Armata Pharmaceuticals Inc

AMEX:ARMP

Earnings Call Analysis

Earnings Call Transcript 2018-Q1

[Operator]

Good afternoon and welcome to the AmpliPhi Biosciences Corporation First Quarter 2018 Business Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there’ll be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to the Manager of Business Development, Mr. Matt Dansey. Please go ahead.

[Matt Dansey, Manager, Business Development]

Thank you, Phil. Good afternoon and welcome to our first quarter 2018 financial results conference call. This is Matt Dansey, Business Development Manager at AmpliPhi Biosciences. Joining me on today’s call are AmpliPhi’s Chief Executive Officer, Paul Grint; our Chief Operating Officer, Igor Bilinsky; and our Chief Financial Officer, Steve Martin.

During today’s call, we will be making statements related to our business that may be considered forward-looking. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based upon AmpliPhi’s current expectations and involve a number of risks and uncertainties including the risks and uncertainties described in our Form 10-Q for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission.

Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Furthermore, the information discussed by AmpliPhi on this call is accurate as of today, May 15, 2018. Except as required by law, AmpliPhi disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

With that, I would now like to turn the call over to our CEO, Paul Grint.

[Paul Grint, CEO]

Thanks, Matt. Good afternoon, everyone, and thank you for joining us on the call. Today, we’re reporting the progress AmpliPhi has made in the first quarter 2018. During the period, we announced positive top line results for the initial seven patients treated with AB-SA01 or AB-PA01 under ongoing expanded access program; signed a cooperative research and development agreement with the U.S. Department of Veterans Affairs, a collaborative agreement with the Westmead Hospital in Sydney and completed two successful financings.

In addition, we continued to build and expand the body of evidence that we believe supports the preliminary safety and activity of bacteriophage drug candidates. Detailed accounts of our expanded access cases are now or will be presented at major medical conferences. Igor will have more to say on this later in the call.

Looking ahead, we continue to target a meeting with the FDA in mid-2018 to discuss the path forward to regulatory approval for one or more of our therapeutic candidates with the potential for us to initiate the Phase 2 or registrational clinical study as early as the fourth quarter 2018.

Before we update you on our recent activity, let me remind you of the positive data that we announced on January the 3rd. As background, AmpliPhi’s ongoing expanded access program allows for severely ill patients with life-threatening infections, unresponsive antibiotic treatment to receive AB-SA01 for Staphylococcus aureus infections and AB-PA01 for Pseudomonas aeruginosa infections. Both of these investigational therapies are available to be administered for serious and life-threatening infections under expanded access in an attempt to save the lives. Such treatment occurs in the U.S. under an emergency IND and in Australia under the special access scheme.

Of the first seven patients treated, four patients received intravenous AB-SA01 and three patients AB-PA01, administered intravenously and in two cases also an inhale therapy. In all patients, bacteriophage treatment was administered together with the treating physician’s choice of best available antibiotic therapy. Participating patients suffered from bacteremia, endocarditis and lung infections, with treatment success defined as complete resolution or significant improvement of baseline signs and symptoms.

When we revealed interim top line results for the first seven patients in January, we were able to announce treatment success in six out of the seven patients or 86%. Furthermore, both investigational products were well-tolerated in all patients with no treatment-related serious adverse events recorded with over 500 doses administered intravenously or by in inhalation. One patient was determined to be a treatment failure due to death, which occurred during emergency surgery after only three days of bacteriophage treatment. The treating physician determined that death was unrelated to treatment with bacteriophage therapy.

Importantly, based on the APACHE 2 scores, a validated critical care scoring system predictive of mortality, for the seven patients prior to initiation of bacteriophage therapy, predicted mortality rate for this patient group was 46%. As such, we were very encouraged by these initial results, which we believe support the potential of AB-SA01 and AB-PA01 as a treatment option for serious bacterial infection.

Furthermore, many governmental agencies, including the FDA recognize that multidrug-resistant infections are serious problem. And we believe our approach is one that clearly needs to be further investigated in a randomized controlled trial setting. To that end, we have treated and continue to treat more patients under the expanded access program, adding to the body of data we plan to present to the FDA this year during our discussion of a path forward towards registration. To help us expand the clinical evidence for accumulating, we recently bought another site online when we signed a Cooperative Research and Development Agreement or CRADA with the U.S. Department of Veterans Affairs covering expanded access treatments for AB-SA01 and AB-PA01.

