Pieris Pharmaceuticals Q1 2023 Earnings Call Transcript

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May 10, 2023

Key Takeaways

  • Pieris’s top priority is the Alaricovep Phase 2a study (inhaled IL-4Rα antagonist PRS-060/AZD1402) in asthma with AstraZeneca, enrolling over 100 sites and expecting primary endpoint readout (placebo-adjusted FEV1 at 4 weeks) by mid-2024, which will trigger Pieris’s opt-in co-development decision if positive.
  • Inhaled CTGF-targeting Anticalin PRS-220 for idiopathic pulmonary fibrosis is in a Phase 1 safety/tolerability/PK study, with topline data due in H2 2023, and preclinical ATS 2023 data demonstrating superior lung exposure and collagen reduction in fibrosis models.
  • The inhaled JAG1 antagonist PRS-400 for mucobstructive lung diseases is advancing toward clinical candidate nomination late 2023, supported by preclinical evidence of goblet cell metaplasia inhibition and mucus reduction, to be presented at ATS 2023.
  • In immuno-oncology, the HER2-targeted bispecific PRS-343 achieved an unconfirmed 100% objective response in 5 heavily pretreated patients, prompting Pieris to explore a spin-out or partner transaction to further develop this transformative program.
  • As of March 31 2023, Pieris held $48.4 M in cash and believes it has runway >12 months, while Q1 2023 R&D expenses were $13.4 M (net loss $13.2 M), with cost-saving measures and capital strategies focused on advancing respiratory pipeline milestones.
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Earnings Conference Call
Pieris Pharmaceuticals Q1 2023
00:00 / 00:00

There are 6 speakers on the call.

Operator

Good day, ladies and gentlemen, and welcome to the Pieris Pharmaceuticals to host First Quarter 2023 Investor Call. All lines have been placed on a listen only mode and the floor will be open for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Tom Burrows, CFO, sir, the floor is yours.

Speaker 1

Thank you. Good morning, everyone, and thank you for joining us for our Q1 2023 conference call and corporate update. On the call today, we have Steve Yoder, our President and CEO, who will provide a corporate overview and outlook on our pipeline Itzh O'Kosman, our Chief Scientific Officer and Shane Olwell, our Chief Development Officer, who will be available for Q and A. You can access the press release issued this morning on the Investor Relations page of our website at www.pieris.com. Before we begin, I'd like to caution that comments made during this conference call may contain forward looking statements involving risks and uncertainties regarding the operations and future results of operations of Pieris, including statements relating to the timing and progress of our clinical trials and preclinical programs, The anticipated timing for the reporting of data, our partnerships and our financial position and actual results or events may differ materially from those expressed or implied by such forward looking statements.

Speaker 1

Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly and current reports. The information being presented is only accurate as of today and Pieris undertakes no obligation to update any statements to reflect future events or circumstances. With that, I will now turn the call over to Steve.

Speaker 2

Well, thank you, Tom, and thank you to everyone for joining us today. I will be providing an update on the progress we are making to advance our inhaled biologics pipeline for respiratory diseases. We continue to drive towards key catalysts in the next 12 to 15 months for our clinical and preclinical programs, which we believe carry transformative potential versus current modalities. Our top priority remains the study completion and readout from the hilericaVep Phase 2a study in asthma. Hilaricovep is an oral inhaled IL-four receptor alpha antagonist also referred to as PRS-sixty or AZD 1402, which is partnered with AstraZeneca.

Speaker 2

In addition, I will provide commentary on our 2 fully in inhaled respiratory programs, PRS-two twenty and PRS-four hundred that Pieris is advancing alongside Aliricabet. Pieris' Annie Kalin platform may offer a fundamentally new approach to treating high prevalence respiratory diseases by directly targeting the relevant lung tissue. Building upon clinically validated biology, our pipeline of therapeutics target large opportunities with significant unmet need that continue to be underserved by the biopharmaceutical industry. Turning first to our top priority, AlericaVap, we continue to work closely with our partner AstraZeneca, who is enrolling the ongoing Phase 2a study for asthma as study sponsor. As we have previously communicated, AstraZeneca has committed additional Clinically focused resources to achieve study completion, including adding several new countries and a number of additional clinical sites That would bring the total to more than 100 sites across all geographies.

Speaker 2

AstraZeneca is on track with this plan to add 3 new geographies this quarter. With this broader clinical footprint and the important protocol amendments that became effective earlier this year, we are witnessing the positive impact in patient screens. We anticipate this to result in a meaningful uptick in the rate of patients randomized into this study. Top line results measuring placebo adjusted FED1 improvement at 4 weeks, the study's primary efficacy endpoint, are anticipated to be reported by the middle of 2024. This readout will focus on the 3 milligram DPI dose versus placebo.

