BiomX Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 15, 2024

There are 6 speakers on the call.

Operator

Greetings, and welcome to BioMx Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms.

Operator

Marina Wolfson, Chief Financial Officer. Thank you, Ms. Wolfson. You may begin.

Speaker 1

Thank you, and welcome to the BioMx conference call to review the Q2 20 24 financial results and provide an update on our business and programs. Yesterday, we filed the quarterly report on Form 10 Q with the Securities and Exchange Commission. In addition, the press release became available at 6 30 am Eastern Time today and can be found on our website at bionix.com. A replay of this call will also be available on the Investors section of our website. As we begin, I'd like to review the Safe Harbor provision.

Speaker 1

All statements on this call that are not factual historic statements may be deemed forward looking statements. For instance, we're using forward looking statements when we discuss on the conference call the efficiency of the company's cash, potential market opportunities, the ability to drive value for stockholders, the design, recruitment, aims, expected timing and interim and final results of our preclinical and clinical trials, the regulatory process and discussions with the FDA, the potential benefits and commercial opportunities of our product candidates and the potential safety or efficacy of BX-seven zero four and BX-two eleven. In addition, past and current 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 provision, including risks that could cause actual results to differ from these forward looking statements are outlined in today's press release, which, as noted earlier, is on our website.

Speaker 1

Joining me on the call this morning is our Chief Executive Officer, Jonathan Solomon, to whom I will now turn over the call.

Speaker 2

Hi, everyone. Thank you for joining us on our earnings call. We're excited to discuss Bionic's status with you this morning. Early this year, the company took a momentous step in merging with Adaptive Phase Therapeutics or APT and completing a concurrent $50,000,000 financing. Last month, we are delighted to update an important milestone with respect to this transaction was met when our stockholders overwhelmingly voted in favor of the conversion of up to 256,000 Series X non voting convertible preferred stock issued upon the merger and concurrent financing to up to 256,000,000 Biomix common stock.

Speaker 2

The Series X preferred stock was issued to certain APT shareholders and investors who participated in the concurrent financing. As a result of the stockholder vote in favor, each share of Series X preferred stock issued converted into 1,000 shares of Biomik's common stock, subject to certain beneficial ownership limitations set by certain investors. Subject to such beneficial ownership limitations to date, over 100,000 shares of Series X preferred stocks were converted to over 100,000,000 shares of the company's common stock that were added to the company's outstanding share count. I'd like to now discuss why we're so excited about the clinical programs in our combined pipeline. As we previously announced, we expect to report important results for our 2 lead clinical assets in 2025.

Speaker 2

I'll review these anticipated readouts in just a moment. By integrating the 2 companies' programs, we believe we now have the leading phage related pipeline in advanced clinical testing. Key to the strength of our combined programs is the diversity of our complementary approaches. At Biomics, we are developing 6 phage cocktails, which can target a broad host range of various bacterial strains and address multiple resistant mechanisms, allowing treatment of patients with the same phage cocktail. We are also developing personalized phage treatment that can address bacterial diversity and potentially polymicrobial infections, tailoring a specific phage treatment to a given patient.

Speaker 2

Biomics pipeline demonstrates the diversity of our approaches. BX004, the company's novel fixed stage cocktail is advancing in development of treatment of serious chronic lung infection in cystic fibrosis patients or CF patients caused by Pseudomonas aeruginosa. During the Q2, we presented positive safety and efficacy results from the Phase 1b2a trial of BX004, including at the 47th European Cystic Fibrosis Conference and the ASN Microbe 2024, both of which took place in June. As a quick recap, after only 10 days of treatment, 14.3 percent of patients in the BX004 arm of the Phase 1b2a study converted to sputum culture negative for Pseudomonas aeruginosa compared to 0% of the patients in the placebo arm. BX004 versus placebo also showed signal of improved pulmonary function.

Speaker 2

We have entered into discussion with the U. S. FDA regarding our next clinical trial for BX004 and are making progress in preparation for its initiation, including completion of the remaining CMC work and finalizing Phase 2b study protocol. We expect to release top line results from this study in the Q3 of 2025. For our 2nd advanced clinical candidate, BX211, we expect initial top line results through week 13 to the current Phase 2 trial in the Q1 of 2025.

