Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings First Quarter 2020 Earnings Conference Call. At this time, all participants are in a 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 first quarter 2020 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 Senior Vice President of Finance, Accounting and Administration, 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. Particularly during these challenging and unprecedented times, I hope this finds all of you and your families well and safe.

Despite the extensive social impact of COVID-19 pandemic, I am pleased to report that here at Bio-Path, we have taken every precaution possible to safeguard the health and safety of our employees and clinical trial participants, and that even in these difficult times, we remain on track to achieve our clinical milestones this year.

The considerable progress we made throughout 2019 continues to serve as a foundation for us to advance our clinical pipeline toward important inflection points in 2020.

As it stands now, we are continuing to advance our innovative RNAi nanoparticle programs, built on our DNAbilize platform to treat patients suffering with a variety of life threatening cancer indications. Let me begin with a review of our DNAbilize platform and its key features.

As you know, the DNAbilize platform is our proprietary antisense 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 antisense drug to be delivered to the disease cells with high uptake into the cell via incorporation into lipid layers. There's been no evidence of toxicity associated with our technology.

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

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

As a reminder, this trial is a multicenter trial that originally studied prexigebersen combination with low-dose cytarabine or LDAC in de novo patients with previously untreated AML who were not otherwise eligible for standard or high intensity chemotherapy regimens or who had 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 achieve incomplete hematologic recovery and complete remission with 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. As you may recall, last year, we presented compelling interim results from this study.

These updated interim results from stage one of our Phase II study of prexigebersen in de novo AML patients only increased our confidence in the safety and efficacy profile of prexigebersen and underscored its potential to treat AML patients.

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

We view prexigebersen as an ideal combination candidate with frontline therapy. Our aim is to add prexigebersen to 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. The amended Phase II study evaluated the safety of prexigebersen in combination with decitabine I both cohorts of patients at a dose of 60 milligram per square meter.

The study evaluated patients for a safety assessment of prexigebersen and decitabine and determined the combination to be safe in six evaluable patients. We are in the process of modifying testing of both cohorts of patients to next add venetoclax to the prexigebersen/decitabine combination treatment and test safety for the triple combination.

Once we have completed the six patient safety assessment of the prexigebersen/decitabine/venetoclax combination, the efficacy segment of this trial can commence.

It is anticipated that each cohort will include an interim assessment of 19 evaluable patients that would assess whether the treatment efficacy of the combination of prexigebersen/decitabine/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, 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 9 sites committed to the Phase II program.

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

Prexigebersen-A, a fourth Bio-Path drug candidate, is a modified product for prexigebersen sharing the same drug substance with enhanced nanoparticle properties. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen-A in solid tumor patients.

Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes. And it is our hope that prexigebersen-A 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 Bcl-2. Last year, we filed an IND application for our second pipeline candidate, BP1002. Venetoclax has also shown activity against the antiapoptotic protein, Bcl-2, and works by neutralizing the protein's BH3 domain.

It is an improved treatment for chronic lymphocytic leukemia, or CLL, patients and untreated AML patients. However, with the exception of some patients treated with stem cell transplantation, disease relapse invariably occurs oftentimes due to BH3 domain's mutation over time. BP1002 also targets the Bcl-2 protein.

However, BP1002 activity is based on blocking the Bcl-2 messenger RNA, and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatments.

In November 2019, the FDA granted us IND clearance to study BP1002 as a potential treatment for CLL, including venetoclax relapses and lymphoma. We can amend this registration to include AML relapses if those occur.

The planned modification of our Phase II clinical program in AML to include venetoclax combination treatments with prexigebersen will give us early experience with treating Bcl-2 driven antiapoptosis in these patients. We expect to begin our first in human study of BP1002 in the summer of 2020.

Most recently, this April, we presented a poster at the American Association of Cancer Research, or AACR, Annual Meeting, highlighting the planned clinical trial design for our first-in-human Phase I study of BP1002 in patients with advanced lymphoid malignancies.

The Phase I clinical trial is expected to be conducted at several leading cancer centers, including the University of Texas MD Anderson Cancer Center, the Georgia Cancer Center and the Sarah Canon Research Institute. Finally, let me review our progress with our third drug candidate, BP1003, which targets the STAT3 protein.

