Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings Year End 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Following the formal remarks, we will open the call up for your questions. I would now like to turn the call over to Will O'Connor of Stern Investor Relations. Please proceed..

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company's year-end 2019 earnings results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release which outlines the topics that we plan to discuss on today's call.

The release is available at biopathholdings.com. With me today from Bio-Path are President and CEO, Peter Nielsen and Vice President of Finance and Accounting, Anthony Price. Before we begin the call, I'd like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties.

These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call. With that, I'll now turn the call over to Bio-Path's CEO, Peter Nielsen..

Thanks, Will. Good morning, everyone and thank you for joining us today. Goodbye [ph].

Am I still on the call?.

Yes, that was our Wheels [ph] line disconnecting..

Okay. So, good morning and I'm pleased to be addressing you all today to discuss the significant progress we made in 2019. We saw important advances across our clinical development pipeline, and meaningful improvements to our company's valuation.

The progress we made throughout 2019 formed the foundation for us to advance and expand our clinical portfolio toward key inflection points in 2020.

Throughout 2019 we continue to execute on our clinical development plans across our DNAbilize platform of an innovative RNAi nanoparticle therapeutics to treat patients suffering with a variety of life-threatening cancer indications.

Despite some groundbreaking progress with immune oncology, and combination therapies, there continues to be a large unmet medical need for a great number of cancer indications.

We are very excited about the potential for our DNAbilize to play an important role in the treatment paradigm for these difficult to treat cancers and look forward to building on our compelling body of clinical evidence in support of those goals.

So let me begin with a DNAbilize platform so you can understand and hopefully share our enthusiasm for it's potential. As you know, the DNAbilize platform is our proprietary anti-sense RNAi nanoparticle technology, which we use for the creation of nucleic acid therapeutics.

DNAbilize therapeutics integrate with the cellular membrane because of their unique structure, allowing the anti-sense drug to be delivered to the disease cells with high uptake into the cell, the incorporation into the lipid layers. There has been no evidence of toxicity associated with our technology.

We are extremely enthusiastic about the potential for our DNAbilize platform for developing novel treatments for patients suffering from diseases with high unmet medical need. Now let's turn to the progress we've made advancing our lead product candidate, prexigebersen.

Prexigebersen is being studied in a Phase 2 clinical trial for the treatment of AML.

As a reminder, this trial is a multi-center trial that originally studied prexigebersen in combination with low-dose cytarabine or LDAC, in de novo patients with previously untreated AML who are not otherwise eligible for standard or high intensity chemotherapy regimens or who have elected a low intensity regimen.

The trial was open-label with a two-stage design to assess the safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen. The primary endpoint of that study was complete remission, including patients who achieved incomplete hematologic recovery and complete remission within incomplete platelet recovery.

Secondary endpoints assess the safety and efficacy of prexigebersen, including overall survival, time to response, duration of response, and adverse events as evaluated by physical examination findings, vital signs and clinical laboratory tests. In April of 2018, we presented compelling interim results for our Phase 2 study.

And during the first quarter of 2019, we were pleased to report additional analysis from this study.

In our original interim analysis from this ongoing Phase 2 study, our results showed that 47% of the evaluable patients showed some form of response to the combination treatment, including four patients with complete remission or CR 24%, and four patients with stable disease including one patient who achieved a leukemia-free status, and one patient who had significantly reduced bone marrow blast.

As you may recall during the first quarter of 2019, we announced updated interim results from this study.

The updated interim results show that the efficacy profile had improved to where 11 or 65% of the 17 evaluable patients had a response, including five or 29%, who achieved CR including one CR with incomplete hematological recovery or CRI, and one morphological leukemia-free state, and six stable disease responses, including two patients who had greater than 50% reduction in bone marrow blast.

Moreover, investigation by the principal investigators observed that 68% of these patients were secondary AML and extremely difficult class to treat.

These updated interim results from stage one of our Phase 2 study of prexigebersen and in de novo AML patients only increased our confidence in the safety and efficacy profile of prexigebersen and underscore it's potential to treat AML patients.

The complete response rate for LDAC treatment alone for the class of patients in this study was benchmark at 7% to 13%, whereas prexigebersen treatment with LDAC showed a 29% CRI rate with a highly favorable safety profile.

These data are particularly compelling and encouraged us to prioritize advancement of prexigebersen in combination with standard-of-care. The approval of frontline therapy, venetoclax provides an opportunity to add prexigebersen to the combination of venetoclax plus decitabine for treatment of de novo AML patients.