Dr. Mark Holodniy, Professor of Medicine at Stanford University, and the Veterans Affairs Palo Alto Health Care System and Director of the Public Health Surveillance for the Department of Veterans Affairs has been designated the principal investigator to lead this collaboration.

In furtherance to our efforts, to demonstrate potential of our phage therapeutics, we were recently awarded a grant from National Institute of Allergy and Infectious Disease or NIAID to advance development of AB-SA01. The grant will be used to conduct further preclinical studies of AB-SA01. The Therapeutic Development Services program funds the provision of preclinical services for selected companies and researchers in order to advance developments of promising interventional agents.

With that I’d now like to turn the call over to our Chief Operating Officer, Igor Bilinsky.

[Igor Bilinsky, COO]

Thank you, Paul. Good afternoon, everyone. As Paul noted, our expanded access program continues and more clinical experiences with AB-SA01 and AB-PA01 have been presented at medical conferences, adding to the body of evidence that we believe supports the preliminary safety and activity of our two investigational bacteriophage therapeutics.

I would like to highlight a recent presentation at the International Society of Heart and Lung Transplantation 2018 Annual Meeting. This was the first reported case of intravenous and inhaled administration of AmpliPhi’s AB-PA01therapeutic candidate that targets Pseudomonas aeruginosa. The treatment was administered by the clinical team at University of California, San Diego. As part of the oral session, hot topics and infectious diseases, a presentation titled bacteriophage treatment in the lung transplant recipient, described the case of a 67-year-old male, bilateral lung transplant recipient who developed recurrent episodes of multidrug-resistant Pseudomonas aeruginosa pneumonia over the course of several months. And emergency investigational new drug application approval was obtained from the U.S. Food and Drug Administration and the patient received treatment with bacteriophage therapeutics, including AB-PA01. AB-PA01 was administered initially intravenously and then both intravenously and by inhalation in conjunction with standard of care antibiotics. Treatment with AB-PA01was well tolerated and the patient clinically responded to therapy with resolution of pneumonia and improved respiratory status.

In addition to the positive clinical outcome for the patient, the clinical team at UCSD and AmpliPhi demonstrated that intravenously administered AB-PA01distributed to and replicated at the site of infection in the lungs. To the best of our knowledge, this was the first reported case of intravenously administered bacteriophage therapy for treatment of serious infection in the lung transplant recipients.

Two additional case study presentations have been accepted and are scheduled for medical conferences in June. We will announce the details when the abstracts are published in the coming weeks.

Case studies like these, along with the growing prices of antibiotic resistance bring increasing attention to bacteriophage therapeutics as a potential treatment against superbugs. You may have noticed that there’s been a number of recent publications discussing bacteriophage therapeutics including in the Journal of American Medical Association, the Time magazine, MIT Technology Review, Bloomberg and others. And just this weekend, an informative animated video about bacteriophage therapy supported by grant from the Bill and Melinda Gates Foundation was posted on YouTube and was among the top 10 trending videos. A list of these publications and the video are on the Knowledge Library page of AmpliPhi’s website.

And at the upcoming IDWeek Annual Conference of the Infectious Disease Society of America in October, for the first time, there’ll be a plenary session dedicated to bacteriophage therapeutics. In addition, there’s significant government focus on supporting and funding novel therapies for resistant infections. We are actively applying for government grants and contracts that may support the development of our therapeutic candidates, AB-SA01 and AB-PA01. For example, as Paul mentioned, we recently announced that the National Institute of Allergy and Infectious Disease part of the NIH will fund and conduct certain preclinical studies of AB-SA01 as part of its therapeutic development services. And we have other opportunities in active discussions.

We are also exploring partnership opportunities with larger, pharmaceutical companies to bring additional funding, along with development and commercialization capabilities to our bacteriophage therapeutic candidates. In addition, as we announced in December, we are continuing to work with Ladenburg Thalmann to assist the Company in exploring strategic alternatives in an effort to maximize shareholder value.