This program has shown promising preclinical data and we are very excited for the future of this program. 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 potential for our STAT3 program 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 resists 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 in these cancer processes.

More recently, the capability of tumors to evade human immune system 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 outcome, 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.

Our preclinical data for this program highlighted four antisense oligo sequences directed against STAT3 messenger RNA identified by Bio-Path and manufactured using DNAbilize antisense RNA nanoparticle technology.

Cell viability tests and Western blots were conducted to determine the inhibitory effects of liposome incorporated STAT3 antisense oligo on non-small cell lung cancer and 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 of less than 0.05 counted as 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 micro moles significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer patient derived xenografts by more than 30% with a p value less than point 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 anti-cancer activity was maintained for another 21 days even when drug treatment had ceased. In addition, BP1003 was selected as the most potent liposome incorporated STAT3 antisense 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. These very encouraging data were well received by the scientific community.

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

Moving forward, we are undertaking an IND-enabling study for BP1003 this year, with a goal to file an IND application with this very promising product candidate later in the year. As you can see, despite COVID-19 global pandemic, we have remained committed to driving forward our clinical development programs during this challenging time.

We continue to advance our important programs and remain committed to evaluating new opportunities to capitalize on the potential of our DNAbilize technology platform in various oncology indications. With that, I'll now turn the program over to Anthony Price for a brief review of our first quarter 2020 financials along with balance sheet highlights.

Anthony?.

Thanks, Peter. The company reported a net loss of $3.3 million or $0.90 per share for the three months ended March 31, 2020 compared to a net loss of $1.5 million or $0.89 per share for the three months ended March 31, 2019.

Research and development expenses for the three months ended March 31, 2020 increased to $2.0 million compared to $0.4 million for the three months ended March 31, 2019 primarily due to the manufacture of drug material in preparation for our Phase I clinical trial of prexigebersen-A in advanced solid tumors and increase in clinical trial expenses related to increased enrollment in our Phase II clinical trial of prexigebersen in AML and startup activities for Phase I clinical trial of BP1002 in lymphoma, as well as increased preclinical study expenses.

General and administrative expenses for three months ended March 31, 2020, increased to $1.3 million compared to $1.1 million for the three months ended March 31, 2019, primarily due to increased franchise tax expense. As of March 31 2020, the company had cash of $17.9 million compared to $20.4 million at December 31, 2019.

Net cash used in operating activities for the three months ended March 31, 2020, was $2.5 million compared to $2.0 million for the comparable period in 2019. With that, I'll now turn the call back over to Peter. .

Thanks, Anthony. As I've described on this call, we're enthusiastically looking forward to advancing each of our three clinical development programs through to value creating inflection points during this year. Each of these programs has strong clinical data underlying the potential, and each of them addresses an unmet medical need.

Before opening up to your questions, I would be remiss if I didn't acknowledge and applaud those on the frontline fighting the global COVID-19 pandemic, in particular, those nurses and physicians providing direct care for COVID-19 patients.

And as always, we greatly appreciate your support as we advance the therapeutic candidates built on our DNAbilize platform, through clinical trials and preclinical research in a number of important oncology indications that we believe will benefit cancer patients worldwide. With that, operator, we're ready to open the call for questions. .

Thank you. [Operator Instructions]. And our first question comes from Yi Chen with H.C. Wainwright. Your line is open. .

Thank you for taking my question.

My first question is, could you provide us with some color on the status of the clinical sites for the triple combination regimen? And when do you expect the initiation of the prexigebersen triple combo to start? Is it likely to occur this summer? And if it does occur, do you think the enrollment speed could be adversely affected by the ongoing COVID-19 situation? Thank you.

.

Okay. A couple things there. Evidence we have – I'm not sure when we can release it, but we have preclinical studies. I think we've talked to this a couple of times. And they do affect – indicate a very positive incremental benefit of adding prexigebersen to the venetoclax combination.

These are in cell lines in AML cancer cells and the measurement is on reducing cancer cell viability. I'm not sure when that comes out, but we'll eventually put it out. As you know, it's always what's the mechanism that we can do that. Secondly, in terms of timing, we're actually on the clock now.

