Kris Maly – Vice President-Corporate Communications Jeff Riley – Chief Executive Officer, President and Director Steve Shallcross – Chief Financial Officer, Treasurer and Secretary Joe Sliman – Senior Vice President-Clinical and Regulatory Affairs.
Tim Chiang – BTIG Katherine Xu – William Blair Adnan Butt – RBC Capital Markets Ed White – FBR and Company.
Presentation:.
Good afternoon and welcome to Synthetic Biologics’ 2015 Year End Investor 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 event is being recorded. I would now like to turn the conference over to Ms.
Kris Maly, Vice President of Corporate Communications at Synthetic Biologics.
Kris?.
Thank you, Diane and good afternoon, everyone. Welcome to Synthetic Biologics 2015 year-end investor conference call. Today, I’m joined by our CEO, Jeff Riley; and our CFO, Steve Shallcross. Synthetic Biologics issued a press release this afternoon which provided operational highlights and recorded 2015 year-end financial results.
The release can be found in the Investors section of our website. During our call today, Jeff, will provide an update on our microbiome-focused pipeline programs and Steve will summarize our financial highlights. We’ll take questions after our prepared remarks.
In addition to the phone line, this call is being streamed live over the internet today and the webcast replay will be archived on our website for 60 days. During this call, we will be making forward-looking statements regarding Synthetic Biologics current expectations and projections about future events.
Generally, forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions.
These statements are based on current beliefs, expectations and assumptions, and are subject to a number of risks and uncertainties, including those set forth in Synthetic Biologics filings with the SEC, many of which are difficult to predict.
No forward-looking statements can be guaranteed and actual results may differ materially from such statements.
The information on this call is provided only as of the date of this call and Synthetic Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events or otherwise, except as required by law. With that, I’d like to turn the call over to Jeff..
Thanks, Kris, and thanks everybody for joining the call today. 2015 was an exceptional year for Synthetic Biologics. We are very proud of the progress we’ve made and are exciting for the milestones that lie ahead.
Before we dive in, I’d like to provide a brief recap of the clinical achievements Synthetic Biologics has made since the beginning of the fourth quarter of last year. As a result of clinical progress in our SYN-010 program for the treatment of irritable bowel syndrome with constipation or IBS-C.
We expect to initiate Phase 3 clinical trials for SYN-010 during the second half of 2016. And we anticipate requesting an end of Phase 2 discussion meeting with the FDA during the summer of 2016.
In the clinic, we reported positive top-line data from our first Phase 2 acute study, which show that SYN-010 met its primary endpoint of lowering breath methane compared to baseline. We also reported solid top-line data from our second Phase 2 extension study, has clearly demonstrated a statistically significant decrease in methane production.
As statistically significant reduction in the mean IBS symptom severity score or IBS-SSS which includes abdominal pain, bloating, stool frequency and quality of life scores for all patients from Study 1 baseline to the end of the second Phase 2 study.
Also an increase in the percentage of patients identified as monthly responders, an FDA-defined composite measure incorporating improvements in complete spontaneous bowel movements and abdominal pain. Also there were no serious adverse events to include diarrhea that were observed during both of these trials.
We reported additional progress from our three Phase 2 trials for SYN-004, for the prevention of C. difficile infection, antibiotic-associated diarrhea and the emergence of antibiotic-resistant organisms. As a result of our clinical progress in our SYN-004 program, which I’ll outline in a moment.
We are planning to initiate a Phase 3 trial or trials in the second half of this year as well. Our Phase 2b proof-of-concept trial is ongoing, and as of today we have enrolled 98 patients into the Phase 2b study.
For the first 2a clinical trial we reported positive top-line data showing SYN-004 successfully degraded residual IV ceftriaxone in patients without affecting the intended level of ceftriaxone in the bloodstream.
We anticipate reporting top-line results in the first half of 2016, for our second Phase 2a study designed to evaluate IV antibiotic-degrading effects, and the safety of SYN-004 in the presence of the proton pump inhibitor in participants with functioning ileostomies.
We initiate a pre-clinical study with our collaborator to generate pre-clinical proof-of-concept data to evaluate the potential of SYN-005, our monoclonal antibody with orphan drug designation to prevent Pertussis or whooping cough. This study has been funded by a grant awarded from the Bill & Melinda Gates Foundation to the University of Texas.
