Quoin Pharmaceuticals Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 9, 2023

There are 6 speakers on the call.

Operator

Good day, and welcome to the Coin Pharmaceuticals Third Quarter Financial Results and Business Update Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Gordon Dunn, Chief Financial Officer.

Operator

Please go ahead.

Speaker 1

Thank you and good morning. We appreciate you joining us on today's conference call. With me on the call are Doctor. Michael Myers, CEO and Denise Carter, COO. We're pleased to provide an update on our progress for the as well as discussing our financial results.

Speaker 1

Please note that our operations and financial results press release is now available on Coin's website. In keeping with our normal procedure, Michael will first provide an operations update following which I will review our financial results.

Speaker 2

I will then hand

Speaker 1

the call back to Michael for closing comments before we open the phone lines for questions. I like to remind everyone that statements made during this conference call will include forward looking statements within a meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially from the information expressed or implied by these forward looking statements. For more information regarding such risks and uncertainties, please see the risk factors outlined in the company's filings with the SEC. Any forward looking statements are made only as of today, and we disclaim any obligation to update these forward looking statements other than as required by law. Please see the forward looking statements section and our financial results release issued this morning for more information.

Speaker 1

It is now my pleasure to turn the call over to our CEO, Michael Myers.

Speaker 2

Thank you, Gordon, and good morning, everyone. During this past quarter, we continue to make significant progress across multiple fronts culminating in the release of additional positive clinical data for QRX-three from our ongoing open label clinical trial in Nathanson syndrome after the quarter ended on October '24. I will spend some time discussing this data as well as our newly updated and optimized clinical plans for QRX-three, which we are now pursuing as a result of this positive development. We believe that these planned protocol amendments will result in an even more robust clinical data set and potentially lead to a faster and possibly wider initial regulatory approval for the product. During the quarter, we entered into our ninth commercial partnership for QRX003 with the signing of an agreement with Farmore Mondo for Singapore.

Speaker 2

This new agreement increases the number of countries that we have entered into commercial partnerships for the product to 61. Furthermore, we are currently in late stage discussions to enter into similar partnerships for additional countries in Southeast Asia and Latin America. This diligent and systematic approach to entering into commercial partnerships is entirely in keeping with our spoken mission to ensure that QRX-three will be made available to as many patients in as many countries as possible once approved. As noted previously, these partnerships along with our own planned commercial infrastructure for The U. S.

Speaker 2

And Europe will facilitate what will effectively amount to a global launch of the product once approved and also lay the foundations for similar global launches of our pipeline products once they also receive regulatory approval. We firmly believe that this global commercial network is unprecedented for a company our size and represents highly differentiated and perhaps somewhat underappreciated advantage for COIN. The potential incremental revenue generating opportunity that this global commercial partnership network represents for our company, all of which will effectively fall to the bottom line, could ultimately be highly significant for the company and have a materially positive impact on our future profitability. During our last call, I also updated everyone on our M and A strategy. As discussed, given our strong balance sheet and potential access to additional capital, we have been acutely focused on expanding our product portfolio via acquisition, licensing or other means.

Speaker 2

Following an extensive and broad based process throughout this year where we assessed well over 20 different opportunities, during the past quarter, we successfully narrowed that list down to 3 specific products for which we ultimately reached agreement on all key financial terms. As we have stated previously, while there can be no guarantees that the transaction will be consummated as there are external impacting factors, in particular, current market conditions, which to say the least are decidedly unfavorable, we are actively working towards closing out at least 1 transaction as expeditiously as possible. While I'm not in a position to provide any specific details, I can tell you that all 3 assets are rare disease products that would strongly complement and enhance our current product portfolio. We hope to provide additional information on these opportunities in due course. I do want to make 1 key point clear, however.

Speaker 2

We do not intend to close out any such transaction unless and until we have clear visibility on our ability to raise the necessary funds to fully support the clinical development of these assets. The last thing that we will do as a company is to acquire our licensed assets for which we cannot fund the clinical development of. As we have now stated on previous calls, another company has filed an IND with the FDA and received a study may proceed to initiate the clinical development of their product as a potential treatment for Nesseten syndrome. As of this morning, following a review of the clinicaltrials.gov website, it appears that this study still has not been initiated and COIN remains the only company to be actively conducting clinical studies in Nathalton Syndrome under an open investigational new drug application or IND. Furthermore, while other companies have also spoken for some time either about filing INDs or initiating Nascenton syndrome clinical studies under open INDs, we continue to see a consistent pattern of those timelines pushed further and further out are indeed been abandoned completely.