Speaker 2

As most of you know, eleven is our asset acquired through the merger with APT. BX-two eleven is a personalized assay treatment currently being evaluated in a randomized double blind, placebo controlled, multicenter Phase 2 trial for subject with diabetic foot osteomyelitis or DFO associated with staphylococcus aureus infection. The design of our ongoing Phase 2 study was guided in part by reports in the scientific literature of compassionate use of phage therapy, which showed positive outcome of wound healing and avoiding amputation in 11 of 12 patients. Both are lead programs we have continued to see and are grateful for the growing excitement among the clinical community. We are also grateful to our stockholders whose ongoing support has been vital for our efforts and has provided key validation for phage based therapeutic modalities we are advancing into the clinic.

Speaker 2

We believe that both BX004 and BX-two eleven have the potential to significantly change how we address the substantial unmet needs of patient with intractable infections. Overall, we are thrilled with the promising data already reported and with the key readouts we are anticipating from both of our lead programs. As Marina will review, based on the proceeds from the financing concurrent with the merger with ATP and existing capital, BioMx continues to expect to have sufficient funding to reach these multiple important clinical milestones, potentially driving significant value for our shareholders. Now, I will pass the call back to Marina, who will review BioMx financial results. Marina?

Speaker 1

Thank you, Jonathan. As a reminder, the financial information for the company's Q2 2024 is available in the press release that we issued earlier today, as well as in more detail in our Form 10 Q, which we filed yesterday after market close. I will take you through some of the highlights of our Q2 financial results. As of June 30, 2024, cash balance, short term deposits and restricted cash were $32,700,000 compared to $30,700,000 as of June 30, 2023. The increase was primarily due to our private placement financing of $50,000,000 in March 24, which was partially offset by net cash used in operating activities and the full repayment of a debt facility.

Speaker 1

We estimate that our cash, cash equivalents and short term deposits are sufficient to fund our operations through the Q4 of 2025. Research and development expenses net totaled $6,900,000 for the Q2 of 2024 compared to $3,800,000 for the same period in 2023. The increase was primarily due to preparations for Phase 2b in the clinical trial of our CF product candidate, BX004, and expenses related to our clinical trial of the DFO product candidate, BX211. In addition, the Q2 of 2024 represents the 1st full quarter following the merger with APT, incorporating the combined workforce. The increase was partially offset by higher grants received.

Speaker 1

In the Q2 of 2024, general and administrative expenses were $2,800,000 compared to $2,300,000 during the same period in 2023. This increase primarily reflects the 1st full consolidation of expenses following the APT merger, reflecting the combined workforce, professional services and subcontractor costs. Net income was $4,500,000 for the Q2 of 2024 compared to a net loss of $6,400,000 for the same period in 2023. The increase was mainly due to the change in the fair value of the warrants issued as part of the $50,000,000 pipe financing in March 2024, partially offset by our expenses and operating activities. Net cash used in operating activities for the 6 months ended June 30, 2024 was $22,600,000 compared to $9,100,000 for the same period in 2023.

Speaker 1

I should add here that we announced today a reverse stock split of 1 for 10 of the company's common stock approved by the company's stockholders and the Board of Directors. The split is intended to become effective when the market opens on August 26, 2024. And now, I'll turn the call back over to Jonathan for his closing remarks. Jonathan?

Speaker 2

Thanks, Marina. To sum up, we are excited to see our momentum in 2024 has continued through the Q2 and through the present. We have made great progress in integrating our programs following the merger with APT. And for BX004, we've had the opportunity to present our promising clinical data at additional key meetings during the Q2. We are also continuing on track for our 1st major Phase 2 readout with the expectation reporting initial top line results for BX-two eleven in the Q1 of next year.

Speaker 2

The recent stockholder vote for the conversion of preferred common stock is also part of this progress. We believe the company can reach our important clinical milestones on the current cash runway with the potential to build further value for our stockholders. We are dedicated to demonstrating the advantages of our diversified phage pipeline in addressing serious chronic infections. We continue to keep you updated on our further progress. Thank you for joining us this morning.

Speaker 2

Operator, would you open the call for questions?

Operator

Thank you. We will now be conducting a question and answer session. The first question comes from the line of Yale Jen with Laidlaw and Company. Please go ahead.