Speaker 2

Separate from these improvements in patient enrollment for the efficacy portion of the study, we were pleased to have announced that the safety review The 10 milligram DPI dose cohort in mild control asthmatics was successfully completed. That portion of the study enrolled all comer moderate controlled asthmatics who received either 10 milligrams of alaricoveb or placebo twice daily on of background therapy, which was ICSLABA over 4 weeks. This not only provides additional data supporting the alaricobept safety profile, but also enables higher doses to be evaluated in the future if needed. The Alerica BEP commercial opportunity remains substantial when considering the current multi $1,000,000,000 asthma therapeutics market. By directly targeting lung tissue through a convenient route of administration, Alireqabeb has the potential to provide a superior product profile, offering a route of administration that many patients and healthcare providers would prefer.

Speaker 2

If we are successful, we believe that alericaVeth could address important shortcomings of currently approved drugs and transform how asthma is managed. With the Lyrica Vet being strongly supported by AstraZeneca's organizational commitment and with the increased resources As provided, we look forward to obtaining study results. This important data set alongside the delivery of a development plan and budget for AstraZeneca will trigger our opt in decision. Being in a position to opt in in co development if the data are positive is a top priority for our company. Next, I would like to discuss 2 other highly differentiated inhaled respiratory programs that we are advancing, PRS-two twenty and PRS-four hundred, both of which are fully proprietary.

Speaker 2

PRS-two twenty is an inhaled anticalin protein that targets connective tissue growth or CTGF for the treatment of idiopathic pulmonary fibrosis, IPF and other forms of fibrotic And has best in class potential. Pre clinically, PRS-two twenty has demonstrated superior on target potency compared to pamrevlumab, which is an intravenously infused CTGS antagonist in late stage clinical development. Critically, we believe that an inhaled route of administration provides for superior lung exposure and may lead to a superior clinical compared to a systemically administered approach in this pathway. Based on these potential benefits, The convenience of at home delivery via inhalation as well as the potential to combine PRS-two twenty with current standard of care for IPF, We believe PRS-two twenty could have best in class potential for this serious disease. As with alirikumab, we believe that PRS-two twenty could represent a tremendous commercial opportunity for our company.

Speaker 2

We continue to administer PRS-two twenty according to plan to subjects in a Phase 1 study evaluating the safety, tolerability and pharmacokinetics or PK in healthy volunteers. We expect to report Phase 1 study results in the second half of this year. This study along with other ongoing activities is supported by a meaningful grant from the Bavarian government. We are also excited to present new preclinical PRS-two twenty data at the ATS 2023 International Conference. In a poster session, presented data will show how PRS-two twenty significantly reduced collagen deposition in a silica induced lung fibrosis model when delivered by inhalation.

Speaker 2

This presentation will be on Sunday, May 21. Next, I want to provide an update on PRS-four hundred, an inhaled JAGRD-one antagonist being developed for the treatment of mucobstructive lung disease. Our enthusiasm for this program is based on the large market opportunity represented by mucus driven respiratory diseases and is supported by preclinical data showing that PRS-four hundred can regulate mucus production in the lung. PRS-four hundred is designed to block the JAG-one notch signaling locally via oral inhalation with the objective of reversing goblet salmetoplasia, hyperplasia and mucus plugging as well as increasing the number of ciliated cells. Unlike other interventions that aim to reduce mucus burden, PRS-four hundred's mode of action is independent of stimulus, which we believe offers applicability across a broader patient population.

Speaker 2

Previously presented preclinical data at the European Respiratory Your ERS meeting in 2022 showed that in vitro PRS-four hundred drug candidates can penetrate mucus coated epithelia to potently inhibit Jagged-one induced signaling on lung epithelial cells thereby reducing mucus expression. And on May 22, later this month, we will be presenting preclinical data at the ATS 2023 International Conference demonstrating that PRS-four hundred reduces inflammation driven goblet cell metaplasia and mucus hypersecretion in a therapeutic disease model. PRS-four hundred is advancing towards clinical development candidate nomination later this year. Turning now to our immuno oncology pipeline. We remain committed to delivering with our partners on the several programs that they support and are advancing.