Also we are collaborating on a novel biotherapeutic asset designed to treat PKU with ActoGeniX, a Belgium subsidiary of Intrexon Corporation, expanding our portfolio of microbiome-focused products.
Our balance sheet remains well capitalized, and we have the resources to continue to move both of our lead microbiome-focused drug candidates through Phase 2 clinical trials. As we look ahead to the initiation of Phase 3 trials for SYN-010 and SYN-004 later this year. We will need to further strengthen our balance sheet.
We are currently evaluating several capital raising strategies, which allow us to continue the progress we made during 2015. We continue to engage in partnering discussions for both microbiome-focused programs, with the aim of potentially raising non-dilutive capital for one or both of our lead drug candidates.
Now I'd like to provide an update on our two lead gut microbiome-focused clinical programs in a little bit more detail. We'll start off with SYN-010. Our SYN-010 program is addressing irritable bowel syndrome constipation.
Current treatment options including FDA approved drugs and over-the-counter laxatives treat the symptoms associated with IBS-C, but do little to treat the underlying cause of the disease. SYN-010 is intended to reduce methane production by certain microorganisms, mainly M.
smithii in the gut while minimizing disruption to the microbiome to treat the underlying cause of IBS-C and not just the symptoms. Since the beginning of the fourth quarter, we made tremendous clinical progress in our IBS-C program and achieve two significant Phase 2 milestones.
First, we completed the first Phase 2 four week acute study of SYN-010 in this Phase 2 study, 63 patients with IBS-C in a breath methane value greater than 10 parts per million at screening, were randomly assigned to receive either placebo, 21 milligram dose of SYN-010 or a 42 milligrams dose of SYN-010 orally, once-daily for 28 days.
Breath methane was measured at 7 and 28 days as compared to baseline. In December, we were pleased to report positive top-line results from this trial, which clearly demonstrated that SYN-010 lowered breath methane and improved stool frequency within dose groups at 7 or 28 days of treatment.
Patients who completed the first Phase 2 trial were eligible to complete, immediately rollover into the second Phase 2 study.
This open label, eight week extension study is designed to evaluate the sustainability effect of the higher dose strength of SYN-010 on breath methane production, as well as evaluate key clinical outcomes to include complete spontaneous bowel movements, abdominal pain, and bloating.
Of the 63 patients who completed the first Phase 2 trial, 54 elected to rollover into the extension study. All patients in the second Phase 2 trial were given a once-daily oral 42 milligram dose of SYN-010 for eight weeks.
In January, we achieved a second clinical milestone for our IBS-C program, when we announced outstanding top-line results from this study. Specifically, top-line data from all patients who completed the second Phase 2 clinical trial of SYN-010, showed a statically significant P value of 0.002.
For a decrease of methane production from the beginning of the first Phase 2 study or day one to the end of the second Phase 2 study day 84.
Most importantly, top-line data from the second Phase 2 study also showed improvements in secondary efficacy endpoints including a P value of less than 0.0001 for reduction in the mean IBS symptom severity score, which includes abdominal pain, bloating, stool frequency, and quality of life scores for all patients from study one baseline to the end of second Phase 2 study and an increase in the percentage of patients identified as monthly responders.
Again, this is an FDA-defined composite measure incorporating improvements in complete spontaneous bowel movements and abdominal pain.
I’d like to mention that the design of the secondary clinical outcomes measured in our two Phase 2 studies were based on FDA clinical guidelines of the Phase 3 regulatory approval pathway for previously approved IBS-C treatments.
Following the announcement of positive top-line data from both SYN-010 Phase 2 trials Synthetic Biologics plans to submit an end of Phase 2 meeting requests with the FDA. We anticipate meeting with the FDA this summer and initiating Phase 3 trials in the second half of this year.
Now I'm going to switch gears to SYN-004 and talk about our second gut microbiome-focused program for the prevention of C. difficile infection.
Our product candidates SYN-004 is an oral prophylactic therapy designed to degrade certain IV beta-lactam antibiotics within the GI tract to preserve the natural balance of the gut microbiome for the prevention of CDI, antibiotic-associated diarrhea and the emergence of antibiotic-resistant organisms.
During the fourth quarter, we made significant progress on all three Phase 2 clinical trials for SYN-004. I'd like to start with an update of our Phase 2b proof-of-concept clinical trial, intended to evaluate the ability of SYN-004 to prevent C. difficile infection. C.
difficile associated diarrhea and antibiotic-associated diarrhea in patients hospitalized for a lower respiratory tract infection like pneumonia and receiving at least five days of IV ceftriaxone antibiotic.