Speaker 3

Good morning and thanks for taking the questions and congrats on all the progress. And maybe I'll just start a little bit with housekeeping questions that you have reported today that in terms of the earnings per shares as well as both of the fully diluted and the basic accounts share accounts. I just want to get a little bit color in terms of how was that calculated? Was that used to net income of $4,400,000 as the basis or some other figures to calculate these numbers? And then I have a follow-up question.

Speaker 2

Sure. So good morning, Yale. It was a pleasure. I'll let Marina handle the tough questions first. So we'll let her do the responsibility.

Speaker 1

Thank you and good morning. Thank you for your question. So yes, we're going to release the full calculations obviously and they are included in the note in our 10 Q But yes, we took the full net income from the financial statements. And please note that we do have a net income this quarter for the calculation of the earnings per share.

Speaker 3

Okay, great. That's helpful. Maybe just one thing on the housekeeping that I added, which is the R and D expenses of this quarter, obviously, it's much higher. And but given that for a combined company, as you had guided at the runway towards the end of the next year, so should we anticipate R and D expenses over the next few quarters, probably at least for the remaining of this year will be trending down and so you'll be able to achieve the goal in terms of the cash runway?

Speaker 2

Yes, that's an excellent question. You're very keen to observe it. That's very true. This is the first time that we're operating. We're still implementing all the redundancies.

Speaker 2

And obviously, we do give guidance and we hold behind it, but the cash runways until the end of next year. So accordingly, you'll see kind of the budget trying to reducing in terms of burn.

Speaker 3

Okay, great. And then I just have a question on the pipeline. In terms of 4, you indicated that the Phase IIb trial will start in the Q3 of next year. So 2 things here. First of all, is that are you guys expecting to have FDA meeting later this year or have this meeting already start or conducted?

Speaker 3

And secondly, was there any strategic reasons for this one seems to be pushed out a little bit in comparison to prior sort of thoughts or estimate from our staff? And thanks.

Speaker 2

Yes. So yes, another excellent question. Another excellent question. So CF is on track, BX004 expected to report data Q3 of 2025. We did have the FDA meeting.

Speaker 2

It was a successful meeting and I think we are moving ahead with we haven't seen any limitation to the original plan. So that's on track.

Speaker 3

Okay, great. Maybe the last question here is in terms of the 211, you did talk about the top line Q1 of next year, which is a 13 weeks data in terms of the change of the authorized size. And after that, let's assume that you have a positive outcome. What might be the next step? Was that waiting for the 52 weeks outcome before you have contemplated the next step or you will have something in between after the readout of the 13 weeks data?

Speaker 3

Thanks.

Speaker 2

So our view is that the 13 week data is the more important data because the study is powered to look at a shrinkage of the ulcer side at that point. I think the follow-up is more descriptive as we're looking at amputations, right? You require a lot more patients. But if we see a good signal in week 13, obviously, we'll have to talk to the agency and our partners and supporters, both investors as well as in the government. And we will want to kind of move forward.

Speaker 2

For us that is the gating item, right? What happens in week 13? I think we can learn more from what happens in the 26 52 weeks, right? But for us, if you see something in week 13, it's as much as we can, it's pedal to the metal.

Speaker 3

Okay, great. That's very helpful. And I'll get back to the queue.

Speaker 2

Sure. Great questions. Thank you, Ye.

Operator

Thank you. Next question comes from the line of Joseph Panquis with H. C. Wainwright. Please go ahead.

Operator

Hi.

Speaker 4

This is Sarah on for Joe. Thanks for taking the question. I just had a question regarding BX211 enrollment. If you can provide any update on the status of enrollment in the study, have you seen any challenges or is it progressing as expected now? Thank you.

Speaker 2

Thank you, Sarah, and good morning. Best to Joe. So as we said, the study will be complete in the Q1. Obviously, overall, this has been a challenging study to recruit, right, spanning over more than 2 years. We didn't give specific guidance on the status of enrollment.

Speaker 2

I mean, we've kind of passed the majority of patients and kind of look forward to getting the study on time.

Speaker 1

Okay. Thank you very much.

Speaker 2

Thank you.

Operator

Thank you. Next question comes from the line of Michael Higgins with Ladenburg Thalmann. Please go ahead.

Speaker 5

Good morning. This is Farhana on behalf of Michael. I just wanted to follow-up on your comment on BX004's FDA meeting. Any feedback that you can share with us? Thank you.

