first patient in our cystic fibrosis program, announced a second collaboration with Boehringer Ingelheim, published important new research supportive of our inflammatory bowel disease program and technology platform and successfully completed a restructuring to further extend our cash runway.
Let me first provide an update on our cystic fibrosis program. In June, we announced the dosing of the first two patients in the company’s Phase 1b/2a study evaluating BX004 with the treatment of chronic respiratory infections in patients with cystic fibrosis. This was clearly a very important milestone for the CF program, and I’m pleased to report that despite the challenges facing many companies with respect to patient recruitment, we continue to make steady progress with respect to enrollment in this study.
As a reminder, BiomX is developing BX004 for the treatment of CF patients with chronic respiratory infections caused by Pseudomonas aeruginosa, or PSA, a main contributor to morbidity and mortality in patients with CF.
The Phase 1b/2a study of BX004 is composed of two parts; part one, we’ll evaluate the safety, pharmacokinetics and microbiologic clinical activity of BX004 in eight patients in a single ascending dose and multiple dose design, and provided that the pace of enrollment for the study will continue as expected, we anticipate the results of the first part of the study by the end of the third quarter of 2022.
Part 2 of the study will evaluate the safety and efficacy of BX004 in 24 CASH FLOW patients, randomized through treatment or placebo cohort in a 2:1 ratio and results from Part 2 are expected in the first quarter of 2023.
As a reminder, the opportunity to address lung infections in CF remains substantial, given both the size of the patient population and how few treatment options are currently available. Between the US and EU alone, there are approximately 70,000 to 80,000 patients living with CF and is estimated that more than 60% of adults with CF are infected with this bacteria.
PSA infections are the leading cause of loss of lung function in people CF. And after patients have been infected with PSA in their lungs. The infection is exceptionally difficult to fully eradicate
We are encouraged to see a growing body of clinical research and scientific publications that provide evidence supporting the use of phage therapy for the treatment of lung infections in CF. At the 2021 North American Cystic Fibrosis Conference, researchers from the Yale School of Medicine presented data on six patients with multidrug-resistant Pseudomonas aeruginosa were treated with inhaled phage twice daily for 7 days to 10 days.
The purpose of the study was to interrogate the mechanism by which phage suppressed P. aeruginosa [indiscernible] production and the effect on lung inflammation. Results show that the phage therapy was safe and showed significant reduction in pseudomonas aeruginosa titers. In addition, phage therapy also led an improvement in lung function.
As noted in our past calls, Yale University has been the forefront of developing phage-based treatment to help address multi-drug-resistant lung infections in CF patients. And through its ongoing compassionate use study, valuable clinical evidence is being generated to support this treatment approach.
In June 2022, researchers from UCSD and other academic institutions published a paper in the journal Clinical Infectious Disease entitled Phage Therapy of Mycobacterium infections and passionate use of phage in 20 patients with drug-resistant Mycobacterial disease.
In the study, Mycobacterium eyesight in 200 [indiscernible] positive patients with symptomatic disease was screened and phage susceptibilities. One or more lytic phage were identified for 55 isolates. phage therapy was then administered to 20 patients on a compassionate use basis and patients were monitored for adverse reactions, clinical microbiological responses, the emergence of phage resistance and phage neutralization in serum sputum and Bronchoalveolar lavage fluid.
Result from the trial showed favorable clinical or microbiological response in 11 patients, and no adverse reactions were attributed to therapy in any patients regardless of the pathogen phage administered or the [indiscernible] delivery.
Awareness surrounding the BiomX CF program is also continuing to grow. On May 12, we hosted a KOL Webinar to discuss the treatment landscape for CF patients with chronic lung infections and the potential of BX004 to address patients with chronic PsA infections.
The webinar featured presentations from key opinion leaders, Dr. Dave Nichols and Dr. Saima Aslam, who discussed phage therapy, the current treatment landscape and the unmet medical need in CF patients with chronic PsA pulmonary infections. We then presented the BX004 as a potential treatment solution, providing a review of the phage candidates preclinical activity and an overview of the ongoing clinical development plan.