Now, I would like to turn the call over to our CFO, Steve Martin, for a review of our financial results. Steve?

[Steve Martin, CFO]

Thanks, Igor. I would like to share some highlights from our financial results provided in our quarterly report filed with the SEC today and as announced in our press release. Cash and cash equivalents as of March 31, 2018 totaled $8.2 million compared with $5.1 million as of December 31, 2017. This figure includes the proceeds of the two financings we conducted in the period.

Net cash used in operating activities for the three months ended March 31, 2018 was $3.5 million compared to $3.3 million for the three months ended March 31, 2017. Based on our current operating plans, we believe our existing cash resources will be sufficient to fund our operations into the fourth quarter of 2018. As of May 15, 2018, there were 16.5 million shares of common stock outstanding. Research and development expenses for the first quarter of 2018 and the first quarter of 2017 were $1.5 million.

General and administrative expenses were $1.6 million for the first quarter of 2018 compared to $1.9 million for the first quarter of 2017. The decrease was primarily related to a $0.2 million decrease in legal and other professional fees as well as a decrease in non-cash stock-based compensation.

With that I’d like to turn the call back to Paul.

[Paul Grint, CEO]

Thank you, Steve. To summarize, we believe we are well-positioned to enter into near-term constructive discussions with the FDA on a regulatory path forward for our bacteriophage product. Subject to these discussions, it could be possible for us to initiate a Phase 2 or pivotal study for one or more of these drug candidates as early as the fourth quarter this year. We believe our therapies hold tremendous promise to provide lifesaving treatment to critically ill patients suffering from antibiotic-resistant infections.

With that I would like to now open the call to your questions. Phil, would you please assist?

[Operator]

Sure. Thank you. [Operator Instructions] The first question comes from Joe Pantginis with HC Wainwright. Please go ahead.

[Joe Pantginis, HC Wainwright]

Hey, guys. Good afternoon. Thanks for taking the question. First, was curious with regard to new collaborative agreements with the Veterans Affairs and Westmead out of Sydney. have you seen any impact yet with regard to identifying patients?

[Paul Grint, CEO]

Joe, good afternoon. This is Paul. Thank you for the question. As we talked about before, we plan to have a limited number of sites, both here in the U.S. and in Australia. We obviously formulate both these two on board as we reported here. And we continue to enroll patients as we had planned and expected in our expanded access. Can’t really say much more than that. I mean clearly, I think we’ll and we do plan to bring on a couple of additional sites as well. But, the good news is that the medical need is there and we are still currently treating patients under expanded access.

[Joe Pantginis, HC Wainwright]

And my next question is variation of a question I’ve asked in the past but obviously we have a new update today and your plans about getting to the FDA, but I will preface this by saying that my question is certainly pending FDA feedback post your meeting. But with that said, what would you say is the Company’s wish list with regard to a Phase 2 or registrational study, like type of indication you might want to go into, numbers of patients, study design? Obviously you talk about randomized controlled setting, so that’s important. So, I am just curious as to the wish list you might have, again pending FDA input.

[Paul Grint, CEO]

Great question, you just highlighted our wish list. Clearly, as we talked about before, the goal of meeting with the FDA is to agree on the indications which are priority. That is being supported clearly by the types of patients that we’re treating in expanded access. But that’s demonstrating the medical need is unfortunately these patients fail, existing therapies. Study design is very important. We have a pathogen-focused therapeutic approach here. That’s something that the FDA doesn’t recognize. It’s early days, with regard to the guidance [ph] in that space. So, we want to obviously have that dialogue with them. We believe it’s very important that we actually run control clinical trials. It’s clearly have a design enables us to demonstrate the effectiveness of the phage. So, those are three key points together with others that we do plan to discuss with the FDA.

[Joe Pantginis, HC Wainwright]

And I think the fact that you mentioned that at least the patient population, if I heard you correctly that you might be targeting, would still be the level of disease or level of unresponsiveness that are in the EAP at the moment. So, I guess from the control standpoint, I guess hopefully, it would shift the balance towards the phage plus antibiotic with the antibiotic not necessarily being effective in those patients but still being required from an ethical standpoint, would that be a fair assessment?