Speaker 2

With the benefit of our existing collaborators, which include Servier, Seagen and Boston Pharmaceuticals, Our immuno oncology pipeline is being advanced in a cost efficient manner and we believe multiple opportunities exist to generate value from this portfolio based on promising preclinical and clinical data. 1st, In April, highly encouraging clinical results from the company's study of cinribafus alfa or PRS-three forty three in second line and beyond HER2 positive showed an unconfirmed 100 percent objective response rate and a promising emerging durability profile in the 5 patients enrolled into that study. Prior to these promising results being available, enrollment in the study had been discontinued for strategic reasons. Pieris is now considering a range of transactions from an immuno oncology focused spin out to traditional partnering transactions to facilitate the continuation of this program given the emerging transformative activity generated in gastric cancer and the exciting potential of this program in other HER2 settings. Moving beyond PRS-three forty three.

Speaker 2

In our collaboration with Servier, we continue to progress in the dose escalation portion of the Phase onetwo study of PRS-three 344 or S095012, which is a 41BB PBL1 MAP calin bispecific for the treatment of solid tumors. Next, within our Cgen collaboration, we earned a US5 $1,000,000 milestone payment when the first patient was dosed in a Phase 1 study for SGN VB-two twenty eight is a 1st in class CD22841BB bispecific Antibody Anticalin Compound Designed TO Provide A Potent Costimulatory Bridge Between Tumor Specific T Cells and CD-two twenty eight expressing tumor cells. And beyond this program, we are committed to delivering on 2 other programs with Seagen for which we received full reimbursement for internal and external spending on those programs. And lastly, within the immuno oncology Franchise. Boston Pharmaceuticals continue to advance BOS-three forty two, also known as PRS-three forty two, which is a 4 1BB GPC III bispecific MAP Calin compound towards the clinic with Phase 1 expected to begin in the coming months.

Speaker 2

We are eligible to receive a modest milestone payment upon the 1st in human dosing on this program. And we believe that clinical entry of this program, which will be the 4th clinical stage 401BB bispecific from our franchise, offers additional long term upside. This concludes my prepared remarks and I will now hand the call back to Tom.

Speaker 1

Thank you, Pete. Cash, cash equivalents and investments totaled $48,400,000 for the quarter ended March 31, 2023, compared to a cash cash equivalents balance of $59,200,000 for the year ended December 31, 2022, with the decrease being a result of funding operations during the Q1 this year. Also, the Q1 historically is a higher cash burning quarter due to annual bonus and insurance payments that occur in this timeframe. And compared to the Q1 of 2022, our operating cash The company believes that operations are sufficiently funded for more than the next 12 months. As previously noted, our operating plans for the current year include the benefit of cost saving actions we have already taken and we are prepared to gate future investments on PRS-two twenty and PRS-four hundred, including certain Phase 2 readiness activities for PRS-two twenty and IND enabling activities for PRS-four hundred in the interest of achieving our top priority, namely obtaining the data for the elerikabev Phase 2a study in asthma.

Speaker 1

Based on the current timelines for AstraZeneca to deliver this study, we are confident we will be able to achieve our cash reach objectives by making appropriate investment decisions, leveraging anticipated modest milestones from existing collaborations, And we will continue to pursue partnering discussions and assessing the opportunities of using the equities market to maintain pipeline progression while awaiting the elarekabev readout. Research and development expenses were $13,400,000 for the quarter ended March 31, 2023 compared to $14,100,000 for the quarter ended March 30 2022. The decrease was due primarily to lower clinical costs for SYNRIBOPUS alpha and lower personnel costs, license fees and software costs. These lower costs were partially offset by higher overall program investments on PRS-two twenty and higher preclinical costs for discovery stage programs, both partnered and proprietary. General and administrative costs were $4,000,000 for The period over period decrease was primarily it was driven primarily by lower professional services, consulting and insurance costs.

Speaker 1

For the quarter ended March 31, 2023, dollars 2,000,000 of grant income was recorded with respect to PRS 2020 compared to $100,000 for the quarter ended March 31, 2022. The decrease was due to slightly lower overall cost incurred in PRS 2020. In addition, interest income was $400,000 approximately $400,000 for the quarter ended March 31, 2023, given the impact of rising interest rates over the last 12 months compared to a de minimis amount in the quarter ended March 31, 2022. And finally, the company's net loss was $13,200,000 or $0.45 loss per share for the quarter ended March 31, 2023 compared to a net loss of $5,100,000 or $0.07 loss per share for the quarter ended March 31, 2022. And with that, I will hand the call back over to Steve.

Speaker 2

Well, thank you, Tom, and thank you for joining us all on the call today. We would now like to take

Operator

And our first question comes from Jonathan Miller from Evercore. Go ahead, Jonathan.

