Jeff Biunno - CFO Simon Allen - CEO Kenneth Cundy - Chief Scientific Officer.

Ed Arce - H.C. Wainwright & Company Clay Chase - Torrey Hills Capital.

Good afternoon, my name is Karenna and I will be your conference operator today. At this time, I would like to welcome everyone to the CohBar's Second Quarter 2018 Financial Results Investor Conference Call. All lines have been placed on mute to eliminate background noise. This call is being recorded.

Now I'd like to turn the call over to Jeff Biunno, CohBar's Chief Financial Officer. Please go ahead..

Thank you, Karenna. We would like to welcome all of you to CohBar's second quarter 2018 financial results investor conference call. Joining me on today's call is Simon Allen, CohBar's Chief Executive Officer and Kenneth Cundy, CohBar's Chief Scientific Officer.

Our financial results press release was issued earlier today and may be downloaded from our website at cohbar.com. I will begin with an overview of our second quarter financial results, followed by a business and R&D update from Simon and Ken.

Before we began, I'd like to take a moment to remind listeners that the remarks on today's conference call may include forward-looking statements within the meaning of the securities laws.

These forward-looking statements include but are not limited to statements regarding the therapeutic and commercial potential of the company's lead drug candidate CB4211 and other mitochondria based therapeutics, statements regarding ongoing and planned research and development activities, potential partnerships in our capital resources and ability to fund our operations.

Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by CohBar.

These risks and uncertainties are described in our registration statements, reports and other filings with the Securities and Exchange Commission and applicable Canadian Securities Regulators which are available on our website at cohbar.com, SEC.gov and SEDAR.com, as well as in the Safe Harbor statement included with today's press release.

You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statement.

CohBar does not undertake any obligation to update publicly or revise any forward-looking statements or information whether as a result of new information, future events or otherwise. I will now provide you with a summary of our financial results for the second quarter ended June 30, 2018 compared to the second quarter ended June 30, 2017.

Total operating expenses in Q2 2018 were $3,148,000 as compared to $1,910,000 in Q2 2017, an increase of approximately $1,238,000. Research and development expenses were $1,832,000 in Q2 2018 compared to $1,275,000 in the prior year period, an increase of approximately $557,000.

The increase in research and development expenses was primarily due to the clinical activity costs incurred during the current year quarter, an increase in stock-based compensation related to the revaluation performed at each balance sheet date for outstanding stock options issued to consultants, an increase in lab supply costs related to the research effort to define a mechanism of action of CB4211 and the expanded screening of peptides during the quarter, and an increase in accrued bonuses.

These increases were offset by a decrease in costs related to IND enabling activities due to the amount and timing of those costs incurred in the prior-year quarter. General and administrative expenses were $1,315,000 in Q2 2018 compared to $635,000 in the prior year period, an increase of approximately $680,000.

And the increase in general and administrative expenses was due to an increase in stock-based costs related to option grants made in the current year quarter, an increase in accrued bonuses, an increase in premiums for D&O and clinic insurance, and an increase in directors fees primarily due to the payments made to new directors of the current year quarter.

For the quarter ended June 30, 2018, the company reported a net loss of $3,316,000 or $0.08 per basic and diluted share compared to a net loss of $1,907,000 or $0.05 per basic and diluted share for the quarter ended June 30, 2017.

Moving to the balance sheet, as of June 30, 2018 CohBar had $28 million in cash and investments compared to $8.5 million as of December 31, 2018. As reported during the quarter, we raised approximately $22 million from our controlled equity offering and the issuance of promissory notes.

We estimate that based on our cash and investments balance as of June 30, 2018 we have sufficient capital to finance our operations into 2020. I will now turn the call over to Simon..

Thanks Jeff. Good afternoon everyone, and thanks for joining our call. It has been just 8 weeks since our annual shareholder update where Ken, Jeff and I provided a comprehensive overview of our company. Let's get right to it. CohBar had a stellar second quarter.

Let's talk about three important events that we were tracking on our last call, just 8 weeks ago. They were initiation of a Phase 1a, 1b clinical trial for CB4211, presenting new data at a major scientific conference on CB4211's molecular mechanism of action, and our perspective addition to the Russell 2000 Index.

Well, we're happy to report that all three of these important milestones have been successfully achieved.

First and as we had discussed in the past, transitioning from a preclinical to clinical stage company is a major milestone for any biotech something CohBar achieved in early July when we dosed our first subject with CB4211, an event that we guided to as mid-2018.

Secondly, we have long recognized the importance of identifying a molecular mechanism of action for CB4211. We regard CB4211's novel mechanism of action as a key differentiating feature when comparing it to other potential NASH drugs.

Through the concerted efforts of our biology team led by our VP of Biology, Kent Grindstaff we demonstrated CB4211's ability to sensitize the insulin receptor in multiple cell types.