Speaker 2

Thank you and good morning. Obviously, it's a sensitive, so we need to be very careful about what we can provide. But all I can say is that it was a successful meeting and our plans remain unchanged moving forward.

Speaker 5

Thank you.

Speaker 2

Sure. Thanks.

Operator

Thank you. Next question comes from the line of Yale Jen with Laidlaw and Company. Please go ahead.

Speaker 3

Thanks for taking these questions. I just like to get a little bit more color in terms of a 4 when you may be enrolling the first patient for the Phase 2b study, would you announce that when that happens?

Speaker 2

Yes. Traditionally, we didn't announce. I think that was we just kind of if there was something dramatic. So we traditionally didn't announce, but we can look into it. So far, kind of moving ahead according to plan.

Speaker 2

We didn't usually have 1st patient enrolled, something to consider.

Speaker 3

Okay. And then maybe just a little bit follow-up in terms of 211, again, for the 13 weeks data. What do you consider a good outcome in terms of the reduction of ulcer size and that will propel you guys to think more aggressively to move the program forward? And thanks.

Speaker 2

So in general, I think as we talk to the KOLs and the MENA analysis, you're looking for something like a 40% reduction of the placebo arm, right, because they're on top of standard of care antibiotics and something around a 70% on the phage arm on top of antibiotics will be exciting in our view, right. So again, this is still a small study. We're not looking at STAT SIG. I think we'll be interested in trends. But if you see something like that, then I think that could be something that we'll be excited about.

Speaker 2

These patients don't usually improve that much. So you see something along that pushes the like by 30%. That's quite

Speaker 3

a dramatic move. And maybe lastly, just in terms given this is the 13 weeks data, by the time of 52 weeks, which is about a year, would you anticipate the effect expanding or at that point, in other words, could achieve a different level of efficacy?

Speaker 2

So I think the 26 and to your point, the 52 week data is mostly about amputations, right? That's really what again, right? Patients want the ulcer to heal, but what we really care about is the amputations and that's what we'll be looking at week 52. The challenge is that, again, amputations we need a much bigger number of patients to see much of an effect. So I think we'll be looking at sort of like general high level trends if something's happening there.

Speaker 2

The data from the compassionate use, I must say, was very exciting, right? Because in 11 out of 12 cases like phage treatment has prevented amputations. But I think we want to be cautious in our guidance. So we'll look at amputations. I think that's where we're focusing on week 13, that's where the data is.

Speaker 2

I will also note that we're looking at also healing as exploratory in week 13 because that's also an indication usually when the ulcer heals, that the infection has been resolved at the bone, right. So we'll look into it. But again, study is powered for also shrinkage and everything else will be a bonus.

Speaker 3

And maybe just to tack on that a little bit more, is that do you anticipate or have you spoke with the consultant whether amputation will be the kind of endpoint that ultimately for potential approval or just simply the author reduction as well as other metrics will be potentially sufficient for the approval in this indication, which is obviously top to 3 and very few drugs has been available for this?

Speaker 2

Yes. So I think in a pivotal study, the most conservative estimate is amputations, right? That's where you need like a 300 patient study and do it properly. There is talk about looking at more imaging modalities, etcetera, and trying to be a bit more sophisticated. But conservatively, it's amputation, but potentially, I think, we'll work with all the experts to explore some other endpoints as well, of course.

Speaker 3

Okay, great. Again, thanks for taking the follow-up questions and congrats on all the progress. Maybe last one question here. This probably is for Marina. In terms of the reverse split, in the press release, you indicate that from 178,000,000 shares back to about 17,800,000 shares.

Speaker 3

Are these total share outstanding of the basic or that's the fully diluted number?

Speaker 1

So thank you for the question. Actually, I'm happy to clarify. So first of all, please note that the reverse split is not reflected in the numbers of the Q because it was only following the Q that we announced it. It will be effective August 26. And the number of shares, the 178,000,000 is just the outstanding.

Speaker 1

So that's not fully diluted.

Speaker 3

Okay, great. That's very helpful. And again, congrats on the other progress. And thanks.

Speaker 1

Thank

Speaker 3

you.

Operator

Thank you. As there are no further questions at this time, ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Jonathan Solomon for closing comments.

Speaker 2

I wanted to thank all of you again for joining us this morning and the great questions. We look forward to providing you with additional updates as we make progress. Thank you and have a good day.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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BiomX Q2 2024
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