Speaker 3

Thanks so much for taking my question guys. I would love to ask about the 220 program. Let's suppose that Cybergen's Phase 3 looks good, looks great. What's your path forward for 2020 given other constraints on bandwidth? How can you advance rapidly off of the healthy volunteer data coming second half, again, supposing the FibroGen study is supportive?

Speaker 2

Thanks, John. Thanks for the question. So we continue to be Very mindful of the upcoming FibroGen readout for pemrevlumab and we are mindful of the guidance That data will be presented by the middle of this year. We believe that we can cost effectively manage the progression of PRS-two twenty through that time and beyond that. As a reminder, the ongoing Phase 1 is Budgeted and is continued on plan and we intend to finish that and announce top line data by the end of this year in the second for this year.

Speaker 2

And for any related activities that are gating to Phase 2a, we can modestly keep those moving forward for the near term and we do believe that the pamrevlumab readout which would be anticipated soon will if positive Lead to a very strong inflection point for PRS220 and our story and we believe that we can leverage That inflection point to cost effectively continue to advance the program towards the clinic. And as we have always done, we've looked at different ways to access Capital that leverages whether it's the balance sheet, equities or partnering and we continue to see all of those as possible things that we will continue to look over the next couple of weeks, couple of months in particular. So we will be watching closely and we look forward to and we are rooting for that program And we think that it will be further validation of the intervention point for CTTF to treat IPF. And we think that a superior Approaches to go locally.

Speaker 3

Okay. Makes sense. And then I guess sort of relatedly, although a different top different targets, For the PRS-three forty three program, which you had previously discontinued for strategic reasons, I agree that the AACR data looked really supportive. But again, If you're seeming more focused in the respiratory direction now, I know you mentioned a bunch of different Options in your prepared remarks for how to advance that program. Can you give us any color about any conversations you've been having already And what the timeline would look like for you making some sort of strategic decision about PRS-three forty three?

Speaker 2

Sure, John. Thanks. I'll start with just the data. I mean the data that we presented at AACR, albeit a small data set, They were striking. In 5 patients who were all rather heavily pretreated, all had had HER2 therapies, checkpoint blockade, Multiple patients had what is seen as one of the most amazing advancements in the HER2 space and sometime within HER2, Our patients had progressed off of those therapies and responded, not just responded, but had durable benefit in nearly all cases with this regimen on top of second line standard of care ramucirumab and paclitaxel.

Speaker 2

So although the data set are small, they're compelling. And we think that A number of groups appreciate that ranging from potential investors, private investors as we talked about a SpinCo option to Pharma, large and small. These things take time. I think no company knows that better than Pieris who has a number of partnerships under its belt and knows that The right deal isn't rushed. And so we will continue to leverage what I would characterize as very real, Very enthusiastic interest in the program that we will continue to pursue given our strategic focus to use our balance sheet and our P and L on the respiratory franchise as we had previously communicated and will continue to focus Going forward.

Speaker 2

So I'm not going to comment on the specific discussions. That wouldn't be appropriate, but I will just reiterate that Interest is real, it's advancing and I believe that there will be additional patients dosed with this drug in the future And it won't be Pieris Inc. So stay tuned. And I would say in terms of guidance, again, no deal is rushed, but I would say towards the back half of twenty twenty three is a good line of sight to be able to talk more about that program.

Speaker 3

Okay. Thanks so much.

Speaker 4

Thank you, John.

Operator

And our next question comes from Matt Phillips from William Blair. Go ahead Phipps, I'm sorry. Go ahead.

Speaker 5

No problem. Thanks for taking my question. Just curious, if pamrevlumab fails In the primary endpoint of the DEFINA-one trial, I guess what else would you be looking at that If there may be some secondary endpoints like lung fibrosis that would give you no confidence in the mechanism, but maybe just issues with obviously pamrevlumab itself or are there any other indications you might consider as well?

Speaker 2

Thanks, Matt. I mean, I'll start at a high level and I'm happy to turn it over to Shane to add just a bit of color. I would say that if the trial It's negative if the pamrevlumab Phase 3 ZEPHYRUS-one trial is negative. Of course, we We would want to understand the reason for missing the endpoint. So for example, lower than expected efficacy may not be a reason to stop development as we believe Targeting the lung directly with an inhaled and the killing will achieve a better inhibition of the actions of CTGF.