Speaker 2

As we continue to make significant progress on the clinical front ourselves, we and our now 9 global marketing partners are more excited than ever by the potential commercial opportunity that of what could be the first regulatory approved product for this horrendous disease. As we have consistently stated COIN, unlike many of our biotech peers, focuses not only on the clinical aspects of product development, but also on the CMC side of development as well. I'm pleased to announce today that our contract manufacturer or CMO for the active ingredient in QRX003 has successfully developed and scaled up a new and fully GMP manufacturing process for the drug substance. You may recall that the active ingredient in QRX-three, although a very well characterized molecule, has never been approved as a drug for any indication and that there has been no source of GMP quality material previously available. As a result of this successful collaboration with our CMO, that is no longer the case and the availability of fully GMP material from a scaled up manufacturing process for the active ingredient represents yet another positive step forward in the development of our product.

Speaker 2

Bear in mind that this source of GMP material is exclusively contractually available to coin only. We are also actively exploring whether new intellectual property may be developed from this exciting development. Turning now to our ongoing clinical studies in Nathaleton syndrome patients. On Oct. 24, we announced the release of positive clinical data from our single arm open label study.

Speaker 2

This data was from the first six evaluable subjects in the study. As outlined in our press release, on that date, the data was positive across several measured endpoints. Recall that in this open label study, subjects are currently receiving off label systemic treatment and will continue to do so in conjunction with QRX-three for the duration of the study. It is worth noting that all subjects in this study have been treated with this off label systemic therapy for at least one year and in a number of cases for multiple years. Notwithstanding this ongoing and long term systemic therapy treatment, all patients recruited into the study exhibited clear signs of estrogen syndrome at the point of entry into the study, including compromised skin and significant pruritus or itch.

Speaker 2

As a result of this long term systemic therapy, subjects would lead to any therapeutic improvement across a number of clinical endpoints. As reported, for 5 of the 6 subjects, their proriasis, Rh, was either absent or negligible according to the standardized scoring system after treatment with Curex003. Absent or negligible pruritus is defined as a 0 or very low possibly reflecting possibly reflecting a not uncommon refractory nature of the pruritus associated with this disease in their particular case. We are extremely pleased with these results as pruritus can extremely distressing and debilitating for nepotent patients. What is particularly noteworthy is that despite receiving long term off label systemic therapy, all 6 subjects were experiencing significant pruritus at baseline and for 5 of those 6, that pruritus had largely disappeared following treatment with CureX003.

Speaker 2

In addition, all 6 subjects evaluated demonstrated an improvement in skin appearance according to the investigator scoring system. For 3 of the 6 patients, there was a well defined improvement in skin appearance according to this endpoint on completion of dosing with CureX003, while for the other 3 subjects, there were signs of improvement in skin appearance at various points throughout the study, though not necessarily on completion of testing. This is potentially further important evidence of the possible efficacy of Curex-three as a treatment for NS. Importantly also, all 6 subjects expressed satisfaction with Curex003 across a number of assessed metrics leading to a positive overall experience with the product. As you know, Curex003 is an easily applied and user friendly topical lotion, which makes it attractive to use for patients and caregivers.

Speaker 2

Finally, and also importantly, there were no significant adverse events reported throughout the study and the overall safety profile of QRX-three to date is extremely favorable and highly suggestive of a potentially safe treatment for this disease. Taken together, the body of clinical evidence generated today from both an efficacy and a safety perspective has led to a number of exciting developments for our 2 ongoing clinical studies, enabling us to move into an optimization phase, which we believe may ultimately result in an even more robust and diverse dataset and potentially to a faster approval for the product. These new developments have been submitted to our open IND for QRX003, and I will now provide some details of these planned protocol amendments. 1 such amendment is the elimination of the lower two percent dose from our double blinded study. This decision was based on the very clean safety profile observed to date for the higher four percent dose across both studies.

