Bio-Path Holdings, Inc. (NASDAQ:BPTH) Q2 2023 Earnings Call Transcript

Bio-Path Holdings, Inc. (NASDAQ:BPTH) Q2 2023 Earnings Call Transcript August 15, 2023

Bio-Path Holdings, Inc. misses on earnings expectations. Reported EPS is $-0.53 EPS, expectations were $0.44.

Operator: Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings Second Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Will O’Connor of Stern Investor Relations. Please proceed.

Will O’Connor: Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company’s second quarter 2023 financial 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, 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.

Peter Nielsen: Thanks, Will. Good morning, everyone, and thank you for joining us. We continue to make tremendous progress throughout the first half of 2023. And in recent weeks, as highlighted by the compelling interim results from Stage 2 of our Phase II study of prexigebersen as a treatment for acute myeloid leukemia in blood cancer, for which there are limited treatment options and for which the prognosis is grave. The data showed prexigebersen demonstrating meaningful clinical improvement with a tolerable safety profile in these high-risk patients. On the strength of these data, we now plan to file for regulatory designations that may accelerate the pathway for bringing this potentially life expanding therapy to patients battling this deadly hematologic cancer.

Beyond prexigebersen, we continue to advance our robust clinical development program across a number of important programs that leverage our innovative DNAbilize platform technology to deliver RNAi nanoparticle therapeutics directly to cancer cells. We are forging a new path in DNA-powered medicine that we believe will give patients a fighting chance to beat these difficult-to-treat cancers. I’ll begin with the progress we have made with our lead product candidate, prexigebersen. As I mentioned, we recently announced positive interim results from Stage 2 of our Phase II clinical trial of prexigebersen for treatment of acute myeloid leukemia, or AML, in combination with frontline therapy decitabine and venetoclax. The amended Stage 2 of the Phase II trial in AML is an open-label 2-stage multi-center study of prexigebersen in combination with decitabine and venetoclax in 2 cohorts of patients with previously untreated AML and relapsed resistant AML.

A third cohort includes treating relapsed resistant AML patients who are venetoclax resistant or intolerant with the 2-drug combination of prexigebersen and decitabine. The primary endpoint for this study will be the number of patients who achieve complete remission, which includes complete remission with incomplete hematologic recovery and complete remission with partial hematology recovery. 14 newly diagnosed patients were evaluable in Cohort 1 and treated with at least 1 cycle of prexigebersen, decitabine and venetoclax combination therapy. All patients in this cohort were adverse risk by 2017 European LeukemiaNet or ELN guidelines or secondary AML. Prexigebersen was well tolerated, and adverse events were generally consistent with decitabine and venetoclax treatment and/or AML.

12 of the 14 evaluable patients or 86% achieved complete remission and 2 or 14% achieved partial remission, or PR. In total, 100% of the evaluable patients had a response to treatment. The complete remission rate of 86% for the evaluable patients in Cohort 1 is significantly higher than complete remission rates of 62% for newly diagnosed patients treated with frontline combination treatment of decitabine and venetoclax. This result is further highlighted by the high-risk rating of our Cohort 1 evaluable patients and the inclusion of secondary AML patients, both of which are classes of patients, which are difficult to treat. 14 refractory/relapsed evaluable AML patients in Cohort 2 were treated with at least 1 cycle of prexigebersen, decitabine and venetoclax combination therapy.

All patients in this cohort were adverse risk by 2017 ELN guidelines or secondary AML. Prexigebersen was well tolerated in AEs were generally consistent with decitabine and venetoclax treatment and/or for AML. 8 of the 14 evaluable patients or 57% achieved complete remission, 2 patients or 14% achieved partial remission and 3 patients or 22% achieved stable disease. In total, 93% of the evaluable patients had a response to treatment. The complete remission rate of 57% for the evaluable refractory and relapsed patients in Cohort 2 is significantly higher than complete remission rate of 21% for refractory/relapsed patients treated with the combination treatment of decitabine and venetoclax as with newly diagnosed patients in Cohort 1. This result is further highlighted by the high-risk rating of Bio-Path’s Cohort 2 evaluable patients and the inclusion of secondary AML patients.