A recording of the webinar is accessible through the Investors section of our corporate website. We believe that enthusiasm appears to be building for exploring the potential phage therapy in treating CF patients struggling with multidrug-resistant bacterial infections, with so few treatment options available, we are very pleased to see a growing body of clinical evidence and published research that points toward the potential of phage therapy to play an important role in helping CF patients combat these persistent difficult-to-treat infections.
Given its significant unmet medical need for these patients, BX004 program remains our clinical development priority at BiomX, and we look forward to presenting our initial clinical findings in the near future.
Turning to our recent partner activity. We were also very pleased to announce the second collaboration with Boehringer Ingelheim during the quarter. Under the new collaboration agreement, BiomX will utilize its XMarker microbiome-based biomarker discovery platform to identify biomarkers for a pathogenic bacterium thought to be associated with IBD. Such biomarkers could help identify IBD patients that would benefit from potential therapies targeted at the microbiome. As a reminder, we entered our first collaboration with Boehringer Ingelheim back in September 2020, which focused on identifying biomarkers associated with patient phenotypes in IBD.
Collaborative research is an integral part of the BiomX culture and industry-based partnerships, such as those with BI will likely generate important new insights to help direct our future research efforts in IBD. But we also seek to build strong relationship with academic and independent research institutes. And earlier this month, we’re proud to announce the publication of a research paper in the renowned Scientific Journal, Cell entitled targeted suppression of human IBD-associated gut microbiota commensals by phage consortia for treatment of intestinal inflammation.
The research was conducted across several organizations, including scientists on BiomX, the Weizmann Institute of Science and Keio University School of Medicine. The paper presented positive results from a proof-of-concept assessment in a preclinical model of IBD.
More specifically, researchers demonstrated proof-of-concept assessment of cocktail pneumonia targeting phage by generating an orally administered, lytic 5-phage combination products specifically designed to target sensitive and resistant IBD-associated Kp clade members through distinct mechanisms. The lytic 5-phage treatment enabled effective Kp suppression in the colitis-prone mice and drove attenuated inflammation and disease severity. Collaborative research with our academic partners can provide enviable insight an external scientific validation for our company’s program.
In April, we announced the publication of the paper in the Journal of Bioinformatics. The research was conducted by scientists and BiomX and specifically relates to the development of an algorithm name Exodus that has enabled us to consistently generate hyper-accurate next-generation sequencing data for a single mix analyses, thereby providing a more detailed genetic understanding of a phage product candidate. Importantly, Exodus is now being leveraged across our entire R&D platform and because of the open source nature of the algorithm, other researchers external to BiomX can also use this algorithm to conduct an analyses on various genome-related projects.
Turning to corporate news. We announced a restructuring during the second quarter, which allowed us to further extend our cash runway through until at least mid-2024. Obviously, such decisions are never easy, but given the prevailing conditions within the capital markets, we must ensure that our company is well prepared with more than sufficient resources to navigate through this challenging period.
I’d now like to turn the call over to Marina Wolfson, our Chief Financial Officer to cover our financial results for the quarter.
Marina Wolfson
Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q, which will be filed later today. I will walk you through some of our brief highlights. As of June 30, 2022, cash balance and short-term deposits were $46.7 million, compared to $63.1 million as of December 31, 2021. The decrease was primarily due to net cash used in operating activities.
Research and development expenses net were $4.6 million for the three months ended June 30, 2022, and compared to $3.8 million for the same period in 2021. R&D expenses net were $9.5 million for the six months ended June 30, 2022, as well as for the six months ended June 30, 2021. A decrease in receipt of Israel Innovation Authority grants resulted in higher R&D expenses net, offset by a decrease in salaries and related expenses and stock based compensation expenses, due to a reduction in workforce. An additional offset is due to pauses in the development of BX003, the product candidate for the treatment of IBD and PSC, and our product candidate to treat colorectal cancer, as well as the discontinuation of the product candidate for the treatment of acne BX001.
General and administrative expenses were $2.4 million for the three months ended June 30, 2022, compared to $3.1 million for the same period in 2021. General and administrative expenses were $4.8 million for the six months ended June 30, 2022, compared to $5.6 million for the same period in 2021. The decrease was primarily due to a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce. In addition, the decrease is due to additional expenses incurred in 2021 that resulted from moving into new premises.
Net cash used in operating activities was $16.4 million for the six months ended June 30, 2022, compared to $12.8 million for the same period in 2021. We estimate that existing cash, cash equivalents and short-term deposits will be sufficient to fund the company’s current operating plan at least through mid-2024.
And now, I’ll turn the call back over to Jonathan for his closing remarks. Jonathan?
Jonathan Solomon
Thank you, Marina. With a continual threat of emerging multidrug resistant pathogens, we are encouraged to see more evidence that phage could be an important therapy for treating lung infections in cystic fibrosis. Patients clearly have few treatment options, and new therapies are desperately needed. We believe that our BX004 program addresses this unmet medical need within CF, and we’re advancing this program with our existing financial resources to ensure we reach the critical milestones to help drive shareholder value. While the last few months have been challenging for the biotech sector, we know that generating solid clinical data is the key to rebuilding investor enthusiasm, and we look forward to sharing our initial clinical results for BX004 in the near future. Operator?
Question-and-Answer Session
Operator
[Operator Instructions] Our first question is from Joe Pantginis with H.C. Wainwright. Please proceed.
Joe Pantginis
Hey, good morning, everyone. Thanks for taking the question. Jonathan, I have a logistical question and then a little bit of getting into the weeds question. So first, I guess, how is your current supply and manufacturing efficiencies? And how are your, say, more near-term plans for any expansion?
Jonathan Solomon
So, Joe, good morning, it was a pleasure. Logistics is critical and I think we – almost two years ago, took a decision that we have in-house manufacturing, because we want to control the supply chain from beginning to end, then phage being a unique modality, I think that proved out to be a good decision.
So everything is planned for, and we have capacity that can support all of our Phase 2 needs in the programs we anticipate. Obviously, the head count reduction did have an effect on the head count in the CMC organization. We still have what we need to support the CF program and we do have the budget and resources to support the atopic. But we can’t do it simultaneously, and that’s why in the atopic, we’re still kind of thinking about what kind of guidance we’ll give on the timelines of that study.
Joe Pantginis
That’s very helpful. Thanks. And then I guess sort of my weeds question is, when you look at CF and additional indications for phage, every micro environment is very different, CF is obviously very tough, the lung, biofilms and beyond. And obviously, the Yale data continued the shift of overall stage in the right direction. So I guess, especially from a clinical data standpoint. So I guess are there any important potential differentiators or similarities to the Yale data with regard to formulation and delivery of your cocktail.
Jonathan Solomon
So the data that we have on the Yale study is obviously very limited. I will say that the basic approach that we’re using is always a cocktail versus, I think, many of these cases, which are a single page. So what we’re trying to do is have a cocktail, which is broad and hence, we have a few acute phase kind of hitting the bacteria simultaneously. So I think that could be a potential advantage and we also make sure that we have anti-biosome [ph] capabilities as well.
Because we do know that biosome play an important role in the indication, there are biosome present in the lungs — and specifically, we make sure that our phage cocktail has an element that have anti-biosomes. So I think it actually provided good advantages. But I share sort of your announcement, and I think the excitement with the indication because I think one of the key challenges that we know with phage being a large molecule getting to the site of action, right?
We’ve seen that in acne. And in CF, I think data that came out of Yale and others, is actually supporting the fact that phage, a nebulized phage specifically can get to the side of action, and we validated at least in preclinical models, so we have it as well in terms of producing nebulized phage, making sure we understand the droplet size, whether phage arrival in the droplet sort of did all that optimization. So I think that should be extremely encouraging.
Joe Pantginis
That’s very helpful, Jonathan. Thanks, and good luck
Jonathan Solomon
Pleasure. Thank you.
Operator
Our next question is from Kristen Kluska with Cantor Fitzgerald. Please proceed.
Kristen Kluska
Hi. Good morning and good afternoon, everybody. Thanks for taking my questions. The first is, I know we spoke in the past about patterns of infections now that there are a few commercial years experience with Trikafta being on the market. But could you give us a sense of any predictability factors that have been observed for when the infections might occur and you talked a little bit about the fact that some of them just keep coming back no matter what the intervention. And then also factors around different levels of severity.