Speaker 2

Going forward, the double blindness study will now comprise of the higher four percent dose and a placebo and as such will become a 2 arm study instead of the current 3 arm study that it is. In addition, with a view to maximizing the potential clinical performance of Curex-three, we are modifying the dosing frequency of the product from once daily to twice daily across both studies. Again, based on the body of clinical evidence generated to date, in conjunction with the very clean safety profile observed so far, we believe that twice daily dosing of the product has the potential to deliver a more robust clinical evidence of efficacy across all measured endpoints. Finally, the number of subjects in the open label study will be increased from the current 10 to 20 with all new subjects being tested with QRX-three dosed twice daily going forward. For the BLINDUS study, the number of subjects to be enrolled will be increased from the original 18 to 30 and going forward, this will be a 2 leg study with Curex-three and a four percent dose tested against a placebo with both test materials now being applied twice daily.

Speaker 2

This now means that both studies will each have a cohort of subjects dosed once daily and a second cohort dosed twice daily, enabling us to evaluate if increasing the frequency of dosing does indeed lead to an incremental therapeutic benefit for subjects in the studies. We are very excited about these new developments in our clinical programs and as discussed, we believe these protocol amendments may ultimately result in a faster approval for CureX003 in NASH Syndrome and with a more compelling dataset. With that update on our operational progress, I will now ask Gordon to discuss our financial results.

Speaker 1

Gordon? Thank you, Michael. As of September '30, our cash and marketable securities was approximately $14,000,000 compared to $1,540,000,0.0 as of June '30, which we expect will be sufficient to fund our operations through the Our operating loss for the was $210,000,0.0 compared to $230,000,0.0 for the The decrease was primarily due to lower professional fees and other general and administrative costs in the quarter. I'll now turn back the call back to Michael to make some closing remarks and begin our Q and A.

Speaker 2

Thank you, Gordon. We are entering a very exciting period for COIN. Based on the positive clinical data reported recently, we are making a number of protocol adjustments to our ongoing clinical studies, which we believe may lead to a more rapid approval with a broader and more robust dataset. In addition, following a thorough process throughout the year, we have identified and agreed financial terms for the acquisition or licensing of a number of exciting new assets in the rare and orphan disease space that we believe could be highly complementary to our current development portfolio. While we are diligently working on finalizing at least 1 transaction as soon as possible, there can be no assurances that this will actually occur as we will only close out any deal if we can raise the clinical development for that asset.

Speaker 2

We intend to use our current funds primarily to advance the development of Curex-three and our other pipeline products only and the development of any additional products will need to

Speaker 3

be

Speaker 2

funded by new capital. We believe that in these highly challenging market conditions, such prudent use of our cash resources must remain a key priority for the company as we head into 2024. With that operator, we are now ready for questions.

Operator

Thank you. We will now begin the question and answer session. Our first question comes from James Malloy with Alliance Global Partners. Please go ahead.

Speaker 4

Hey guys, good morning. Thank you for taking my questions. I had a question on the changes to the Phase twothree trial from 10 to 20 and from 2 to 1 in the doses. I think expectations are for data. Does this change the expectation for being able to file potentially should the data bear up based on this trial in say

Speaker 2

Hi, James. So thanks for the question and thanks for participating. We don't believe there's going to be any material change to the timelines. It does affect the pace at which data will be released. But overall, we believe we remain on track and possibly able to speed up the approval of the product.

Speaker 2

So these developments are positive overall.

Speaker 4

Okay. Thank you. And then on the timing of another bringing in this 1 transaction that you see very close on. Can you walk through again, presuming you mentioned you'd only bring it in if you could raise the funds to do so. Can you walk through in an ideal world when you would like to bring that in and how much you think it would take you need to raise to run to get that through clinical trials?

Speaker 5

Yes. So I'm not going to get into any details, James, about how much

Speaker 2

it would take to complete the clinical development of the product on this call. In an ideal world, I would like to get this closed prior to the end of the year. We are as you well know, we're not living in an ideal world at the moment. So I can't really give a timeline. I can just say, look, we have agreed financial terms that we believe are favorable to coin.

Speaker 2

So we're excited about that. We think this asset has potential to be a very significant commercial product once approved. But there are other factors at play here that are somewhat outside of our control. So we will remain diligent, but we will remain focused on ensuring that we don't put ourselves in a position where we bring in a new asset and it has to sit on our shelf because we can't fund the development of. So I would ask you to be patient and hang in there as we work through the process.

Speaker 4

Absolutely. And maybe last question too. Any updates, I know you're obviously focusing correctly so on Methison three. Any updates on four, seven, 8 for the other various early stage programs? Are those sort of on hold for the NUTS?

