Ruthigen, Inc. (OTCQB:RTGN) Q2 2015 Earnings Conference Call November 13, 2014 4:30 AM ET.

Hoji Alimi - Chief Executive Officer and Chief Science Officer Sameer Harish - Chief Financial Officer.

Good afternoon and welcome to the Ruthigen Reports Fiscal Second Quarter 2015 Financial Results Conference Call. All participants will be in a listen-only mode, [Operator Instructions] After today's presentation; there will be an opportunity to ask questions [Operator Instructions] Please note this even it being recorded.

I would now like to hand the conference over to Sameer Harish. Please go ahead..

Thank you Travis. Good afternoon everyone and welcome to Ruthigen’s fiscal second quarter 2015 financial results conference call and webcast. You can listen to the open archive of this call through November 20, 2014 by calling 877-344-7529 and the domestic caller or 412-317-0088 for international callers.

The access code to access the recording is 1005-6012. Just also as a reminder a copy of our press release pertaining to the fiscal second quarter 2015 financial results is available on Form 8-K at the U.S. Securities and Exchange Commission Edgar website located at www.sec.gov and at the Company’s website located at www. Ruthigen.com.

I have a brief Forward-Looking Statements and then I’ll pass it to our CEO Hoji Alimi.

I would like to take the opportunity to remind listeners that this conference call does contain forward-looking statements, including statements with respect to expenses or loss per share, the Company's future capital needs and its ability to obtain additional funding, other financial performance, research and product development, performance, markets and regulatory filings and approvals.

These forward-looking statements maybe identified by the use of words such as expect, project, would and anticipate among others.

Although forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements may not be reliable and are subject to certain risks and uncertainties that could cause actual results to differ materially.

These results are discussed more fully in the Company's filings with the Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. So with that I would now like to turn the call over to Hoji Alimi..

Thanks Sameer. Good afternoon everyone and welcome to Ruthigen fiscal second quarter 2015 earnings conference call. I’ve planned to provide an update on this call regarding several key clinical as well R&D milestones that we completed since our last earnings call in August.

Additionally, I will discuss several upcoming clinical milestones associated with our Phase 1/2 trial and what we can expect from our team in the upcoming months.

Sameer Harish will provide the fiscal second quarter financial updates in just a few minutes, it is important for me to highlight the fact that we closed our quarter with a strong and healthy cash position of nearly $13 million. Therefore we are revising our guidance for our cash position now to take us to the end of calendar fourth quarter of 2015.

This represents and extension of one quarter for our cash runway and is the result of our ongoing review of our internal programs and expenses including those associated with our Phase 1/2 clinical trial. We continuously focus on the best ROI for every investment made and reduce and consolidate programs and expenses whenever possible.

Although Ruthigen has entered into its Phase 1 human trial this month, we have significant clinical data on the use of our active pharmaceutical ingredient hypochlorous acid.

For more than a decade I have been directly involved in its development formulation and various approvals and human trials in the united states and abroad, you sing the API but in various doses and formulations.

To-date, our active pharmaceutical ingredient had been used in more than 4 million patients for a variety of indications and on the various clearances and approvals in the world without any significant adverse event thus far.

The active pharmaceutical ingredient has been subject to numerous in vitro studies showing consistently being effective against all gram-positive, gram-negative antibiotic resistant bacteria and viruses.

If approved our RUT58-60 will be the first hypochlorous acid based drug for prophylactic use in abdominal surgeries for prevention of infection in the United States.

In regards to our ongoing Phase 1/2 clinical program, our plan includes to complete the 20th patient enrollment in the quarter-over-quarter and initiate the Phase 2 portion of the trial in early calendar Q1 of 2015 and complete full patient enrollment for the 150 patients in the study by the end of March of 20115.

this would allow us to announce data in calendar quarter two 2015 as we had previously planned. Let me add some more details and color to this. Since our last earnings call after reviewing the results of our skin irritation study in late August the Data Monitoring Committee DMC cleared Ruthigen to begin our Phase 1/2 clinical trial.

We subsequently began preparation for our Phase 1/2 clinical trial and received IRB authorizations to begin our study activities in October. Notably since these IRB approvals, we have executed seven clinical trial agreements with Principal Investigators at the number of U.S. Clinical Science including with Dr.

Al Manevitz at Memorial Hermann Memorial in Houston, Texas. Dr. Traci Hedrick at the University of Virginia and Dr. Sonia Ramamoorthy and UCSD. Please refer to clinicaltrials.gov for a more comprehensive list about clinical sites and Principal Investigators.

These sites began patient screening October and began off our first patient enrollment in early November of 2014.

Since the enrollment of our first patient we are seeing a rapid ramping patient screening activities at the sites, we have currently three patients officially enrolled as of yesterday with several more in the queue going through the screening process.

These three patients were screened and enrolled from our first enrolled in clinical site led by Minkovitz..