Speaker 2

So it will be a function of when one could access the data at a deeper level. While there are other Indications beyond IPF that could be relevant including progressive fibrotic interstitial lung disease, We do believe that the PRACE data are pretty compelling and that that is showing the validation of IPF as a High priority indication for CTPF intervention. So that's still in our view remains the top indication to pursue. We will, again, with caution on not wanting to scoop the conference next week or in 2 weeks at ATS, we will be presenting additional data that support I think a compelling rationale for a local approach, and that's preclinical data. But We will have news that will and press release that will detail that in due course coinciding with the poster being released later this month.

Speaker 2

Shane, you're welcome to provide additional more color on how we'd be thinking through Agrazo or other

Speaker 4

Sure. And thanks, Matt, for the question. So just to remind people that pamrevlumab did show striking Activity in the Phase 2 PRAYCE study. So there was a significant impact at the FCC level, They also had some additional assessments, including quantitative lung fibrosis. So another measure that you're actually Reducing slowing down the disease progression.

Speaker 4

When we consider the pamrevlum updated, we will certainly look at those Primary and secondary endpoints. We will also look at the behavior of placebo within the study. But just to point out a few things where we feel that we are differentiated. CTGF is expressed at high levels in the system. We don't believe that that plays any role in the lung fibrosis.

Speaker 4

However, If you actually administer a drug systemically like with pamrevlumab, there will be a large target sync there and only A portion of the drug administered will actually make its way to the lung, the site of disease. By administering our drug by inhalation, we're going to have better lung exposure and we feel that it's very important. One of the things that FibroGen has presented is a subpopulation analysis of your study where By their own admission, they feel they may be under dosing some patients. So they had identified a trough level, which they felt would give maximal So by our more potent molecule that's got a higher affinity for the targets, so it's more potent than pamrevlumab, We by our administration route, we have the ability to deliver the drug more effectively. And by our dosing regimen, we can ensure that we are also over what we believe is the Optimal dosing.

Speaker 4

I think there are some significant differences. Along with that, from a clinical strategy perspective, There's the opportunity to differentiate as well. So one of the things that FibroGen and have decided to do with pamrevlumab is Go without standard of care. We see the opportunities go with standard of care. So some strategic decisions there.

Speaker 4

Notwithstanding all of that, we're big believers in the pathway and the data that 5% generated through that Phase 2 phase. We just have to wait like everyone else for the Phase 3 data and review it when it comes So in the middle of the year.

Speaker 5

Yes. Thanks, Shane. And just quickly remind me, The Phase 1 is nebulized and that is what you plan to take forward as well.

Speaker 4

So our Phase 1 study is with a nebulizer. The nebulizer technology has moved on dramatically. So These handheld devices are pretty portable and the delivery time is just a matter of minutes. So when we talk to key opinion leaders and consider the primary research, we believe that nebulized Delivery is appropriate for the IPF population.

Speaker 5

Great. And one last question. I know you mentioned 344 collaboration with Servier. I'm sorry if I missed it. Are you planning on presenting results for that anytime soon?

Speaker 5

Are you kind of waiting also to see the landscape shake out with those targets from some Competitor programs.

Speaker 2

Yes. Thanks, Matt. It's Steve here again. Yes, I think you've had two points to your question around The timing, maybe timing for data, timing for decision on expansion. And I think, as I said before, Phase 1 escalation It can't take time.

Speaker 2

It's hard to predict when one gets to an RP2D or an optimal biologic dose. We continue to Advanced the program with CeraVe as planned, as budgeted and we will continue to look at the data over the middle This year to inform OBD RP2D and potential expansion. There is Flexibility in the collaboration around how one could parse up expansion and prioritize expansion, whether to commit expansion. And so we will be looking at Firstly, our data. We will of course also secondarily be looking at or importantly the competitive landscape and we expect additional to come out of medical conferences over the second half of the year.

Speaker 2

And of course, we have to look at our overall strategy, whereas we said, we are continuing to prioritize our respiratory franchise. So I think good data will be rewarded and we're continuing to work through the all important first part of escalation and we're not yet ready to I'll talk about the data publicly, but once we can, we will and we will likely put that out in the context of a medical conference together with Servier.

Speaker 5

Great. Thanks, Steve. Thanks, Matt.

Operator

Thank you. That was the last And I would now like to turn it back to Steve Yoder for any closing remarks.

Speaker 2

No other remarks other than to thank everyone again for your attention And for your continued support of our company. We are truly excited by the promise of our inhaled biologics pipeline and the opportunity to improve outcomes for patients with respiratory diseases. We look forward to updating you on our progress as we go forward. Thanks everyone and have a great day.

Operator

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.

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