Q1 2024 Biomx Inc Earnings Call

Participants

Avi Gabay; Chief Financial Officer; Biomx Inc

Jonathan Solomon; Chief Executive Officer, Director; Biomx Inc

Joe Pantginis; Analyst; H.C. Wainwright & Co., LLC

Yale Jen; Analyst; Laidlaw & Company

Presentation

Operator

Hello, and welcome to the BiomX first-quarter 2024 financial results. (Operator Instructions) As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Avi Gabay. Please go ahead, Avi.

Avi Gabay

Thank you, and welcome to the BiomX first-quarter 2024 financial results and corporate update conference call. The press release became available just after 6:30 AM Eastern Time today and can be found on our website at www.biomx.com. A replay of this call will also be available on the Investors section of our website.
Before we begin, I'd like to review the Safe Harbor provision. All statements on this call that are not factual historical statements may be deemed forward-looking statements. For instance, we're using forward-looking statements when we discuss in the conference call, the sufficiency of the combined company's financing potential stockholder approval of certain matters related to the securities issued and related matters in connection with the Adaptive Phage Therapeutics or APT merger.
Potential market opportunities, the ability to drive value for stockholders, the design recruitment, aim expected timing and interim and final results of our preclinical and clinical trials, the regulatory process and discussion with the FDA, the potential benefits and commercial opportunities of our product candidate and the potential safety and efficacy of BX004 and BX211.
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 trials. 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. Joining me on the call this morning is Jonathan Solomon, Chief Executive Officer of BiomX. With that, I'll turn the call over to Jonathan.

Jonathan Solomon

Good morning, everyone. For the first time, BiomX's reporting results for our combined entity following our merger with APT in March, and Avi will elaborate more on this. Overall, the first quarter of 2024 was nothing less than transformational for BiomX. The company has now entered into a new era. With the merger with APT in March, we have expanded our mid-clinical stage programs, which we believe constitute the leading phase related pipeline in the industry. We are now advancing diverse approaches focused on developing natural phage cost and personalized phage shipments.
With the recent merger, we've added a second Phase 2 product candidate, BX211 for the treatment of diabetic foot osteomyelitis or DFO, and I'll review our progress shortly. BX004, our most advanced mid-clinical stage candidate has already shown what we believe are promising clinical results, supporting the potential of phage therapy to treat harmful bacteria underlying serious chronic infections in cystic fibrosis or CF patients. The broadening of our pipeline, the diversity of our approaches and the data we've seen to date, are all key in reducing risk inherent in biotech development.
Concurrently with the merger with APT, we raised $50 million of gross proceeds in a private placement led by affiliates of Deerfield Management and the AMR Fund, with a participation of additional existing and new investors, including the Cystic Fibrosis Foundation, OrbiMed, and Nantahala Capital Management. These important and accredited life sciences investors provides further validation for the potential of phage therapy as a new therapeutic modality and the strength of our lead candidates, each having the potential to advance the standard of care in their prospective disease area.
Including net proceeds from the financing and our existing capital, BiomX now expect to have sufficient funding to reach multiple important clinical milestones through 2025, including expected data readouts for our lead candidates, BX211 and BX004 in the first quarter of 2025 in the third quarter of 2025, respectively. We believe these Phase 2 data readouts could potentially drive significant value for our stockholders. We are thrilled with the continuing progress of both of our Phase 2 programs.
On our last earnings calls, I had the opportunity to take a deep dive into BX211 as part of the merger with APT. As a reminder, BX211 is a personalized phage treatment being evaluated in a randomized, double-blinded, placebo-controlled, multicenter Phase 2 trial for subjects with DFO associated with Staphylococcus aureus. This is an area of high unmet need.
Each year, there is a staggering number of approximately 160,000 lower limb amputations in diabetic patients in the US alone, 85% of which are caused by DFO, according to the Centers for Disease Control and the literature. We believe that phage based therapeutic approaches have the potential to greatly improve treatment outcomes in DFO. Report in the scientific literature of compassionate use with phage therapy have shown that 11 of 12 cases resulted in positive outcomes of wound healing and avoiding amputation.
Finding from these cases played an important role in the design of the ongoing Phase 2 of the BX211. With a target enrollment of 45 patients, the trial has already surpassed 70% of this target, and we remain on track to report on the week 13 treatment results in the first quarter of 2025. We are also excited by the progress of BX004, on our other lead mid-clinical stage candidates. BX004 is a fixed multi-phage cocktail for the treatment of CF patients with chronic pulmonary infections caused by Pseudomonas aeruginosa, a main contributor to the morbidity and mortality in these patients.
In January this year, we were granted Orphan Drug Designation by the FDA for BX004. More recently, in April, we presented positive safety and efficacy results from Part 2 of our Phase 1b/2a trial of BX004 at the European Society of Clinical Microbiology and Infectious Disease or ESCMID Global Congress. In fact, our presentation was selected as the top poster ranking among the top first, second percentile of top-rated abstracts and the category submitted and accepted at the Congress.
We believe that the data for BX004 are the most promising advanced findings published to date for phage therapy for the treatment of chronic pulmonary infections in CF patients. We've shown with BX004 for both conversion to sputum culture negative Pseudomonas aeruginosa in 14.3% of patients and demonstrated signals of improved pulmonary function after only 10 days of treatment. Both findings, in contrast the results and placebo. Under our Phase 2b trial, we now plan to treat for a much longer treatment duration of two months, which we believe has the potential to demonstrate a more pronounced effect on both microbiological and lung functional readouts.
As previously reported by mid-2024, we anticipate holding a Type C meeting with the FDA to discuss our clinical development plans for BX004. Pending alignment with the FDA and completion of the remaining CMC work, our plan is to submit a Phase 2b study protocol to all relevant regulatory authorities and initiate the study by the end of this year. As already noted, we estimate releasing top-line results from this study in the third quarter of 2025. We are thrilled to have what we believe is the broadest and most advanced phage pipeline with promising data already reported and key readouts in Phase 2 studies in both our lead programs in 2025.
On this final note, I'll now pass it over to Avi to review our first quarter 2024 financial results. Avi?