Efficacy data for the initial interim analysis of Cohort 1 and 2 are compelling and show that prexigebersen-based combination therapy was not only safely administered in Cohort 1 and Cohort 2 to high-risk, newly diagnosed and refractory/relapsed AML patients considered suitable for standard chemotherapy, but also demonstrated efficacy signals significantly better than current therapies. This is particularly encouraging as refractory/relapsed patients for a challenging population in which current treatment options are suboptimal. As a result of the interim review, we have demonstrated the superiority of prexigebersen combination therapy in treating AML patients and currently plan to pursue U.S. Food and Drug Administration, or FDA, expedited programs for fast track and breakthrough therapy designations.

Fast track designation is designed to expedite the development and review of drugs to treat serious conditions and to fulfill an unmet medical need. Breakthrough therapy designation is a process designed to expedite the development and review of drugs that may demonstrate substantial improvement over available therapies. We look forward to keeping you apprised on our progress on the regulatory front. Turning now to our BP1002 program, which targets Bcl-2. As you know, Bcl-2 is responsible for driving cell survival in up to 60% of all cancers. High expression of Bcl-2 has been correlated with poor prognosis for patients diagnosed with AML. Venetoclax has shown activity against the anti-apoptotic 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 mutation over time. BP1002 also treats 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 BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatment. A total of 6 evaluable patients will be treated with BP1002 monotherapy in a standard 3+3 design with a starting dose of 20-milligram per square meter. The approved treatment cycle is 2 doses per week over 4 weeks, resulting in 8 doses administered over 28 days.

The Phase Ib portion of the study will commence after completion of BP1002 monotherapy cohorts, and we’ll assess the safety and efficacy of BP1002 in combination with decitabine in refractory/relapsed AML patients. We expect completion of the cohorts — initial cohorts in the next few months. Next, let’s turn to our Phase IIb clinical trial of BP1001-A in patients with solid tumors, including ovarian, endometrial, pancreatic and triple-negative breast cancer, some of the most challenging cancers to treat with today’s therapeutic toolkit. BP1001-A is a modified product from prexigebersen sharing the same drug substance with enhanced nanoparticle properties. This trial is being conducted at several leading cancer centers and will initially evaluate the safety of solid tumor patients.

Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that we may provide clinical benefit for such patients. We have completed Cohort 1 and had advanced to Cohort 2 of the study. Finally, let’s review the progress we’ve made with BP1003, which targets the STAT3 protein. STAT3 is a transcription factor that regulates various tumorigenic processes, such as tumor proliferation, metastasis and drug resistance. It’s overexpression and aberrant activation characterized many cancers including breast, lung, ovarian, liver and colon cancer. Activation of the STAT3 pathway in breast and ovarian cancers promotes tumor initiation, migration and taxol all resistance. STAT3 also promotes 5-FU resistance in colorectal cancer cells.

Its role in numerous malignancies make STAT3 a potential cancer therapeutic target. BP1003 is a novel liposome-incorporated STAT3 antisense oligodeoxynucleotide that effectively reduces statutory expression and enhances the sensitivity of breast and ovarian cancer cells to taxol and 5-FU. These results are in line with previous work in which BP1003 plus gemcitabine displayed enhanced antitumor activity in pancreatic ductal adenocarcinoma. Together, these results strongly suggest that BP1003 combination therapy is a novel strategy for patients with advanced solid tumors. 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.

With that, I’ll now turn the program over to Anthony Price for a brief review of our financials along with balance sheet highlights. Anthony?

Anthony Price: Thanks, Peter. The company reported a net loss of $4.2 million or $0.53 per share for the 3 months ended June 30, 2023, compared to a net loss of $3.0 million or $0.42 per share for the 3 months ended June 30, 2022. Research and development expense for the 3 months ended June 30, 2023, increased to $3.1 million compared to $1.9 million for the 3 months ended June 30, 2022, primarily due to manufacturing expenses related to drug product releases during the second quarter of 2023 and increased patient enrollment related to our Phase II clinical trial for prexigebersen in AML. General and administrative expense for both the 3 months ended June 30, 2023, and June 30, 2022, was $1.2 million. As of June 30, 2023, the company had cash of $3.4 million compared to $10.4 million as of December 31, 2022.