We've had several nuisance changes that the FDA wanted us to do, but those guys call the shots. So, every time you do that, you got to go back and roll through the changes, through the protocol and investigator brochure, et cetera, and then resubmit and you go back on the clock.

We are at or will be within – today or early next week on the clock for 30 days and this last change was a very minor two-word change. So, I think that we may not even have to wait a full 30. So, certainly, in June we should be cleared to start. And of course, we continue to work on amendment 15.1, which is the safety of prexigebersen and decitabine.

We have patients that are continuing on that. Durability, we have two patients at MD Anderson, one's on the seventh cohort and another's on the eighth cohort. And that's pretty impressive response in durability. Did I answer all – you had three or four components to your question.

Did I get them all?.

The last component was, once the trial starts, do you think the enrollment is adversely affected?.

It's hard to tell. The people that go to the hospital for treatment, that's where we may have some slowdown because, remember, the COVID can be devastating in immune-compromised patients. So, I know we've seen one in New York that seem to be on study going well. We still have three patients down here at MD Anderson.

But it's hard to predict until we get into it. So, I think we have to anticipate there might be some slowdown in it. As you know, we're adding more sites. And we were at six. We have three more there. I think one's been added already, Georgia Cancer Center.

There's two to three more that are in the process of doing their paperwork and trying to get things finalized. So, it seems that – particularly with people working at home and whatnot, the administrative processes can be slower at the institutions, but we anticipate we could see some slow, but we certainly haven't been formally informed of that. .

Okay, thanks.

So, during the rest of 2020 and considering the impact of COVID-19, what are the potential data readouts you expect to have across prexigebersen, BP1002 and BP1003?.

Well, in prexigebersen, in the AML trial, we would start. And our first real announcing point would be 19 minutes in each cohort. And we'll do that announcement when we reach it. We don't have to have all cohorts hit 19 and then we announce. So, whether that happens quickly enough in this year, it's just hard to say. We'll keep adding patients.

The combination treatment has, again, as I said in the preclinic preclinical work, indicated a pretty impressive response. So, we'll just have to see about that. The BP1002, that's a three plus three dose escalating. So, one, maybe two that we can report on. And again, that's in CLL and lymphoma.

And in solid tumors, again, we're just on that one, waiting on completion of validation work on one particular assay. We've got a couple others to do. We know how to do, but one of them has got some validation that takes time to just do those things, to get the test confirmed to have them completed.

But we should, for sure, open that and have ideally – that's a three plus three, so ideally have one of those cohorts at least completed. The other thing then that would be good is if we can hit our goal on the IND for STAT3, BP1003. Again, that depends on completion of preclinical programs, one of which is kind of new.

One of the potential benefits of BP1003 is its effect on the immune system and surveillance. But because of that, of course, and we'll probably have a pre-FDA call on this, we anticipate that they're going to want to see the safety of that treatment and its potential effect. And this would be an in vivo study on the immune system.

So, we have quite a lot of things that can go on this year. .

Okay.

And lastly, before the patient recruitment starts, do you expect operating expenses to remain at a lower level?.

As we've talked about on calls previously, our expenses fluctuate based on – a lot of it based on drug build-up. And so, we had a lot of that activity in the second quarter – or in the first quarter. And we've just about – we'll continue to have some of that, but we've built some batches for – like, BP1002 is a new one.

We've added some more for prexigebersen just to make sure we have enough, not knowing how fast the enrollment will go. So, I think right now, with this patient level, $2 million to $3 million a quarter, it's probably the number.

If we go by the budget plan that we had, it will eventually – all three trials going, we'd probably get between $3 million and $4 million. Our financial model predicts that, by the end of the first quarter next year, we'll still have more than a quarter's worth of funds left.

So, as you've probably seen the balance sheet, we've got a pretty decent balance sheet, almost $18 million in cash as of 03/31. And we have opportunities to raise. I'd just like to be a little further along in milestones before I raise it. .

Got it. That's all for me. Thank you. .

You're welcome. .

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back to Peter for closing remarks. .

Thank you again for joining us and for your continued support of Bio-Path. Have a great day. .

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day..