Additionally based on the feedback that we have received surgeons in both in our study, we're working to include laparoscopic procedures in our trial, laparoscopic procedures are less invasive and these surgeons believe that these patients constitute the majority of patients undergoing abdominal surgery at our current clinical sites.

We are preparing an amendment to our protocol that we intend to file with FDA as early as this month; this amendment can significantly accelerate the enrollment of patients planned in both the Phase 1 as well as the Phase 2 of the study.

Our surgeons are very excited about the prospects of enrolling patients having laparoscopic procedure, the [combination] of inclusion of laparoscopic procedure real-time entry and analysis and site familiarity with our protocol gives us the confidence that we can advance schedule to announce clinical data in calendar 2015 as previously mentioned.

It is important to highlight that only the safe data pertaining these 20 patients will be reviewed by DMC to satisfy the Phase 1 portion of the trial. Moving on to our manufacturing system, we are actively planning and preparing for our first pivotal trial for RUT58-60, currently planned to be initiated in mid to late 2015.

clinical material intended for use in pivotal trials must meet more regular cGMP requirements. Therefore we have signed an agreement with our contract manufacturing organization CML which is then AA rates cGMP Certified facility located in San Diego, California.

We plan to utilize the CML for the production of the clinical samples required for our first pivotal trial which is scheduled for mid to late calendar 2015. We are on pace to establish our manufacturing line at the CML before the end of the year, without accomplishing this milestone we couldn’t progress passed our current trial.

So I’m very excited and proud of our team, the technology transfer represent a major milestone for Ruthigen and important to maintain FDA compliance and readiness for us to move into our first pivotal trial U.S. next year.

We're also excited about the additional research and development programs that are currently underway; these programs open Ruthigen to new fields of therapy that RUT58-60 does not address. We plan to host an Analyst Day in 2015 to announce the development of at least one program and to discuss potential [pre-IND] requirements and milestones.

In summary, our team is working hard to advance not only our clinical program, but to diversify Ruthigen’s asset, we believe will make it stronger to diversify our R&D programs and improve the potential ROI for the company. From here, I hand the phone to Sameer Harish..

Thank you Hoji. At the end of our fiscal second quarter 2014 which ended on September 30, Ruthigen had $12.9 million in cash as compared to $14.3 million at the end of our fiscal first quarter ending on June 30, 2014 and $15.6 million in cash at the end of fiscal year ending March 31, 2014.

Our cash spend will vary from quarter-to-quarter depending on the timing of certain R&D and other expenses, in particular expenses related to our clinical trial in each of outside consultants. At the same time the company has made a concerted effort to control our cash spend through careful expense control, to extend the timing of certain expenses.

Our use of cash is expected to increase during our fiscal third quarter ending December 31, 2014 due to increased R&D expense expectations tied to activities associated with our Phase 1/2 clinical for RUT58-60 and other research and development programs.

With our revised outlook, we now expect our cash to fund our operations through the quarter ending December 31, 2015. Research and development expenses for the second quarter 2015, were $0.6 million compared to $0.5 million for the same period in fiscal 2014.

R&D expenses for the six months ending September 30, 2014 were $1.3 million compared to $0.7 million for the same period in fiscal 2014.

The increases in R&D expenses were primarily a result of the commencement of Ruthigen’s clinical research operations and preparations for the company’s Phase 1/2 clinical trial, as well as higher personnel related cost.

Selling general and administrative expenses during the fiscal second quarter of 2015 were $1.1 million compared to $0.5 million for the same period in fiscal 2014. the SG&A expenses for the six months ending September 30, 2014 were $2.1 million compared to $0.8 million for the same period in fiscal 2014.

the increases in SG&A expense were a primary result of higher legal accounting and other professional activities associated with being a public company and the inclusion of stock compensation expenses in fiscal 2015, for which there were none to report in fiscal 2014.

Total operating expenses for the quarter $1.7 million compared to $1.0 million in the same period in fiscal 2014. Total stock based compensation expenses during the fiscal second quarter 2015 were $312,000.

Total net loss in 2015 fiscal second quarter was approximately $1.7 million or a loss of approximately $0.35 per share and this compared to approximately $1.0 million or $0.50 per share for the same period fiscal 2014.

total net loss for the six months ending September 30, 2014 was approximately $3.4 million or a loss of $0.72 per share compared to approximately $1.5 million or a loss of $0.74 per share for the same period in fiscal 2014. All right, thank you and I would now like to turn the call over to the operator to begin our question-and-answer session..

Thank you [Operator Instructions] At this time, we're showing now questions over the phone. Still no question for this time, Sir you may if you had any closing remarks..

Well I just want to thank everyone for attending our conference call. We definitely look forward to announcing the completion of our Phase 1b [initiation] of our phase trial, which I think is going to significant being [indiscernible] for our company.

And we will speak to you on our next earnings call in early February and again I want to thank everyone for participating on this call. Thank you so much, have a wonderful afternoon..

Thank you. The conference has now concluded. Thank you for your participation. You may now disconnect your lines..