Avi Gabay

Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q that was filed yesterday. I will walk you through some of our brief highlights. As of March 31, 2024, cash balance and short-term deposits were $44.1 million compared to $30.3 million as of March 31, 2023. The increase was primarily due to the private placement, which was partially offset by net cash used in operating activities and the repayment of the debt facility in March 2024. The company estimates, its cash, cash equivalents and short-term deposits are sufficient to fund its operation throughout the fourth quarter of 2025.
In the first quarter of 2024, research and development expenses net totaled $4.1 million compared to $4.6 million in the first quarter of 2023, mainly because of less expenses due to the end of the CF clinical trial and was partially offset by lower grants payment from the Israeli Innovation Authority and R&D expenses related to the APT that were incurred after the merger.
General and administrative expenses were $2.7 million for the first quarter of 2024 compared to $1.6 million for the same period in 2023. The increase was primarily due to expenses related to the merger with APT and the concurrent private placement. Net loss for the first quarter of 2024 was $17.3 million compared to $6.4 million for the first quarter of 2023. The increase is mainly due to change to fair value of private placement warrants that were issued in this quarter.
Net cash used in operating activities for the first quarter of 2024 was $11.4 million compared to $5 million for the same period in 2023. On March 15, 2024, we closed the merger with APT, concurs with an investment of $15 million. We would like to emphasize that, although after the financing, we believe we will have sufficient cash, cash equivalents and short-term deposits to fund our current operating plan at least 12 months, our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
This is mainly due to the potential risk of our stockholders, not approving the conversion of the convertible preferred stock that was issued as part of the merger with APT and the concurrent investment.
And now I'll turn the call back over to Johnathan for his closing remarks. Jonathan?

Jonathan Solomon

We've accomplished a lot so far in 2024, and we're looking forward to the continuing substantial momentum at BiomX this year and into 2025. With recent development, BiomX has set itself apart as a leader in developing phage-based therapeutics. The merger and $50 million investments from top institutional healthcare investors allowed us to expand our pipeline and now position us to achieve key data readouts next year.
By advancing our BX004 and BX211 clinical programs, our company is poised to build significant value for our stockholders. As at the recent ESCMID Congress, our team will continue to seek important opportunities to present in peer-reviewed forums. Based on our recent financing, we believe the company has sufficient cash runway to reach additional important clinical milestones as we advance our phage candidate addressing serious chronic infections. Indeed, it is a new era for BiomX.

Question and Answer Session

Operator

We'll now be conducting a question-and-answer session. (Operator Instructions)
Joe Pantginis, H.C. Wainwright.

Joe Pantginis

Hey, guys, good morning and good afternoon. Thanks for taking the questions. So two questions, Jonathan, first for the upcoming Phase 2b in CF, I was just curious, I mean, even since your year-end call or what have you, have had been talking to you know, additional physicians and KOLs. Has there been any additional evolution in your thinking about the design of the study, inclusion criteria, et cetera, going into your Type C meeting? And then the second question is how are your integration efforts going with regard to the varying manufacturing facility. Thanks a lot.

Jonathan Solomon

Good morning, Joe, and thanks for the great questions as always. So first on the CF study. So yeah, we spent quite a lot of time analyzing the data and working hand in hand with the CF Foundation. So I think we have a good handle on the design of the Phase 2b. I'm trying to address some of the questions that we've discussed and trying obviously to increase the percentage of patients that experience conversion and get, you know, even clearer signals on both microbiology as well as clinical endpoints.
So I think that is as matured. Again, I think we're waiting for the FDA meeting, and we'll see kind of where the feedback is. If all goes according to plan, then I think we're locked and loaded to initiate the study at the end of the year. So far, I think again, there is a lot of work upfront. So I think we feel good about it. The integrations are now in sunny BC, by the way, the weather is gorgeous. And it's definitely not a simple task to integrate these two companies. But I think as time goes, the rationale kind of plays out, right?
So I do think it plays into APT's strength in terms of the manufacturing capability, the access to the compassionate cases, the knowledge, access to governmental agency. So I think all of those are strengths that quite frankly BiomX lacked. So I think it's proceeding well. Like every integration, it's not simple. But there's been a lot of effort, the teams have been traveling quite extensively. And now I think we feel that the situation has sort of stabilized and there's very clear work plans, budgets approved and we're ready to go. So crossing our fingers to kind of continue the momentum and again, generate more value.