[Paul Grint, CEO]

Yes. That’s a very fair assessment. If you look at generally how the sort of pathogen focused approach is done, I mean, we -- it is -- you compare your investigative therapy against the best standards of care. It’s unfortunate that the best standards in care only may work for a limited number of the patients, whether it’s actually helping them overall treat infections, or even save their lives. So, you’re right, that is generally the approach that we’ll be taking. I think, we’ve discussed this before, we don’t look at bacteriophage therapy as an alternative to antibiotic therapy. Based on the biology there’re a lot of good reasons to use the two together with regard to obviously biofilm disruption by the phage therapy and the restoration of antibiotic sensitivity that we’ve seen in a lot of preclinical work, and anecdotally clinically as well, as you introduced phage therapy while patients are still on antibiotics.

[Operator]

[Operator Instructions] The next question comes from David Bautz with Zacks Investment Research. Please go ahead.

[David Bautz, Zacks Investment Research]

I’m curious if you’re going to be providing another update on patient outcome before meeting with the FDA.

[Paul Grint, CEO]

David, maybe I will get Igor to address that one.

[Igor Bilinsky, COO]

Thanks, David. Good afternoon. So, as Paul mentioned, we are planning to meet with the FDA forwardly this year. And before that we’ll have two -- we expect two presentations with medical conferences where detailed data will be presented but some of the patients we cannot share the details yet because the abstracts have not been published, but we expect to be able to do so in a couple of weeks and some of those results we’re in fact very excited about and we’ll look forward to the public hearing about them.

As far as the cumulative updates, I’m not sure we will provide another one before the FDA meeting. It will somewhat depend on the timing of the various events but we’ll keep you updated to the extent possible, as well as the public. But what I think is most important though as what we’re focusing on is we’ve obtained a substantial amount of data from these expanded access. And again, a lot of it has not been presented yet and will be in due time. And we are very excited about the meeting with the FDA this year and about chatting the path forward and randomized controlled clinical trials, which will be essential for proving the safety and effectiveness of phage therapy properly. So that will be most of our focus in the second half of this year, while the expanded access program will also continue.

[David Bautz, Zacks Investment Research]

Okay. What percentage of inquiries for potentially treating patients, how many of those do you ultimately end up treating or is it essentially all of them?

[Steve Martin, CFO]

That’s a difficult question to answer, David. Let me just say it’s not all of them because -- let me give you the reason why. As we’ve explained, the emergency and IND process and the special access scheme really is to provide investigational therapies in the situation of serious life-threatening disease. We do get requests from patients who are in these hospitals or physicians who are treating patients on an account [ph] patient basis who perhaps read a little bit about phage and are interested in potentially trying it. Clearly, those patients don’t meet the requirements from the regulatory standpoint. So, in that situation we have to decline the opportunity. So, it’s not all requests we get. Clearly, for a sick patient who is in hospital with a serious disease situation, we look at all of those and judge all of those on their merits with regard to meeting the appropriate regulatory guidelines.

[David Bautz, Zacks Investment Research]

And lastly, are you able to get any type of dosing data from treating these patients or do you just kind of have a set dose that you’re using for everyone?

[Paul Grint, CEO]

So, we previously described in the release that we did on January the 3rd, our dosing scheme. It’s not been absolutely consistent for patients but we’re coming down. So, I think some level of consistency that you will see which is generally intravenous administration twice a day we’re looking at treatment periods, so maybe a couple of weeks or longer depending on how the patient responds. And in addition, obviously, we’ve treated two patients through the inhaled route administration as well. So, I think the long answer to your question is yes we’re getting I think some insights in dosing regimen, given the fact that we’ve seen the positive responses in these patients. But, also there’s a practicality in here, twice a day dosing for a very sick patient is eminently doable in a -- particularly in this setting. They’ll be on antibiotics that frequently if not more.

[Operator]

Okay. This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Paul Grint for any closing remarks.

[Paul Grint, CEO]

Thank you, Phil. Thank you everyone for participating in today’s call. If you have any additional questions, please reach out to us or our Partners at Westwicke. Thank you again and have a good evening everyone.

[Operator]

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