Identifying this mechanism represents a major step forward for the program and as previously announced the data were accepted as a late breakers presentation at the 78th Scientific Sessions of the American Diabetes Association Meeting back in June.

Finally, we discussed the possibility of being added to the Russell 2000 Index and the potential opportunities that present it to raise additional capital and grow our institutional investor base. Before we get to that, Ken will provide an update on our research and development activities.

Ken?.

Thanks Simon. Let's start with our lead program CB4211 for NASH and obesity. As we announced back on July 12, we've initiated a Phase 1a, 1b clinical study designed to assess the safety, tolerability and pharmacokinetics of CB4211 and to provide an initial indication of activity in a setting relevant to NASH and obesity.

Please note that we do not plan to provide ongoing updates on the progress of this double-blind placebo control trial until we have significant unblinded data to report which is currently expected to be available in early 2019. We can however provide some more details on the design of the clinical trial at this time.

These and other details will also be made available when the trial is listed on clinicaltrials.gov in the near-term. The clinical study is a three-part Phase 1a, 1b designed as previously discussed.

The initial part of the study involves a single ascending dose or FAD evaluation of safety, tolerability and pharmacokinetics of CB4211 in healthy subjects with up to five dose levels given by subcutaneous injection. Now each of these dose levels involves a single dose to be effect in eight subjects, six on active versus two on placebo.

The second stage of the study involves a seven-day multiple ascending dose or MAD evaluation of the safety, tolerability and pharmacokinetics in healthy subjects with up to three dose levels. Each of these multiple dose levels involves seven daily doses of CB4211 administered at doses defined by the FAD phase.

Again each MAD dose level will be assessed in eight subjects with a ratio of three to one for active versus placebo. The final Phase 1b stage of the study is a single cohort of obese subjects with NAFLD intended to examine the effects of four weeks of daily dosing of CB4211 on trends in parameters relevant to NASH and obesity.

A total of 20 subjects will be enrolled in this final stage randomized one-to-one to receive active placebo using a CB4211 dose determine from the prior FAD MAD outcomes. Subjects must have at least 10% liver fat by MRI-PDFF at entry among other inclusion and exclusion criteria.

The study will assess safety, tolerability and pharmacokinetics and will look at changes in liver fat by MRI-PDFF and changes in body weight. The study also includes a significant number of biomarkers that are considered relevant to NASH progression and to the mechanism of action of the drug.

And as previously stated, we expect to have unblinded activity data on all of these parameters in early 2019. Now turning to the novel mechanism of action of CB4211. As previously announced we presented important information on the molecular mechanism of the drug at the recent American Diabetes Association Meeting in Orlando, Florida.

As a reminder, that is the largest scientific meeting in the U.S. dedicated to the topic of metabolic disease. The post of it that was presented by CohBar is now available on our website. To summarize the findings, we demonstrated the CB4211 works to enhance the effects of insulin on sales by increasing the sensitivity of the insulin receptor.

That means CB4211 allowed insulin to have greater effects on those cells than it normally would by itself. That same enhancement was shown in fat cells, in muscle cells and in liver cells. Insulin is a central regulator energy homeostasis, it's a hormone released from the pancreas. Unlike CB4211 it is also a peptide.

Insulin communicates with cells via the insulin receptor which sits on the surface of most cells in the body. The receptor regulates a number of signaling pathways that govern processes inside the cell in response to stimulation by insulin.

For example, in muscle cells the insulin receptor controls the uptake of excess glucose from the blood leading to its storage within the cell. In fat cells, insulin regulates the release of free fatty acids by inhibiting the breakdown of triglycerides.

But in subjects with impaired insulin sensitivity also referred to as insulin resistance, uncontrolled release of excess fatty acids from the fat cells in the abdomen leads to accumulation of fat in the liver.

The buildup of fatty acids in the liver exceeds its storage capacity leading to the downstream consequences of life of toxicity which are foundational events in the progression of fatty liver disease to the inflammation, liver damage and fibrosis that evolved to NASH.

So one conclusion from our studies is that CB4211 by enhancing the effects of insulin has the potential to decrease the release of free fatty acids from fat cells thereby reducing the accumulation of fat in the liver that can lead to NASH. This mechanism of action is consistent with our prior observations in cultured cells and in animal models.

It also appears to be unique among the drugs currently under investigation for NASH and appears to explain some of our previous observations of synergy with other drug mechanisms in animal models.

While this mechanism of action may not be the only one exerted by CB4211 in the body, it presents a major breakthrough in our understanding of the potential efficacy of CB4211 in the setting of NASH. The interaction with the insulin receptor also opens the door to other possible indications.

Now the last area of R&D that I’ll touch on briefly is the discovery and development of additional drug candidates beyond CB4211.

As we discussed in the past, CohBar has undertaken a systematic effort to identify all mitochondrially encoded peptides with therapeutic potential to file broadly for intellectual property coverage and to optimize the best of these peptides for potential development as therapeutics.

On having completed the recent financing round around the Russell Index, we are now in a position to ramp up our efforts on the screening and optimization of novel mitochondria based peptides.

Although we cannot project when that effort will result in the next IND candidate, we expect the increased resources now available will enable us to both broaden the range of indications we are evaluating and to accelerate the overall process.

We continue to explore potential activity across a range of age-related diseases and we look forward to sharing more data as we uncover the hidden properties of these mitochondrially encoded peptides. And with that, I'll return the call to Simon..

Thanks Ken. Let's look at the competitive landscape and market opportunity for CB4211. There is little doubt in the unmet medical need for NASH, there are currently no approved therapeutics. We also believe published estimates of the overall market opportunity is measured in the tens of billions of dollars with up to 12% of the U.S.

adult population having NASH. While we discussed the success of [indiscernible] on our last call, it is important to note that significant time and risk remain before they reach the market with the NASH drug. We continue to track this landscape.

Just last week we noted Gemphire's premature termination of the Phase 2a pediatric trial in NAFLD based on unexpected worsening of liver fat and markers of liver damage. While the field for NASH therapeutic remains lucrative and competitive, it is also fluid and segmented.

We continue to work with to [ramp] on potential partnership opportunities and monitoring the partnership landscape. There are multiple programs in development for NASH that have a diverse set of mechanisms targeting different stages of the disease.

The landscape continues to evolve with improved noninvasive diagnostics such as MRI-PDFF and new clinical trial designs. Put another way, we believe the real winners and losers have yet to be determined. We are expecting important clinical readouts from the likes or Intercept, Gilead and Allergan to further define this landscape.

A landscape where we believe CB4211 is well-positioned given its novel mechanism and unique product profile.

We continue to believe that the large unmet medical need and limited competition for obesity represents a significant additional opportunity for CB4211 given its novel mechanism of action and a substantial effects on body fat and weight loss in animal models of obesity.

While the need for safe and effective weight loss drugs remains clear, there are no such drugs that make this profile in the marketplace. We also I believe that patients and healthcare providers are becoming increasingly aware that obesity is a serious disease that requires treatment.

Left untreated, obesity dramatically increases comorbidities such as cancer, NASH and cardiovascular disease ultimately reducing healthy lifespan. Now let's turn our attention to financing and our plans for the future. As Jeff mentioned, we concluded two financings in the second quarter.

The first was the completion of our promissory note and warrant offering where we raised approximately $2 million. The second and far more impactful was a controlled equity offering that we did alongside our addition to the Russell 2000 Index. Inclusion into the Russell Index was made possible by meeting all of their requirements.

Two important ones being listed on a major U.S. exchange and having a market capitalization that placed us in the top 3000 publicly traded companies within the United States. We are also part of the very well recognized Russell 2000 Index which represents the small cap companies within this group.

We expected that are trading volumes would go up during the rebalancing period as traders and funds that track the index took positions in our company. We were able to take advantage of this opportunity by putting a controlled equity offering in place with Cantor Fitzgerald.

We were formally added to the Russell 2000 Index on June 22 and announced the successful completion of our $20 million CEO shortly thereafter. It should be noted that this capital raise was done at an average price of $9.14 a share with minimal commissions and no warrants.

Since our inception and in round numbers, CohBar has raised $56 million, spent $28 million and is now sitting on a strong cash balance of $28 million. Two important points are worth noting here.

First, is our highly efficient use of capital and becoming a clinical stage biotech that had an exciting preclinical pipeline and a family of provisional and non-provisional patent applications that cover more than 100 MDPs.

We encourage everyone to compare this productivity and efficiency to our peers many of whom have spent far more money and time without ever reaching the clinic. Secondly, we now have the largest cash balance in the history of our company.

From a one-way perspective, our cash reserves are expected to take us into 2020, a relatively long runway for a Biotech. Frankly, this comes at a critical time to CohBar.

We're now in a strong position both financially and strategically to advance CB4211 through Phase 1a, 1b and prepare for a Phase 2 program to ramp up our R&D activities to identify a second MBT candidate and to prioritize our extensive portfolio of peptides for additional development and partnership opportunities.

In summary, the second quarter of 2018 was a stellar quarter. We successfully transitioned to a clinical stage Biotech. We identified an important molecular mechanism of action for our lead drug candidate. We joined the Russell 2000 Index and we raised approximately $22 million.

We are very excited to be in the clinic with the first ever mitochondria based therapeutic, the first in a new class of drugs for potential treatment of age-related diseases. And with that, I'd like to turn it over to our operator for Q&A.

