Vyant Bio Q3 2021 Earnings Call Transcript

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November 10, 2021

There are 5 speakers on the call.

Operator

Good afternoon, and welcome to the Viant Bio Third Quarter 2021 Conference Call and Webcast. Today, November 11, 2021, the company issued a press release summarizing results for the Q3 2021 and will be filing its Form 10 Q tomorrow morning before the market opens at 9:30 am Eastern Time. Today's discussion will provide an overview of activities in the quarter and is being recorded and a replay of the webcast will be available on the Viant BIO website following the call. Alternatively, the link can be sent to you by contacting atviantbio.com. All participants on this call will be in a listen only mode during the presentation.

Operator

The presentation will be followed by a question and answer session. At this time, I would now like to turn the conference over to Jay Roberts, Chief Executive Officer of Viant Bio. Please go ahead, sir.

Speaker 1

Thank you, operator. Thank you all for joining the Viant Bio Investor conference call and webcast for the Q3 2021. We're pleased to have completed our 2nd full quarter as Bienn Bio. Now that the merger and related integration activities are completed, we have directed our full focus on executing our business plan. It is also a great pleasure to speak with you today to share our enthusiasm and to give you some insight into how we envision the near term future of Bio Amp Bio.

Speaker 1

Additionally, we're going to present the financial results for the Q3 ending September 30, 2021. On the call with me today is Via Bio's Chief Financial Officer, Andy LaFrantz and our Chief Scientific Officer, Bob Fremont. Following the Safe Harbor statement, I will provide a strategic overview and update on recent corporate developments and the vision ahead. Then Andy will take us through a brief financial update and discuss key accounting matters for the Q3. I will make some closing remarks and then we will open up the lines for questions for Andy, Bob and me.

Speaker 1

I will now turn the call over to our CFO, Andy Lefrens.

Speaker 2

Thank you, Jay, and welcome to all. We would like to remind you that various comments about future expectations, plans and prospects constitute forward looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Vite Bio cautions that these forward looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, including risks described in the company's filings with the SEC. Any forward looking statements made on this conference call speak only as of today's date, Thursday, November 11, 2021, and Bio does not intend to update any of these forward looking statements to reflect events or circumstances that would occur after today's date. This conference call is also being recorded for audio rebroadcast on Vine Bios website at www.vinebio.com.

Speaker 2

With that, I would like to turn the call back over to Jay Roberts. Jay?

Speaker 1

Thanks, Andy. As I begin the call, I think it's important to remind everyone that the Q3 was the 2nd full quarter our company has operated as Viant Bio. Today, We will highlight the progress and accomplishments we have made in the 7.5 months operating as one business since the closing of our merger. We have repositioned Bio as an emerging global drug discovery company focused on identifying small and large molecule therapeutics to treat central nervous system and oncology related diseases. We believe there are significant value creation drivers in the drug discovery sector and we intend to use our discovery engine to drive cost savings, speed and insightful decision making to identify unique biological targets and novel therapeutics to treat patients with acute neurological and oncological indications.

Speaker 1

We have made promising progress, which we will highlight for you today. To begin, I would like to recap a few non financial highlights from the Q3. First, we hired Robert T. Fermeau Jr. As our CSO to lead our drug discovery efforts, including lead target and candidate identification all the way to IND submissions.

Speaker 1

Doctor. Fermeau joined us a few weeks ago is already having a meaningful impact on our efforts in discovering novel therapeutics. He brings over 2 decades of drug discovery experience in academia and industry with a proven track record of excellence in next generation drug development focusing on severe neurological disorders and neuroscience disease indications. His scientific expertise is recognized internationally. Doctor.

Speaker 1

Fermeau's extensive experience with scientific research and drug discovery will be invaluable to us as we complete feasibility programs with leading biopharma companies and further develop our preclinical and translational strategy for driving a portfolio of therapeutic candidates from early discovery to human proof of concept. While we have yet to announce the completion of a biopharma co development or licensing agreement, We are continuing to make progress in this regard, evidenced by 2 feasibility programs we are running with potential long term partners. We believe these programs will show additional validation of our platform in conjunction with other proof points that are being worked on and will result in these potential partnerships taking shape early next year. To further support our biopharma partnering efforts, A few weeks ago, we announced the collaboration partnership we entered into with Masori Therapeutics. Masori is a U.

Speaker 1

S. And Tokyo based technology and marketing focused company with a successful track record in the pharmaceutical industry. We entered into this engagement with Misori to jointly pursue co development and out licensing partnerships with pharmaceutical and biotechnology companies with our initial activities focused in Japan that leverage Viant Bio's advanced analytics and complex human derived biology to drive drug discovery. The Missouri Therapeutics team has decades of experience in all areas of drug discovery and development, including building biopharmaceutical commercial infrastructures and partnerships from concept to consummation. In terms of our disease model development and compound discovery efforts, We continue making progress on our internal lead compounds and have deeper investigation of their efficacy and toxicity.

Speaker 1

In addition, we are deep into the investigation of the biological basis of potential lead compounds specific mechanisms of action. Additionally, we completed a second large screening of AI generated novel compounds for the Rett disease program in conjunction with our collaboration partner, Atomwise, yielding promising results. These results include further hit expansion across 2 unique biological targets and several novel compounds. Our RET program continues to positively iterate on narrowing our lead indication identification. To further validate our Rett syndrome disease model, we recently ran additional screenings to show concordance of our data with clinical data have begun some animal efficacy and safety modeling and are about to run a comparative screen of over 5,000 compounds to create additional validation data and we'll then be moving through the hit to lead optimization process.

Speaker 1

Also in Q3, we entered into a collaboration agreement with Cyclica combining Viant Bio's patient derived Complex organoid biology alongside cyclical's proteome wide artificial intelligence enabled discovery platform to identify new treatments for CDKL5 deficiency disorder. We have made significant progress in the CDKL5 program. Initially, We established and further optimized our internal micro brain platform to minimize variability and adapt it to specific neuronal phenotypes. On that note, we developed different state of the art assays to characterize the disease ideology further and advance our portfolio of genetic epilepsy readouts. Additionally, we have designed a library with more than 5,000 compounds focusing on well defined mechanistic relevant compounds with proven low toxicity and high clinical relevance for this disease category.

Speaker 1

Using our customized Bio library, we performed one of the most extensive functional phenotypic screenings, leading to identifying many compounds that recover the CDKL5 phenotype as well as novel potential molecular targets for CDKL5. Finally, we identified new targets for further evaluation based on Cyclica's machine learning proteome wide platform and our internal expertise. The Ordeus Bio and Solaria collaboration also remains on schedule. As we previously announced, This collaboration is intended to introduce a drug discovery process to rapidly design, redesign and optimize biological drug candidates using artificial intelligence and in vitro patient cell based avatar clinical trials. The goal of the collaboration is not only to design candidates that are likely to be successful in clinical trials, but have also been assessed for efficacy in numerous patient specific cell based models before even making it to the clinic.

Speaker 1

The in silico protein design has been updated to include state of the art Recurrent Neural Network Structure with additional incorporation of new attention mechanisms. In addition, the in silico model has been further trained on more than 20,000,000 protein sequences. These improvements have formed the basis for a second round of novel protein sequences. Protein production will begin shortly on these novel designs and binding and functional assays for further proof of functionality will follow in the coming month. I will now turn the call over to Andy LaFrantz, our Chief Financial Officer, to discuss the financial results for the Q3.

Speaker 1

Andy?

Speaker 2

Thank you, Jay. Hello, everyone, and thank you again for joining our call. Today, I will review our balance sheet position as of September 30, 2021 and our financial results for the Q3 of 2021. Estimatas was deemed to have acquired Cancer Genetics For accounting purposes and the merger closed on March 30, 2021, the company's current year financial results include the Cancer Genetics operations since the merger date and the 2020 financial results are based on Stemmonix operations. As increases in revenues, cost of goods sold and operating expenses during the 3 9 month periods ended September 30, 2021, As compared with the corresponding prior year periods largely reflects the impacts of the merger, I will focus my comments on current year post merger activities.

Speaker 2

Cash and cash equivalents totaled approximately $23,200,000 as of September 30, 2021. In October of 2021, we signed a $1,500,000 lease line of credit and completed a $496,000 sale leaseback transaction. Total revenues increased by $1,200,000 to $1,500,000 during the Q3 of 2021 as compared with the same prior year quarter. For the 9 months ended September 30, 2021, Total revenues increased by $3,100,000 to $3,700,000 as compared with the prior year period. Cost of goods sold service aggregated $1,100,000 $2,100,000 during the 3 9 month periods ended September 30, 2021, resulting in a service cost of goods sold of 79.9% and 66.1%, respectively.

Speaker 2

The increase in the cost of sales percentage For the Q3 of 2021 as compared with the 2021 9 month period was the result of deleveraging of the service revenue cost structure from a reduction of service revenues in the 2021 Q3 as compared with the Q2 of 2021. Specifically, service revenue declined from $1,800,000 in the Q2 of 2021 to $1,300,000 Q3 of 2021. The company expects source revenue growth in early 2022 when contracted Customer projects are expected to commence. Cost of goods sold product aggregated 355,000 and $1,100,000 for the 3 9 months ended September 30, 2021, resulting in the cost of goods sold margin of 196 the margin deficit of $196,000 $715,000 respectively. As previously disclosed in our manufacturing excuse me, as previously disclosed, our product manufacturing capabilities at our Maple Grove, Minnesota facility currently have excess capacity to support future growth.

Speaker 2

During the Q4 of 2021, The company commenced the technology transfer of certain research and development activities that are currently being performed at the La Jolla, California facility to the Maple Grove facility, which is expected to substantially increase this facility's utilization in 2022. Research and development expenses for the 3 9 months periods ended September 30, 2021 increased by 349,000 and $472,000 respectively to $1,200,000 $2,900,000 respectively as a result of additional payroll costs and staff in the current year periods. Selling, general and administration expenses were 3,300,000 and $8,200,000 for the 3 9 months periods ended September 30, 2021. These expenses included 482,000 and $1,400,000 of non cash expenses for depreciation, amortization and stock based compensation. I will close for now and hand the presentation back over to Jay Roberts for closing remarks.

Speaker 2

Jay?

Speaker 1

Thanks, Andy. As we come to the final part of this presentation, I would like to conclude with the following takeaways. First, I'd like to reiterate how pleased we are with the progress Our scientific teams are making on multiple fronts related to the existing programs we discussed today and their activities in the 3rd quarter focus purely on establishing Bio's foothold in the industry and helping to fuel our activities into the Q4 and beyond. Please stay tuned as we continue to make progress and begin to provide further validation and proof of concept results in the Q4 and Q1 of 2022. We also invite new listeners to become more familiar with Bio.

Speaker 1

As news and information becomes available, we'll be communicating updates via press releases, LinkedIn, the new Via Bio website and other social media outlets. Interested parties are invited to sign up for the press release distribution list. Please visit our website. With that, I invite Andy Lafrance to join me in the opening up of the line for our Q and A.

Operator

Thank you. The floor is now open for questions. And there is a question from Ed White from H. C. Wainwright.

Operator

Ed, your line is live. Please go ahead.

Speaker 3

Good evening. Thanks for taking my question.

Speaker 1

Good evening.

Speaker 3

Just a couple. Maybe just for Bob, just wanted to get your thoughts on How Viant is going to make sure preclinical data validation translates into clinical data?

Speaker 4

That's an excellent question. And we're starting with diseases now for which there are Monogenetic defects that have been well documented in terms of the pathophysiology in the clinic. And one of the key indications is going to be to be able to verify in the spheroid organoid system that we can measure the biomarkers that are known to be clinically translatable in the human situation.

Speaker 3

Okay. Thanks, Bob. And maybe I can get from Jay some just some updates on The Rett syndrome, your repurposed drug, I'm just wondering, I believe that you had been expecting that to perhaps get to lead identification by the end of this year? And then also if you can discuss the timelines, you mentioned In your former presentations, 2 INDs ready for submission per year. I believe in 2022, that would be Rett Syndrome and CDK L5.

Speaker 3

I just wanted to get your thoughts on timing?

Speaker 1

Yes, good. No, that's a great question. Yes, Ed, thank you. So just on the first part of that question, well, let me just say across both questions With Bob now having joined the team and leading our scientific and data science teams, he's got a significant amount of expertise And throughout his career, having picked up kind of small groups of late stage discovery of promising therapeutic targets and targets and carrying those all the way through IND. And so he's Kind of walked teams through that very carefully many, many times in his career and that's a big part of why we are more excited to have Bob join us and that'll be a big part of what he's going to take us through.

Speaker 1

As it relates to the repurposed question, again, with Bob only been on the ground for 2 weeks. He's now deep into that program with us and we anticipate that the timelines As we laid out originally, we'll continue as we think about it. We're certainly making good progress. It's not this quarter. We anticipate that we'll be making good progress into the first half of next year.

Speaker 1

And then to your point, the other two programs behind it, Both Rett and CDKL5 will be put on a program as we announced today, as we talked about on this call. There's significant progress that has been made on both of those programs. And so we'll continue again under Bob's leadership to drive those forward. Our ability to get to a place where we're going to be meeting 2 NDs a year, we think is a big part of our strategy. As we think about going into the upcoming several years in front of us.

Speaker 1

And so that's part of where we will continue to stay focused.

Speaker 3

Okay, great. And can you make any comment or 2 on your the status of the Parkinson's and Huntington's programs as well?

Speaker 1

Yes. I think, again, those are two places where we've And building disease models and that we have expertise in terms of creating Three-dimensional organoid platforms that allow us to take those disease categories forward. Bob is also obviously actively involved in Now getting his arms around the status and sort of the development of those programs, those remain in our crosshairs as being programs that will be things that we'll continue to progress and to work on. And as of now, the scientific teams continue Every day we're doing work in those areas and progressing our disease model capabilities.

Speaker 3

Thanks, Jay. And maybe a final question to Andy, just wanted to Get your thoughts on cash runway. You had mentioned you have cash of $23,200,000 up booked as of the end of the quarter. Thank you.

Speaker 2

Ed, thank you for the question. And we continue to have the same sort of runway we articulated last quarter, Well, we believe that cash runway will take us into well into the first half of twenty twenty three. As noted this quarter, we've earned about $1,100,000 a month and that we anticipate that, That would be a reasonable sort of cash burn. And as I also noted in my prepared remarks, we've also We have been able to leverage some equipment leasing capabilities as well, which will further augment our cash flow.

Speaker 1

Thanks, Ed.

Operator

Thank you. And it does appear there are no further questions in queue at this time. And with that, I would like to pass the floor back to Jay Roberts for closing remarks.

Speaker 1

Okay. Thank you, operator, And thank you all for joining the call today. We're very happy with our progress so far as an emerging global drug discovery company is rapidly identifying small and large molecule therapeutics to treat CNS and oncology related diseases. We look forward to keeping everyone informed of our progress along the way. And thanks again for joining the call today and have a great evening.

Operator

Thank you, ladies and gentlemen. This does conclude today's conference call and webcast. You may disconnect at this time. Thank you again for your participation and have a wonderful day.

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Vyant Bio Q3 2021
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