Jonathan Solomon
Good. So good morning, Kristen. And I think it’s a really important question. There isn’t that much data because the use of Trikafta is sort of rather new. There is a few papers and build data that shows that in the first few years, there is a drop of levels of pseudomonas and then it kind of picks up again.
I think we’re constantly talking to the KOLs and physicians. And I think from the reach out that we’re seeing from patients and what we’re hearing from physicians, there probably isn’t a dramatic change on the landscape that we’ve seen to date, could have delayed by a few years, but we do see levels which are relatively high and do see patients kind of reaching out to get a treatment. But I will just put it with the disclaimers early, probably is delaying the infections, but they do come back from what we’re seeing today.
Kristen Kluska
Thanks. And maybe a big picture question, would love to assume of your early thoughts around the FDA panel in September that’s going to take place for another microbiome company I recognize it’s not apples-to-apples here and you have a different modality with speed, but — how do you think listening in and understanding some of these dialogues and feedback for late-stage programs could help you progress your pipeline and understanding some of the criteria that the agency is focused on.
Jonathan Solomon
So I think there’s a lot of emphasis on CMC. And I think that’s been a dialogue. They also have like separate workshops on phase, which kind of elaborate. So I think there’s openness in terms of how do you get a drug approved in terms of the CMC aspects, which look good.
And I think there’s a good handle and there was a lot of analogy between microbiome as well as other fermented products, right? So I think the field is sort of kind of getting more comfortable when you’re seeing the large CDMOs kind of playing a part as well.
So I think that aspect of the whole CMC is maturing. What I’m hoping in the case of phase, there is a discussion on it in general of the microbiome, right? Can you have any surrogate endpoints that you’re going after a specific pathogen-c right, or some other infection and a reduction of the pathogen-b sort of surrogate for approval?
And I think with phases even at least as or even more relevant. There’s some evidence that there’s talk about, but I still don’t think we’re there yet. So we’re crossing our fingers because I think as one product will be approved in surrogate endpoint will make everyone’s kind of pass-through approval much faster. So let’s hope it goes there, but again, too early to tell.
Kristen Kluska
Got it. Thanks. And last question, I know you’re guiding to potentially have data 3Q and I know the any CFP conference is taking place in November. So do you expect that stage, whether it’s from you, from Yale or others could be a potential topic at this conference?
Jonathan Solomon
I hope so. It’s definitely very exciting. I think sort of the data coming out of BAL, the data that came to UCSD, spectacular publication, right, with 20 patients out of the 14 with CF with mycobacterium. And it kind of created quite a lot of time in Fairfield.
So I think we’re seeing the whole field maturing. We hope it will play a big role. And just by the fact that we’re seeing more interest from the KOLs and from patients’ right as well as some movies, have been out there in books, kind of hoping that the field is experiencing around on.
Kristen Kluska
Great. Thank you, Jonathan.
Jonathan Solomon
Pleasure.
Operator
Our next question is from Michael Higgins with Ladenburg Thalmann. Please proceed.
Michael Higgins
Thanks, operator. Good afternoon guys. Thanks for taking my questions. Looking forward to seeing BX004 results in CF next one, but I have a question on — a couple of questions on BX005 if I could. As you noted in the press release,…
Jonathan Solomon
Sure.
Michael Higgins
…company plans to support a range of activities to continue to move the program forward, more detailed update later this year. Hoping you can share with us on the enrollment of the patients if you consider information by strains in enrolling patients? And any minimum EASI scores that you can share with us? Thanks.
Jonathan Solomon
Pleasure, Michael. So with the topic, we haven’t started the study yet the IND is approved. And it goes to Joe’s question earlier, currently, because of the restructuring, we don’t want to burden the system with the two projects simultaneously and CF is our priority.
So I think we’re still kind of gearing up for what we’re — when we’re going to do the AV study talking with our partners at Maruho. What we’ve seen actually with the cocktail is a very broad host range.
So it’s less about the strength of staff in these patients, but we want to make sure, and I think that’s going to take away something you want to sort of embed in our current and future clinical programs is that we want to make sure that there is high enough to [indiscernible]. So our thinking is that we sample patients before, we want to make sure that they do have high levels of bacteria, we do make sure that the — their strains are susceptible to our phage cocktails and that kind of gives us the green light to move forward.