We view prexigebersen as an ideal combination candidate with frontline therapy. Our aim is to add prexigebersen with the leading frontline therapies to improve treatment options for patients. As the treatment landscape evolves, we will continue to respond to those advances.

The plans for our registration directed clinical development program for prexigebersen as a treatment for AML reflects these changes. Firstly, we have amended the existing stage two clinical trial. With key changes in the amended Phase 2 study as the in-patients with high-risk myelodysplastic syndrome or MDS, and refractory relapsed AML patients.

The restructured Phase 2 clinical trial now has two cohorts of patients; the first cohort being untreated AML patients as per the pre-amended trial but with the addition of high-risk MDS patients, and a second cohort comprised of refractory relapsed AML patients and high-risk MDS patients.

The amended Phase 2 study evaluated the safety of prexigebersen in combination with decitabine hit both cohorts of patients and adults of 60 milligram per square meter in combination with decitabine. The study evaluated patients for a safety assessment of prexigebersen and decitabine, determine the combination to be safe in six evaluable patients.

We're in the process of modifying testing of both cohorts of patients to add venetoclax to the prexigebersen-decitabine combination treatment. Once we have completed six patient safety assessment of the prexigebersen-decitabine-venetoclax combination, the efficacy segment of this trial had commenced.

It is anticipated that each cohort will include an interim assessment of 19 invaluable patients that would assess whether the treatment of efficacy or the combination of prexigebersen, decitabine and venetoclax exceeds the efficacy of current standard-of-care therapy with statistical significance.

Upon such favorable data, we intend to petition the US Food and Drug Administration or the FDA for accelerated approval. The efficacy segment of the trial is expected to be conducted at 10 clinical sites in the United States, of which we now have nine sites committed to the Phase 2 program.

Two additional sites remain as candidates to fill the tenth site spot. Moving forward, we plan to evaluate potential clinical sites in Europe with an emphasis on patient accruals.

Overall, these transformational steps will result in two registration directed cohorts of our Phase 2 clinical trial in AML, it is planned for both cohorts to study prexigebersen plus decitabine plus venetoclax, one for untreated AML and MDS and the other for relapse refractory, AML and MBS.

Before turning to our other programs, I'd like to briefly touch on our planned Phase 1 clinical trial of prexigebersen in patients with advanced solid tumors, including ovarian and uterine, pancreatic and hormone refractory breast cancer.

This trial was expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen in solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes and it is our hope that prexigebersen may provide clinical benefit for such patients.

We filed an investigational new drug application or IND and expect to begin this study in 2020. Turning now to plans for BP1002, our second therapeutic candidate which targets the BCL2 protein. During the fourth quarter of 2019, we filed an IND application for a second pipeline candidate, BP1002.

Venetoclax has also shown activity against the anti-apoptotic protein, BCL2 and works by neutralizing the proteins BH3 domain. It is an approved treatment for chronic lymphocytic leukemia or CLL patients and untreated AML patients.

However, with the exception of some patients treated with cell transplantation, disease relapse invariably occurs often times due to BH3 domain mutation overtime. BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the BH3 domain.

As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapse, including AML patients, who previously received venetoclax treatments. In November 2019, the FDA granted IND clearance to study BP1002 as a potential treatment for CLL including venetoclax relapses in lymphoma.

We can amend this registration to include AML relapses if those occur. The plan to modification of our Phase 2 clinical program in AML to include venetoclax combination treatment with prexigebersen will give us an early experience with treating BCL2 driven anti-apoptotic in these patients.

We expect to begin our first in human study of BP1002 in the first half of 2020. Finally, let me review our progress with our third drug candidate BP1003 which targets the STAT3 protein. This was a program for which we have considerable excitement for it's future based on very promising preclinical data presented in 2019.

We are studying BP1003 for the treatment of pancreatic cancer in a patient-derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments.

The results from our preclinical studies of BP1003 were highlighted in a poster presentation at the American Association of Cancer Research Annual Meeting for the AACR in Atlanta in April. 2019.

The potential for our STAT3 is compelling for a number of reasons, signal transduction and activator of transcription-3 or STAT3, though typically inactive in normal cells is aberrantly active in cancer cells.

The abilities of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induce vascular formation, and invade distant organs are well recognized hallmarks of cancer. STAT3 is a regulator of the genes involved at these cancer processes.

More recently, the capability of tumors to evade immune surveillance and avoid destruction by the immune system has also gained significant acceptance in the cancer research field. STAT3 which is a point of convergence for many oncogenic pathways has emerged as a critical mediator of tumor immune evasion at multiple levels.

Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic cancer.