Joe Pantginis

Appreciate the comments. Thanks, Jonathan.

Jonathan Solomon

Pleasure as always.

Operator

Yale Jen, Laidlaw & Company.

Yale Jen

Good afternoon and thanks for taking the questions and congratulations Jonathan. I've got two questions here. First one just follow-up with Joe's question, which is in terms of the Phase 2 study you're proposing, would that be of potentially adding an extension after the trial was done, so the patient can get a longer treatment? And that's one, and then I have a follow-up.

Jonathan Solomon

Okay, so I think the Phase 2 is already quite a long duration, right? We're going for two months, and we'll follow up the patients and think about whether we extend if we're seeing conversion. So I think these are items that we're discussing. And I think a lot depends on feedback from FDA, that will be a longer follow-up for sure. I do think there's a chance to also explore extending it. Definitely, I think we'll want to extend to some extent in the patients that have experienced conversion, kind of see how long can we keep the bug at bay. So I think that would be very dramatic. So it's definitely one of the items that we're discussing. And Yale, I believe you had another question.

Yale Jen

Yes, I do. And this is a little bit more fundamental questions here. As we know that the virus -- the phage, the lytic and the lysogenic space. So how would you ensure that all your products are retained as in the lytic state and that will be the most -- that is the functional state of the phage while killing the bacteria. And thanks.

Jonathan Solomon

Yeah, it's a good question. And you know, viruses are -- phage are viruses, right? So I do think it's a valid analogy. You know, by the way, the big conference like viruses and microbes, the phage conference. I think to your point, the FDA has been very clear on not wanting to advance forward phage, which are lysogenic, right? And the way to address it is actually by making sure that all the phage that we deploy, whether in the personalized approach such as the DFO study or in the cocktail actually don't have any lysogeny genes.
So we sequence everything. Again, these are quite a few genes so it's not that a spontaneous single mutation will introduce lysogeny, right? It's not that we knocked off lysogeny with a single mutation, there's no lysogeny genes whatsoever. So the probability of a phage kind of acquiring or developing lysogeny genes is symmetrical.
So that's the approach, again, sequencing, making sure that the phage don't have those capabilities. And it's all part of the battery of tests such as generalized transaction and other attributes that the FDA has been very clear on what kind of characteristic and what they want to see and what characteristics they don't want to see in a phage product undergoing development.

Yale Jen

Okay, great. That's very helpful for investors and again, congrats on all the progress and look forward to talking to you as well.

Jonathan Solomon

Thank, Yale for the kind words.

Operator

Michael Higgins, Ladenburg Thalmann.

Hi, guys, good morning. This is for [Johanna] on behalf of Michael. Congrats on your continued progress on two questions from us. The first on BX004. Could you confirm with us that aligning with the EMA is also in 2024? And the second question is on BX211. Any gating factors to completing enrollment in the Phase 2 DFO study?

Jonathan Solomon

Good morning and good questions. Just to make sure regarding the first question, you mean like the European compliance of the BXL004?

Yes.

Jonathan Solomon

Got it. Okay. So all good question. Again, BX004 going after CF orphan indication, as we've talked through the years, right, recruitment is not trivial. We struggled a bit in the Part 1. And I think then we gained a lot of momentum in the Part 2. But that already was a global study, right? So already in the Part 2 of the Phase 2a, we had US sites, European sites as well as Israeli sites. So that's going to continue. I think we're looking at much more sites in the in the second study of the Phase 2b. Definitely Europe is going to be key. I think there's -- we've experienced, I think a very good recruitment in the US, and we'll definitely continue that. So that's in the works and part of the work plan and the timelines that we've presented.
BX211, so enrollment is going well. As reported this morning, 70% of patients have been enrolled. Again, I think these studies are not trivial, that's a complex indication. We want to verify that the patients have the bacteria. We're deploying the phage banks, so that means that we shipped basically phage to our sites. We optimize the best phage for that patient, and we ship it back and that's the treatment that the patient gets.
So we have seen challenges. Again, there's a lot of experience in the system by now with these studies so I think we've learned a lot. We will put some effort to try to from if we can improve recruitment rates. But so far, it's going well and it's meeting our expectations. But we know, clinical study is always difficult. So let's just hope it continues the way it has.

Great. Thank you.

Operator

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Jonathan Solomon

Thank you again, everyone, for joining us this morning. We look forward to providing you with updates throughout the year and have great day. Thank you.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.