Karenna?.

[Operator Instructions] And we'll take our first question from Ed Arce with H.C. Wainwright & Company. Please go ahead..

Congrats on all of the progress and activity you had over last few months, quite a list of accomplishments given where you were just at the start of the year.

So first is, as I think about the uniqueness of your mechanism and the entry of the first class of mitochondrial candidates for NASH, I am wondering how you see CB4211 fitting in - actually as you think about combination therapies, how you see the mechanism unfolding and in the areas along the disease spectrum and also - and how they would fit with different types thinking through ultimately for combinations? Thanks..

This is Ken, it’s a good question. Obviously it's something we've been thinking about since we learned the mechanism of action for CB4211. We have in the past, as you know, shown that there is synergy between the mechanism of action for CB4211 and GLP-1 agonists in the data we presented back at AASLD.

The way we see it is, NASH will be treated by more than one drug. Ultimately once those drugs start to reach the market, there will be drugs that would be cognate towards the latter stages of NASH progression, where fibrosis is more prevalent.

I think they will also be used in combination with drugs that are addressing the etiology, the original cause of the problem, which would be the steatosis, and even with drugs that are on the market at that point for treating steatosis, their mechanism will not be this mechanism that we've identified for CB4211.

So, I think we'd be in a great position for our drug to be used in various combinations at that point. It does also open the doors, we mentioned for us to be used with other drugs in other settings where insulin sensitivity is an issue. So, this bodes well I think not just for a treatment of NASH, but for other metabolic disease condition..

And just the other question is, as you now look forward to the first clinical data early next year, and you have some cash to really progress that program forward. You did mention that you're also looking at a second potential candidate, and identifying and naming that.

Perhaps you could give a sort of more details around what you think is around the corner in terms of areas that you might target? Thanks..

Right. So, as we're going forward here, the identification of a second drug candidate may not be in the setting of NASH. We're certainly exploring a wide range of age-related diseases with our other new MDP related peptide, and we've spoken in the past about NASH obesity, type 2 diabetes, but also cancer, cardiovascular disease, and neurodegeneration.

We're not in a position yet to be able to say exactly when our second candidate will be identified. But as we said, we're in a position now with increased resources where we believe that we'll be able to accelerate the process and broaden our evaluation of those peptides.

It's not just a question of a follow on to CB4211 for NASH this is a much broader opportunity..

[Operator Instructions] We'll take our next question from [Mark Wayne] with [indiscernible]. Please go ahead..

Congratulation on your solid year, and a nice presentation today. Ken what I wanted to ask is clearly based on the Phase 1b plans you're intending toward indications of obesity and NASH or CB4211.

What I'm wondering is, would the data from Phase 1b in your view be sufficient to inform establishing a Phase 2a trial, type 2 diabetes, as it relates to next year..

Good question Mark, we would not be expecting to move in the direction of type 2 diabetes with the results from the Phase 1b alone. I think that's a question where evaluation of CB4211 in combination with other type 2 diabetes drugs is a very much in open door for us. We know that those mechanisms are synergistic.

But obviously we'll be looking at the data that comes from the Phase 1b, and there will be a lot of information, not just body weight and liver fat but also the other biomarkers.

And obviously, we'll look at those data and make decisions at that point, but I would say upfront we're not currently expecting to head in the direction of type 2 diabetes before we would pursue NASH..

[Operator Instructions] And it appears we have no further questions at this time..

Why don't we hold the line open for just another minute or two, make sure that everybody has a chance if they're considering asking a question..

Certainly, no problem at all. And we do have a question, we'll take it from Clay Chase with Torrey Hills Capital. Please go ahead..

Could you give us a little bit more information on your synergy with GLP agonists, and is that an area that you're going to pursue near term or further pursue?.

Sure Clay, this is Ken. We have presented data, you may recall this was back at the Liver Meeting - AASLD Liver Meeting last fall showing that when you combine CB4211 with liraglutide which is obviously a market leading member of the GLP-1 agonist class, we saw the two drugs together produced an effect that was greater than some of the parts.

So, that's the synergy that we refer to. And it does kind of open the possibility of that being exploited in various directions, because obviously the liraglutide is used for the treatment of type 2 diabetes, it's used for the treatment of obesity.

We would definitely be looking at that question once we have Phase 1b data in hand to decide should we pursue monotherapy in addition to combinations therapy at that point. I think, as I said, those doors are open to us at this point..

[Operator Instructions].

All right, Karenna, if there's no more questions, why don't we conclude the call?.

Certainly, no problem at all. Go ahead..

End of Q&A:.

Well, thanks very much for joining the call everybody. We look forward to catching up with you on the next one. Take care..

Once again, that does conclude today's conference. Thank you for your participation. You may now disconnect..