Activation of STAT3 correlates with poor clinical outcomes, high grade disease and metastasis, and has been linked with resistance to chemotherapy including gemcitabine considered a standard-of-care agent for advanced pancreatic cancer. Therefore, inhibition of STAT3 in combination with chemotherapy is expected to produce enhanced clinical benefit.

The poster at AACR highlighted for anti-sense oligo sequences directed against STAT3 messenger RNA, identified by Bio-Path and manufactured using DNAbilize anti-sense RNAi nanoparticle technology.

Cell viability test, western blots were conducted to determine the inhibitory effects of liposome incorporated STAT3 anti-sense oligo on non-small cell lung cancer in AML cells.

An ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic patient-derived xenografts to study the overall activity of BP1003 alone, and in combination with gemcitabine. Using previously defined criteria, tissue slice viability inhibition greater than 30% with a p-value less than 0.05 was a response.

For validation of ex vivo results, pancreatic cancer patient-derived xenografts of tumor bearing mice were administered BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days.

In the live tissue assay, BP1003 at a dose of 10 micromolars significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer patient-derived xenografts by more than 30% with the p-value of less than 0.05.

The combination of BP1003 and gemcitabine further enhanced ex vivo efficacy of BP1003 in a subset of patient-derived xenografts. In the in vivo study with pancreatic cancer patient-derived xenograft models, a combination of BP1003 and gemcitabine caused tumor regression during the 28-day drug treatment period.

This anticancer activity was maintained for another 21 days even when drug treatment had ceased. These very encouraging data were well-received earlier this year at AACR where we had universally enthusiastic response from the audience.

We are particularly excited to launch this program as it will be our first in human validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options.

In addition, BP1003 was selected as the most potent liposome-incorporated STAT3 anti-sense sequence in decreasing non-small cell lung cancer cell viability. Further validation in AML cells demonstrated that BP1003 inhibited cell viability and STAT3 protein expression.

We are excited by these preclinical data and for the potential role BP1003 may play in addressing solid tumors, an area that to-date has shown difficult to treat with current therapies.

Moving forward, we are undertaking IND-enabling studies for BP1003 this year with a goal to file an IND application with it's very promising product candidate later in the year. As you can see, 2019 was a very productive year in terms of our clinical development programs.

We continued to advance those important programs and remain committed to evaluating new opportunities to capitalize on the potential of our DNAbilize technology platform, and other oncology indications. With that, I'll now turn the program over to Anthony Price for a brief review of our 2019 full year financials along with balance sheet highlights.

Anthony?.

Thanks, Peter. The company reported a net loss of $8.6 million or $3.24 per share for the year ended December 31, 2019, compared to a net loss of $8.6 million or $14.38 per share for the year ended December 31, 2018. Research and development expense for each of the years ended December 31, 2019 and December 31, 2018 was $4.6 million.

General and administrative expense for the year ended December 31, 2019 increased to $4.1 million, compared to $3.4 million for the year ended December 31, 2018, primarily due to increased legal fees and salaries and benefits expense. As of December 31, 2019, the company had cash of $20.4 million compared to $1 million at December 31, 2018.

Net cash used in operating activities for the year ended December 31, 2019 was $8.4 million, compared to $6.1 million for the comparable period in 2018. Net cash provided by financing activities for the year ended December 31, 2019 was $27.8 million. With that, I'll now turn the call back over to Peter..

Thanks, Anthony. We have an exciting year ahead with all three of our clinical development programs. We look forward to advancing each of these through value creating inflection points with the coming year and remain confident that our strength and balance sheet will support these goals.

As ever, we appreciate your support as together we advance our DNAbilize platform in a number of important oncology indications that should benefit cancer patients worldwide. With that operator, we're ready to open the call for questions..

[Operator Instructions] Our first question comes from Yi Chen with H.C. Wainwright..

Thank you for taking my question. My first question is regarding the triple combo trial of prexigebersen plus decitabine and venetoclax.

Can you give us the timeframe that expect within which you expect to complete a safety evaluation of the triple combo?.

Well, that should -- the safety evaluations have typically taken maybe three to six months, including wrapping up the results. I mean, we're going to have quite a few sites involved, and so I think we should comfortably be able to do that..

So just to clarify, no patient has been dosed with the triple combo yet, right? And if you can comment on additional European based sites, that would be helpful..

Yes, no one has been treated with the triple combination. We are being readying just to get that to IRBs for approval and we have all the documentation done, it's just now the paperwork process, as you know, can take some time depending on the frequency of site IRB meetings and those kinds of things.