Net cash used in operating activities for the 6 months ended June 30, 2023, was $6.9 million compared to $6.7 million for the comparable period in 2022. With that, I’ll now turn the call back over to Peter.

Peter Nielsen: Thanks, Anthony. As you can see, we have made meaningful progress and the encouraging interim data from our prexigebersen study compel us to advance this study as quickly as possible and to file for regulatory designations that could accelerate our path to approval. While these are challenging financial markets, we strengthened our balance sheet in order to have the funds needed to bring these important programs to fruition because there is no greater challenge than the battle against these deadly cancers. This is what drives us every day. These positive interim results give us further confidence that our DNAbilize platform is ushering in a new path in DNA-powered medicine that can make a difference in the lives of these patients. With that, operator, we’re ready to open the call for questions.

Q&A Session

Operator: [Operator Instructions] And our first question here will come from Jonathan Aschoff with ROTH MKM.

Jonathan Aschoff: I was curious about the cash runway. If you can give us a little guidance on that. It looks like you have $5.1 million.

Peter Nielsen: Yes, we had [$3.7 million] reported end of June. We did a small raise at the beginning of August. So we’ve got cash on hand that can take us out through the fourth quarter. There will be a slowdown in things because we have to — on our Phase II, for example, where we’ve had a lot of activity. We’re at the point now where we have to pause and communicate with the FDA. We also want to get our expedited filings in place. So clearly, we’ll need to raise more cash. And as we step up after we come out of what hopefully regulatory pathways we have moving forward to speed us up. So we’ve got cash to operate. These are tough times. We’re a pretty darn good story, and we’re ready for co-development at this point. We’re going to go to ASH. We’re — we’ve got a molecular biomarker program that will go with our program that makes it more efficient. So we have a very good story to tell, and we’ll get the funds that we need to ramp up.

Jonathan Aschoff: So would you expect a further contraction in the second half of the year for R&D spend or pretty much a flattening of both operating expenses?

Peter Nielsen: That’s a good insight on the R&D. It was a big number, but it’s because, as we talked about, we were — we needed to build up supply of drug vials, and we have a tremendous amount again, to refresh for everyone. Our drug is not approved. So therefore, once it’s completed, it resides and prepaid expense. And then once it’s released to us, it’s not an approved product. So therefore, it has no value, and it drops to the expense line. And so we’ve had such big numbers because we have really built up a supply of drug vials who will support principally our Phase II. So the answer to your — yes.

Jonathan Aschoff: So would it make sense that the R&D would drop closer to $2 million than it’s currently — it’s very close to $3 million? You think that would come materially closer to $2 million a quarter for the next couple of quarters than the current $3 million, is that accurate?

Peter Nielsen: Yes, it’s going to drop. So we don’t have any major drug delivery programs that we have to support here in the near term. So we’re pretty much set with that now.

Jonathan Aschoff: Okay. And I think I’d ask you about the drugs, but you did a very good job in early August, I think, going through the current state of everything that you had that seemed pretty complete. So you’ve achieved that — yes?

Peter Nielsen: You’ll be pleased to know that I think we mentioned in the last quarter, that we had 2 new sites coming in on our lymphoma BP1002. And they’re ready now. And in fact, I think we roll the patient from — that would be our third patient in that cohort, which would get us off of that first dose cohort. So those programs are starting to kick in. The AML part of 1002 on is also — we’ve had 3x the third patient. Those are very sick people as you recall, they’re coming off venetoclax, and they have a very short survival. But we have one now that’s been dose and hopefully, that will make the last one for that first dose cohort.

Jonathan Aschoff: Right. And that gets them out of 20 and puts them into what was the next dose? Was it — what was it for 0002?

Peter Nielsen: Yes. 20, 40, 60, 90.

Jonathan Aschoff: 40, right.

Operator: And with that, we will conclude our question-and-answer session. I’d like to turn the conference back over to Peter Nielsen for any closing remarks.

Peter Nielsen: Thank you, operator. Well, thank you again, everyone, for joining us and for your continued support of Bio-Path. Have a great day. Thank you.

Operator: The conference has now concluded. Thank you very much for attending today’s presentation. You may now disconnect your lines.