In terms of design, what we’re thinking of, but again, to be finalized is actually more to the moderate patient to even severe, and that’s because the data that we’ve seen from the UCSD group that went with an approach of reduce that’s where they saw both a dramatic reduction in the target bacteria as well as the clinical improvements. I think these are the patient population that’s probably more interesting. But again, once we get ready, we’ll probably provide more updates.
Michael Higgins
Appreciate that. And then in terms of 003, the cell paper is really interesting. Page 16, as mentioned other phage’s possibly being added XKT [ph]. Any plans to broaden 003?
Jonathan Solomon
So it’s a project we really like. I think as we prioritized 003 is currently not in the horizon of the next 12-plus months. We do have, I mean, we’ve worked on a broader cocktail to begin with, to your point, right, so a broader cocktail that would be ready, and that’s driven also by the fact that there’s an overlap between basically IBD and BX002 as well as the PSC, right, which is BX003. So that’s already a broader cocktail that we’re thinking of. And ideally, what we want to enter is the cost to have a speed relevant both indications were strains are derived from both types of patients.
Michael Higgins
Thanks. And just one follow-up to that. I was reading some interesting comments from Boehringer SVP, speaking of the microbiome in psoriasis, and using the microbiome as a bit of a screener for the psoriasis for our patients who are enrolling with another program. Is that really the plan here, right, with your patients to enroll in future years to use this more so, use your tech more so as a screener as well as treatment.
Jonathan Solomon
So it’s an excellent point. I think you can use it in several situations, right? Our collaboration with Boehringer Ingelheim is actually about identifying biomarker in using it potentially with one of their therapeutic modalities. So here, you have a classic case of the biomarker exactly as you’ve described, right, is a way of identifying those patients that would potentially enrolled that would have a better response and identify patients that don’t pool. So I think that’s one path that we can use the microbiome and there’s a lot of evidence on it, multiple indications, right, about the role of the microbiome effect on clinical outcome.
And to your point, you could use the same approach to identify new targets as well as validate some of our existing targets, right, like KOL would be one that comes to mind, but there are others, right? And there’s more and more research that comes out that will probably stratify different patient groups within indication we want for two, hopefully, with a different average.
Michael Higgins
Appreciate that. Thanks, Jonathan
A – Jonathan Solomon
Thank you, Michael.
Operator
[Operator Instructions] Our next question is from Keay Nakae with Chardan. Please go ahead. And Mr. Nakae, your line is live. Please check and see if you have your phone muted.
Keay Nakae
Can you hear me?
Marina Wolfson
Yes, we can
Keay Nakae
Thank you. Jonathan, for BX004,how many sites do you currently have up and running?
A – Jonathan Solomon
So, good morning, Keay, we don’t disclose publicly the number of sites. I mean it’s not a very large study. As you know, we’re going for 8 patients. But we do have a few sites up and running. And sort of we were hoping to use these sites and other sort of rolling into the part two kind of make the transition seamless as we can. There’s definitely multiple — multisite study that we’re pursuing, right, sort of thinking already about the Part 2.
Keay Nakae
Right. So I guess as we got to part 2 with more patients, I was trying to understand, how many sites you would have up and running to enroll
A – Jonathan Solomon
Yes quite a few. We’re very honored to have the support of the CF Foundation and their very good development network. So we’re trying to go as broad as we can, right? The clock is ticking, want to move as quickly as we can. So we’re sort of balancing operationally what we can do and making sure the studies are well controlled and on managed, but it is a broad study. It is an orphan indication. But again, it’s a very unique patient population that is very connected and communicated. And again, the CF Foundation plays a pivotal role in sort of making sure everything is tied together. So that’s extremely helpful in a multiple site set up
Keay Nakae
Okay. That’s all I have. Thanks.
A – Jonathan Solomon
Thank you, Keay.
Operator
We have reached the end of our question-and-answer session. I would like to turn the call back over to Jonathan for closing comments.
Jonathan Solomon
Thank you. I just want to thank all of you for joining us this morning. We look forward to providing you with future updates on our clinical programs through the rest of the year. Have a wonderful day, and please reach out to us, if you have any additional questions. Thanks again.
Operator
Thank you. This does conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.
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