European -- the sites will be -- I've had some -- our CRL [ph] was there; it's groups come from actually European operations, and then they expanded into the US; so it's fairly large are very confident, and so, we are using those people to pull us.

But Central Europe is more the area that we plan to go, and we believe, based on discussions with our CROs, that those are places that we should be able to have access to patients, more the Central Europe area though..

Second question.

Regarding the prexigebersen combo therapy for CML, is it still being considered?.

What we did -- that's a good question, Yi. CML is -- there's a lot of flux in that treatment. Now, our drug works very well in accelerated and blast crisis. We've gone through two amendments to expand the trial for enrollment.

And the issue is that advances in TKI treatments have just continued to extend the period upon which patients remain in the chronic phase. So, what we had done is engaged the CRO that was on that study to go out and evaluate 15 sites. And so, we are pulling the results.

The evaluation being, of course, their interest and the number of patients that they think that they can produce. So, we're not going to beat a dead horse. We'll evaluate this and it's a fact there are just not that many blast crisis, accelerated crisis patients out there. Then we'll probably take a look at just stopping it. So, it's a good question.

It's a little early. We need to go through all the results. We do have a couple of sites that were interested. But we just need to complete our evaluation of whether we want to continue with that. .

My last question is regarding the solid tumor study prexigebersen.

Do expect to start patient enrollment in first half of this year, or that's likely to occur in the second half?.

What we're doing is, again, we've got our IND in and already filed, and we had some additional -- when we did 1002 IND, we advanced our testing along to the really state-of-the-art for CMCs, and so the FDA had wanted us to apply some of that to the solid tumors of the study. Recall, that really is prexigebersen. It is dash A.

It's got some modification, minor, very minor to the final product. We engineered it so that we'd get smaller particle sizes, with the goal of wanting to enhance tumor uptake in the interior through the pore spaces, vascular pore spaces.

So, drug substance is the same, but when you make a small modification, we have to redo everything and bring it up to date. So, we're waiting on that. But by the first half, we certainly should be open, and ideally, we'll have some patients recruited in there. It's a study that's had a lot of interest from sites. So, that's the current hold up.

We're just waiting to complete a couple of tests. We need to face appropriate validations. The testing is fine, but you have to get everything proper. So, that's what we're doing..

Thank you..

You're welcome..

The next question comes from Laura Engle with Stonegate Capital Partners..

Good morning.

How are you?.

Hi, good morning..

Good morning. So, just one financial question, looking at the filing from yesterday. Y'all actually had a decrease year-over-year for your R&D line item, and with everything going on and ramping up, I had expected a little bit more than that.

Can you make any comments on the upcoming year, especially maybe first or second quarter, given the plans you've outline on today's call and things we've talked about historically? Any insight on that would be helpful..

Well, remember, we had a lot of activity going on. The issue is that the way, again, it's accounted for. This is not an approved drug yet.

So, when we finish batches, GMP batches, in the process of producing them -- and it takes a while because we call -- we have a drug substance that has its own clinical batch, and so it has its own queue and investments in it along the way, and then that becomes a raw material in our drug [ph] product.

So, we go through a period of accumulating costs in the balance sheet item, which is a holding area. It's not an inventory because it's not an approved product, so doesn't have that status, but it's a prepaid expense.

And then once the product, the final product, which includes, again, all those costs for the drug substance that was released, once that final drug product is released to the company, then it is expensed. Again, it's not an approved product, so it doesn't have inventory value. So, as soon as it's released, it's expense.

And at that time, it goes into the R&D expense. So, really what drives a lot of the R&D expense is just that cycling of when we get drug batches. Now, we certainly had things in line last year, but they had released. We've got several batches coming in that are close to being released this year. So, it's that as well.

Plus, we engage some CROs, a new CRO, and a lot of times, the payments, as you initiate new trials, can create pre-paids, which are not necessarily -- of course, are not a research expense. So, it's really, I think, cycling of things that has that effect that you see.

Anthony, any other comment?.

Yes. Just to piggyback on that, if you look on the balance sheet at our prepaid drug product for testing, you'll see that year-over-year, we actually have an increase of approximately $450,000. And so, that all right there, that's an area where you'll see an increase with all of our upcoming activities because we'll need all that drug moving forward. .

Okay. And so, in the upcoming year, we should see some of that slip through..

Correct..

Okay, that's helpful. Thank you so much..

You're very welcome..

[Operator Instructions] And I'm not showing any further questions at this time..

All right. Thank you again, everyone, for joining us. And we appreciate your continued support of Bio-Path. Have a great day..

Ladies and gentlemen, this does concludes today's presentation. You may now disconnect, and have a wonderful day..