We design this trial anticipating to enroll approximately 370 patients and up to 75 global sites, and are pleased to report that at this time, enrollment is ongoing and remains on schedule. As of today, we have enrolled approximately 98 patients into the Phase 2b study. Once we have enrolled either 120 patients and confirmed 10 cases of C.
difficile infection, a blinded interim analysis will be conducted by an independent monitor committee to evaluate the baseline rate of CDI in the placebo group. We are on schedule to perform this analysis in the first half of 2016.
At the same time, we will compare the rate of antibiotic-associated diarrhea in treatment in placebo arms in order to evaluate SYN-004s ability to prevent antibiotic-associated diarrhea in patients receiving SYN-004 and IV ceftriaxone versus patients receiving placebo in IV ceftriaxone.
In the ongoing Phase 2b study an exploratory endpoint is dysbiosis. We believe SYN-004 may have the ability to prevent spread of antibiotic-resistant in the microorganisms present in the gut. Continued exposure, overuse and misuse of antibiotics causes microorganisms to develop resistance to antimicrobial agents.
Now I’d like to provide an update on our novel – our two novel Phase 2a study designed to evaluate the safety and ability of SYN-004 to degrade IV ceftriaxone in the gut alone and in the presence of the proton pump inhibitor in participants with functioning ileostomies.
These healthy volunteers have had all or part of their colon removed and are fitted with an external pouch system for waste. Therefore enabling easier sampling of intestinal kind. In the fourth quarter, we announced top-line results that demonstrated SYN-004 successfully degraded residual ceftriaxone in the GI tract of 10 healthy participants.
Evaluation of the kind from these participants demonstrated that both the 75 milligram and 150 milligram dosage strength of SYN-004 degraded residual IV ceftriaxone without affecting the intended level of the antibiotic in the bloodstream. In addition, both dosage strength of SYN-004 appeared to be well-tolerated by the participants in the study.
The second Phase 2a clinical trial for SYN-004 is currently ongoing, and is evaluating the GI antibiotic degrading effects of SYN-004 in the presence of a proton pump inhibitor. In healthy participants with functioning ileostomies.
We anticipate reporting top-line results from this trial during the first half of this year, and expect results to be consistent with findings from our first 2a study. In addition to our two lead microbiome-focused drug candidates.
I would like to briefly touch upon our growing pipeline of programs that we are also putting effort into Pertussis is our first program. It's a humanized monoclonal antibody program to target and destroy Pertussis toxin which is responsible for Pertussis or whooping cough and this continues to move forward.
In 2015, the Bill & Melinda Gates Foundation awarded a grant to our academic collaborator, University of Texas at Austin to generate preclinical proof-of-concept data to test the hypothesis that antibody administration at birth may also have a role in the prevention of Pertussis. We anticipate having pre-clinical data by the end of this year.
As a treatment, the therapeutic maybe tested in critically ill infants, with up to 300,000 babies dying annually worldwide. With Pertussis to potentially shorten disease course, mitigate complications and diminish mortality.
As a prophylactic, the therapeutic has the potential to provide protection to at-risk newborns in the developing world to protect them from Pertussis for the first few months of life. The timeframe during which the infants are at greatest risk for severe disease but are too young to be immunized using a typical vaccine strategy.
Our second earlier stage project is PKU and this is through our collaboration with Intrexon, we are pursuing a development and commercialized – commercialization of novel biotherapeutics for the treatment of patients with PKU. This is a chronic disease that can lead to profound cognitive impairment and behavioral disorders.
We anticipate going into in vivo studies by the end of this year. Now I'd like to turn the call over to our Chief Financial Officer, Steve Shallcross.
Steve?.
Thanks, Jeff. During the fourth quarter of 2015, we continue to operate efficiently and remain well positioned to execute on our plan of completing our Phase 2 clinical trials for our two lead microbiome-focused candidates.
Synthetic Biologics year-end 2015 financials were included in the press release, which was distributed over the newswire earlier this afternoon. The company's 10-K for the year ended December 31, 2015 will be filed with the SEC later this evening.
For the year ended December 31, 2015, our general and administrative expenses were $8.1 million compared to $6 million in the same period last year. Included in these numbers were non-cash charges related to stock-based compensation of $2.1 million for the year ended December 31, 2015, compared to $ 1.6 million for the year ended December 31, 2014.