Speaker 2

So 4, which you know is our program for EB,

Speaker 5

remains on hold as we continue to evaluate

Speaker 2

the commercial opportunity for our product. There has been developments in this space in the past year. There has been approval here in The U. S. There was a product that was approved in Europe or rejected in The U.

Speaker 2

S. And there's some other pivotal data that should come out in the next several months as well. So we remain vigilant. We remain watchful, but not putting any resources into that at this point. 02/7 and 02/8 continue to make progress with our partnership with Queen's University of Technology in Australia.

Speaker 2

As we have said for quite some time now, these are early stage programs and on a different trajectory than 3, but we believe ultimately they could be important contributors as well. So moving forward, but as I said at a different pace than 3.

Speaker 4

Great. Thank you for taking the questions.

Speaker 2

Thanks, Jim.

Operator

The next question comes from M. Martin with Zacks. Please go ahead.

Speaker 5

Thank you. So the clinical data, you've done a very strong job in securing distribution. As you said, you have 9 agreements in place. The clinical data that you've reported, do you expect that this will accelerate conversations with other potential distribution partners?

Speaker 2

Great question. So thank you for asking, Aaron. Potentially, yes. Look, we receive

Speaker 5

a lot of inbound interest

Speaker 2

regarding this product. We've consistently said, look, we will commercialize ourselves in The U. S. And Europe, but still there's a lot of interest from companies who have an established infrastructure and like where the product is going. So I think you're right, it will increase interest.

Speaker 2

We're hoping that interest will be in countries where we haven't partnered, though to be honest, there aren't that many of them left at this point. So, I think the short answer is yes.

Speaker 5

Okay. Thank you.

Operator

Our next question comes from Dennis Panolo with Laden Partners. Please go ahead.

Speaker 3

Hi, good morning gentlemen. Thank you for taking my question. My first question, I'm sure you guys have done some back of the envelope math and figured out some price points. Could you tell us a little bit about your total addressable market, the TAM for the NS product?

Speaker 2

Yes. Hi, Dennis. Thanks for

Speaker 5

the call. Nice to meet you again.

Speaker 2

So we believe combined in U. S. And Europe, there's probably somewhere between 7000 to 8000 patients. And in the countries that we've partnerships, there's probably an additional ten thousand to 15000. The numbers are difficult to come by, as I'm sure you know, because this is a very rare disease and diagnosis can be challenging, but these are numbers that we feel pretty confident with.

Speaker 2

In terms of price point, we haven't drilled down to a point where I'm comfortable saying giving you an exact number. But the opportunity here, we believe is substantially in excess of $500,000,000 in total and could be significantly higher.

Speaker 3

That's a pretty strong number. And my last question is, you were talking about acquiring some more assets for another company. Right now with your company traded for $0.3 on the dollar for your cash, how are some companies not knocking your door down trying to get you guys to buy you guys up? I mean rare disease drugs aren't easy to come by, especially just so far down the pipeline compared to your competitors.

Speaker 5

Another great question and 1 I can't really provide any details on, but I think you've hit

Speaker 2

the nail on the head. People are looking at this company, see what we're doing. But look, we are just focused on what's in front of us. We believe we have a great asset. We're looking to add to that asset with additional products.

Speaker 2

And we will continue to deliver whatever conversations come our way. We have a Board of Directors to address that.

Speaker 3

Okay, yes, which makes sense. I mean, so if office are coming in, you guys are looking at them?

Speaker 5

Not going to comment, but

Speaker 2

I think you can see where we're going.

Speaker 3

Yes. No, I appreciate it. And you guys are just so undervalued. It's ridiculous. I mean, you get in the pipeline for free and like I said, getting all your cash for $0.3 on the dollar makes very little sense.

Speaker 3

Anyway, thank you and have a great day and look forward to some updates.

Speaker 2

Thanks Dennis. Take care.

Operator

With no questions, this concludes our question and answer session. I would like to turn the conference back over to Michael Myers for any closing remarks.

Speaker 2

Yes. So just to say thanks to everybody for participating here today. And as always, we are readily available by phone, e mail. If there are any follow-up questions or concerns, we'd be happy to address them. Other than that, have a great day and thanks again.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may all now disconnect.

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Earnings Conference Call
Quoin Pharmaceuticals Q3 2023
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