Research and development expenses increased to $32.9 million for the year ended December 31, 2015. This increase of 127% was primarily the result of increased program costs associated with expanded clinical development, manufacturing and research activities within our microbiome-focused pipeline, including companies Phase 2 C.
difficile and IBS-C clinical programs. Non-cash charges related stock-based compensation were $1.1 million for the year ended December 31, 2015 compared to $803,000 for the year ended December 31, 2014. Cash and cash equivalents at December 31, 2015 were $20.8 million compared to $17.5 million at December 31, 2014.
We anticipate cash utilization in the first quarter of 2016 to decrease as cash prepayments made during 2015 are expected to be used to offset a large portion of the costs associated with these ongoing Phase 2b clinical trial for SYN-004 and the completion of our Phase 2 trials for SYN-010.
In addition to previously disclosed positive top-line data we reported for both lead microbiome-focused programs, we expect to report top-line data in second Phase 2a clinical trial for SYN-004 in the first half of 2016.
Furthermore, we expect to initiate two Phase 3 trials in the second half of the year, which we believe will further add shareholder value to our microbiome related programs. Now I’ll turn the call back over to Jeff..
Thanks, Steve. As we continue to move our lead microbiome-focused candidates through Phase 2 development and begin to plan for Phase 3 trials and commercial entry. We should be well positioned with the financial resources necessary to maintain the momentum we experienced in 2015.
Let me recap our progress from the beginning of the fourth quarter once more. For our IBS-C program, first we anticipate beginning Phase 3 clinical trials in the second half of this year. Two, we intend to submit a request for an end of Phase 2 meeting with the FDA during the summer of 2016 this year.
Three, we completed the first Phase 2 clinical trial and announced top-line data demonstrating symptom met its primary endpoint.
Four, we completed the second Phase 2 clinical trial, extension study and announced outstanding top-line results including data demonstrating that SYN-010 sustained a statistically significant reduction of breath methane and more importantly data demonstrating a statistically significant reduction in the mean IBS-SSS scores for all patients from Study 1.
And there were no serious adverse events including diarrhea, during both of these studies. Turning your attention back to C. difficile and antibiotic-associated diarrhea prevention program. We also – we anticipate initiating a Phase 3 trial or trials in the second part of this year.
Our Phase 2b proof-of-concept study is going very well and has enrolled 98 patients to-date. We announced top-line results from the first Phase 2a study, demonstrating SYN-004 successfully degraded residual IV ceftriaxone and we will announce top-line data from the second Phase 2a clinical trial, during the first half of this year.
Overall 2015 was a year filled with clinical, positive clinical milestones and we are optimistic about the potential Synthetic Biologics to address large markets and meet unmet medical needs while generating significant returns for our shareholders.
Looking forward to 2016, we believe this will be the year Synthetic Biologics completes the pivot from an early stage clinical development company to a late stage Phase 3 commercially focused company. At this time, I will turn it back over to Kris..
Thank you, Jeff. Diane, we’d like to open the phone line back to questions now.
Would you please describe the procedure to ask questions for our listeners?.
Certainly. We will now begin the question-and-answer session. [Operator Instructions] Our first question will come from Tim Chiang of BTIG. Please go ahead..
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Out next question will come from Katherine Xu of William Blair. Please go ahead..
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Okay. Our next question comes from Adnan Butt of RBC Capital Markets. Please go ahead..
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Our next question comes from Ed White of FBR and Company. Please go ahead..
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This concludes our question-and-answer session. I’d now like to turn the conference back to Jeff Riley for any closing remarks..
Thanks, Diane. Again, everybody, thank you for joining us today. With more intensive placed on the microbiome research continues to shed light on all importance of microbiome place in human health. We feel a great sense of purpose and pride and continue to develop our two lead multibillion dollar programs.
SYN-010, again to treat IBS-C and SYN-004 to treat CDI, CDAD, AAD in antibiotic resistance. As both programs continue to march toward Phase 3 clinical trials later this year. Synthetic Biologics move closer to our goal of offering novel microbiome-focused projects.
We’re proud of the progress we’ve made in 2015 becoming a clinical development stage company and we’re very excited to move into a late stage clinical development company within a next two to three years to hopefully become commercial based company. Thanks again everybody for joining our call. Have a great evening..
The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines..