Theriva Biologics, Inc. (NYSE:TOVX) Q4 2023 Earnings Call Transcript

Theriva Biologics, Inc. (NYSE:TOVX) Q4 2023 Earnings Call Transcript March 25, 2024

Theriva Biologics, Inc. beats earnings expectations. Reported EPS is $-0.34, expectations were $-0.41. Theriva Biologics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the Theriva Biologics Full-Year 2023 Investor Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Chris Calabrese with LifeSci Advisors. Thank you, you may begin.

Chris Calabrese: Thank you, operator, and good morning, everyone. Welcome to Theriva Biologics full-year of 2023 investor conference call. Leading the call today will be Steven Shallcross, Chief Executive and Chief Financial Officer of Theriva Biologics. Dr. Manel Cascallo, General Director of Theriva Biologics, European subsidiary and Dr. Vince Wacher, Head of Corporate and Product Development of Theriva Biologics, are also on the call and will be available to answer questions during the Q&A session. Theriva Biologics issued a press release this morning which provided operational highlights and included the financial results for the full-year ending December 31, 2023. The press release can be found in the Investors section of the company website at www.therivabio.com together with the annual report on Form 10-K for full-year ended December 31, 2023, which we plan to file today with the Securities and Exchange Commission.

In addition to the phone line, this call is being streamed live via webcast, which will be archived on the company website www.therivabio.com for 90-days. During this call, certain forward-looking statements regarding Theriva Biologics and DCN Biosciences’ current expectations and projections about future events will be made. Generally, the 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 upon current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, including those set forth in Theriva 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 Theriva 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 Steve. Steve?

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Steven Shallcross: Thank you, Chris, and good morning. I appreciate everyone for taking the time to join us today. In 2023, we continue to make steady progress to drive forward our oncology focused portfolio designed to address unmet needs for difficult to treat cancers. Our primary efforts and resources are focused on pursuing multiple therapeutic opportunities for our lead clinical candidate VCN-01. As a reminder VCN-01 is a systemically administered oncolytic adenovirus designed to selectively replicate within the tumor, degrade the tumor matrix, and increase tumor immunogenicity. We believe these multiple modes of action position VCN-01 for optimized tumor killing in combination with chemotherapy and immuno-oncology products in otherwise refractory solid tumors.

We have shown that repeated systemic dosing of VCN-01 is feasible from a safety perspective, and we can now focus on whether the repeated dose VCN-01 regimen may lead to improve clinical outcomes for patients. Beyond VCN-01, we are pursuing new oncolytic virus candidates to leverage our novel Albumin Shield Technology, which is designed to protect systemically administered oncolytic viruses from the host immune system and may facilitate more frequent repeated administration of oncolytic virus therapies. This may enable our pipeline of products to be used in standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy. Additionally, as part of our oncology folks portfolio, we continue to screen and enroll patients in a second cohort for the Phase 1b/2a clinical trial of SYN-004, designed to prevent potentially fatal adverse outcomes in patients who undergo allogeneic hematopoietic cell transplant HCT, to treat hematologic cancers.

With our cash runway into the first quarter of 2025, we believe we’re well positioned to execute on our corporate objectives and remain on track to achieving multiple value enhancing milestones. With this brief introduction, I’d like to expand on key pipeline updates, starting with our lead program VCN-01. VCN-01 has been administered to more than 100 patients across diverse indications, which speaks to the broad therapeutic potential, including Pancreatic Ductal Adenocarcinoma or PDAC, retinal blastoma, head and neck squamous cell carcinoma, colorectal cancer, and ovarian cancer. VCN-01 has been granted orphan drug designation in the U.S. and Europe for the treatment of pancreatic cancer and in the U.S. for retinal blastoma, providing additional opportunities for regulatory engagement and, if approved, market exclusivity.

Our most advanced program for VCN-01 is in PDAC, for which incidence continues to rise in an indication that has one of the lowest survival rates among all cancers. It is well established that the PDAC tumor matrix is one of the key reasons for the overall poor therapeutic outcomes for these patients. We believe VCN-01s differentiated mechanism of action has the potential to address the urgent need for new treatment options for patients with PDAC by degrading the [tupermatrix] (ph) and increasing tumor access by co-administering cancer therapies. We are pleased to report that dosing is well underway for VIRAGE, our Phase 2b trial of VCN-01, in combination with standard-of-care chemotherapy, gemcitabine and nab-paclitaxel, which is being evaluated as a first line therapy for patients with PDAC.

With six sites open in the U.S. and nine sites open in Spain, VIRAGE remains on track to complete enrollment in the first-half of 2024. In the first quarter of 2024, we completed the first safety review with the Independent Data Monitoring Committee or IDMC. With a positive recommendation from the IDMC, VIRAGE will continue to enroll patients without any changes to the protocol. Notably, intravenous VCN-01 has been well tolerated and demonstrated a safety profile consistent with prior clinical trials. Importantly, no additional toxicities were observed in patients receiving a second dose of VCN-01, providing the first clinical evidence of the feasibility of repeated systemic dosing. As a reminder, primary endpoints for the VIRAGE trial include overall survival and VCN-01 safety and tolerability.

Additional endpoints include progression-free survival, objective response rate, measures of VCN-01 by a distribution, replication, immune response, and measures of the quality of life of treated patients. Since this is an open-label trial, progress will be monitored very closely and steps to accelerate the clinical program may be implemented, if supported by emerging data. More broadly, the VIRAGE trial will enable us to determine the feasibility of repeated dosing of VCN-01. This could shift the approach to standardized treatment cycles that are well established in cancer chemotherapy and immunotherapy and may lead to improved clinical outcomes for patients with PDAC and other difficult-to-treat solid tumors. In addition to advancing the VIRAGE, PDAC trial, we continue to work closely with key opinion leaders in the U.S., Europe, and Central and South America, as well as with regulatory agencies to refine our clinical strategy in retinal blastoma.

We believe intravitreal VCN-01 has the potential to treat vitreous seeds in children with retinal blastoma. Since current clinical practice varies and there is no regulatory guidance specific to retinal blastoma drug development, we held a pre-IND meeting with the FDA in the fourth quarter of 2023 to discuss the development pathway for VCN-01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. During our meeting with the FDA, we were provided some guidance on the potential endpoints in patient population for an advanced clinical trial and encouraged to submit a formal protocol under a U.S. IND in order to provide a more detailed commentary for this program. We are encouraged by interactions with the FDA and look forward to driving this program forward.

In parallel with company-sponsored studies, the potential utility of VCN-01 is being explored in a number of investigator-sponsored studies that are underway it’s leading oncology research institutions around the world. Notably, collaborators at Sant Joan de Déu have completed patient treatments in the Phase 1 investigator-sponsored trial evaluating the safety and activity of intravitreal VCN-01 in pediatric patients with refractory retinal blastoma. The trial evaluated escalating doses of VCN-01 administered by two intravitreal injections separated by 14-days and remains on track to complete patient follow-up in the first-half of 2024, which will help to inform the planned Phase 2 trial design and the protocol. As a reminder, preclinical data have shown that topotecan treatment enhanced VCN-01 oncolytic activity against retinal blastoma and more broadly reinforced VCN-01’s possibility as an adjunct to intravitreal chemotherapy in patients who fail currently available treatments.

We remain encouraged by the potential of this novel combination approach to provide superior clinical benefits for children with this devastating cancer. Additionally, the University of Pennsylvania continues to enroll and treat patients in their Phase 1 investigator-sponsored trial administering VCN-01 with huCART-meso cells to patients with ovarian or pancreatic cancers. VCN-01 is designed to increase tumor immunogenicity and improve access by additional therapies such as huCART-meso cells. While cell-based immunotherapies have had limited efficacy against cell-led tumors to-date, we are encouraged by initial results highlighting the feasibility of administering VCN-01 with this type of CAR-T therapy. These preliminary results were presented last year at the Society for Immunotherapy of Cancer Annual Meeting or SITC.

The UPenn investigators are continuing to explore the optimal dosing regimen for VCN-01 co-administered with huCART-meso cells, and we look forward to further data from the study in 2024. Turning to our ongoing Phase 1b/2a clinical trial of Washington University, evaluating SYN-004 or ribaxamase. The trial is designed to evaluate the therapeutic potential of SYN-004 to fatal — to reduce fatal adverse events related to IV beta-lactam antibiotic use in allogeneic HCT recipients, including acute graft-versus-host-disease or AGVHD, and overgrowth and infection by pathological organisms such as C-difficile and vancomycin resistant Enterococci. The Phase 1b/2a study is designed to assess the feasibility of using SYN-004 and consists of three sequential cohorts comparing different IV beta-lactam antibiotics following conditioning therapy.

In each cohort, eight patients will receive SYN-004 and four will receive placebo. While the data remain blinded, interim analysis suggests that SYN-004 is well tolerated and was not observed in the blood samples of a majority of available patients. Our second cohort is underway and is designed to evaluate SYN-004 in combination with piperacillin and tazobactam. The trial is on track to complete enrollment in the second cohort in the second quarter of 2024. This cohort will provide important additional safety information, in particular, whether oral SYN-004 has the potential to alter IV antibiotic levels in this patient population. We look forward to sharing this data in the second-half of 2024. Overall, we are encouraged by the progress across our pipeline and the growing clinical data that underscore the promise of our systemically administered oncolytic adenovirus in key indications and combinations.

We remain focused on driving our clinical programs forward and exploring opportunities to leverage our novel Albumin Shield Technology and exciting additional technologies from our OV discovery platform. I’m confident that the company’s upcoming catalysts will provide a solid foundation for execution and value creation. Specifically, we remain on track to complete enrollment for the VIRAGE study in the first-half of 2024, complete follow-up in the Phase I Investigator Sponsored Trial evaluating the safety and activity of intravitreal VCN-01 in pediatric patients with refractory retinoblastoma in the first-half of 2024, and complete enrollment in the second cohort of our Phase 1b/2a clinical study of SYN-004 for the prevention of aGVHD in bone marrow transplant patients in the second quarter of 2024.

Now, I’d briefly turn to our financial results for the first full year ended December 31, 2023. General and administrative expenses decreases to $7.1 million for the year ended December 31 2023, from $9.9 million for the year ended December 31, 2022. This decrease of 28% is primarily comprised of the decrease in the fair value of the contingent consideration of $2.8 million, along with lower salary, investor relations, legal cost, consulting fees related to the VCN acquisition, and director and officer insurance offset by higher audit fees and other consulting fees. The charge related to stock-based compensation expense was $0.4 million for the year ended December 31, 2023, compared to $0.4 million for the year ended December 31, 2022. Research and development expenses increased to $14.3 million for the year ended December 31, 2023 from $11.7 million for the year ended December 31, 2022.

This increase of 22% is primarily the result of higher clinical trial expenses related to our VIRAGE Phase 2 clinical trial of VCN-01 in PDAC offset by lower expenses related to our Phase 1b/2a clinical trial of SYN-004 allogeneic HCT recipients, the completed Phase 1a clinical trial of SYN-020, decreased manufacturing expenses related to our Phase 1a clinical trial SYN-020 and lower other indirect costs. We anticipate research and development expense to increase as we continue enrollment in our VIRAGE Phase 2 clinical trial of VCN-01 in PDAC and our ongoing Phase 1 clinical trial in retinoblastoma, expand GMP manufacturing activities for VCN-01, and continue supporting our VCN-11 and other preclinical and discovery initiatives. Research and development expense also includes a charge related to non-cash stock-based and compensation expense of $165,000 for the year ended December 31, 2023, compared to $112,000 for the year ended December 31, 2022.

Other income was $1,442,000 for the year ended December 31, 2023, compared to other income of $471,000 for the year ended December 31, 2022. Other income for the year ended December 31, 2020 here is primarily comprised of interest income of $1,439,000 and an exchange gain of $3,000. Other income for the year ended December 31, 2022 is primarily comprised of interest income of $512,000 offset by an exchange loss of $41,000. Cash and cash equivalents total $23.2 million as of December 31, 2023, compared to $41.8 million as of December 31, 2022. We remain deeply committed to improving patient outcomes for these very hard to treat cancers. And before we conclude today’s call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to delivering on our mission.

I’d like to thank the entire three of the team, our investors, and the many people who have been supportive along the way, including our patients and their families. With that, we’re happy to take questions.

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Q&A Session

Operator: Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from James Molloy with Alliance Global Partners. Please proceed with your question.

James Molloy: Hey guys, good morning. Thank you very much for taking my questions.

Steven Shallcross: Hello, James.

James Molloy: I had a questions. Hello, Steven. And of course for you or Manel, looking across the multiple ISTs, which a very cost-efficient way of getting trials done, so excellent use of capital. Which do you guys see as sort of the most promising? I know like you love all your children, of course. But which seems like might be growing the tallest when you look at across the plethora of ISTs you guys have got underway? Thank you.

Steven Shallcross: So let me just highlight what we’ve got going on once again, and then Manel, you could talk specifically about some of the exciting fighting’s that we’ve have disclosed at various scientific conferences. So as you’re aware, we put out some incredible head and neck cancer data at ESMO last October, this is using VCN-01 in combination with checkpoint inhibitors in patients that were refractory to previous rounds of therapy. So Manel could talk a little bit about that. We’ve got the retinoblastoma program, which we’ve just concluded and now we’re in the middle of a follow-up. And then we’ve got the ongoing UPenn study, which is down to their organization trying to isolate the right dose to take forward. So we would expect to see some more data sometime this year related to the work they’re doing there. So Manel, maybe you could just highlight the important findings in those three studies that are ongoing or recently completed.

Manel Cascallo: Yes, sure, sure. So obviously, the most complete data, let’s say, it’s from the trial in head and neck that we presented at ESMO in October. As you know, this was a trial combining VCN-01 with durvalumab and in patient refractory to the action of immuno-checkpoint inhibitors in head and neck carcinoma, okay? And we have programs to presented safety data that demonstrated that VCN-01 has an acceptable safety profile when administered prior durvalumab. And in this new presentation that we conducted in October, representing data on efficacy. And we have seen that the patients treated with VCN showed an increase in response to a subset of chemotherapy treatments after progression on this trial. But specifically, we have also seen that the survival of patients has been enlarged for a number of patients.

And in fact, there’s some patients still alive more than four years after participating in the trial, which in my view is quite remarkable. Because those patients who are entering the trial has some spectrum to apply to between three or four months. And what we are seeing, obviously, it’s really impressive. And moreover, it’s not just a question of efficacy, but there’s a very good correlation between this response and the biological data that we are getting from the tumor biopsies of these patients. And in fact, we have seen down regulation of [Indiscernible]. We have been observing increasing levels of immunomarkers in the tumor biopsies. And interestingly, there was a correlation between the survival and with the CPS score a day after VCN-01 treatment.

It’s a kind of marker about the immunological status. And what looks in our biological data is that the VCN-01 treatment is changing this environment, and there’s a correlation between the magnitude of the change that we use and the survival of patients, which is, I think, exciting. Obviously, it’s already in preparation, but it’s exciting. In retinoblastoma, we have been treating more patients. We have seen some patients with a reduction in the vitreous seeds. But specifically, we have been also collecting data of combination with chemotherapy. The chemotherapy that is used in retinoblastoma, it’s Topotecan. And in this trial, we have seen — not in the clinical patients, but in preclinical work that we have done with biopsies and from human cells, we have been observing that there is a synergy between the action of VCN-01 and topotecan, which is very encouraging and opens the door for a combination approach in our Phase 2 program.

That is basically what we discussed with FDA in our meeting, okay? So basically, the data we are collecting, it’s very exciting. And in my view, it’s very exciting to see that in different indications, we can confirm the mechanism of action, and we can see initial evidence of activity in head and neck, in retinoblastoma which is also the same thing that we have observed in our Phase 1 program in pancreatic cancer. So that is quite consistent in that way.

James Molloy: Okay, great. Thank you very much for taking that. A quick follow-up on the retinoblastoma IST. When do you anticipate potentially filing an IND and starting the Phase 2/3, again, presuming the Phase 1 wraps up as you hope? And then a follow-up too on the Phase 2b VIRAGE. I know the enrollment is completing in our first-half ’24. When should we anticipate the final top line data for VIRAGE?

Steven Shallcross: So Manel, why don’t you take the first one? And then Vince, you could take the second?

Manel Cascallo: Yes. For retinoblastoma right now, we are just following the follow-up of patients, okay? As you know, in the clinical trial, you treat the patients. That part, it’s already finished. But we need to follow the patients for six months after the last dosing. So we are expecting to finish our database with date of the trial in mid-2024, probably. And after that, we need to write the [Indiscernible] and start discussing with FDA the final design of the IND. So I don’t expect to go for an IND until 2024 — ‘25, sorry, by short. Because, obviously, we need to finish some activities before submitting any IND for retinoblastoma. Vince, do you want to give some color on the pancreatic program?

Vince Wacher: Yes. Thanks, Manel. So as Steve indicated, our VIRAGE study is enrolling, and we anticipate completing our enrollment in the first-half of this year. With the patients all in, then we will be very closely monitoring the emergence of our data. And there’s two key outcomes. One, obviously, our primary endpoint is survival. We’ll be following those patients, and the longer the better from our perspective, because we want to have a good effect. So the primary endpoint data, the survival won’t read out until next year. And I can’t pick when we would like to — for that to be potentially in the second-half of the year for the long — as long as these patients keep going. We want patients on our drug to do well. In the interim, we will be looking at our data to see if there’s something that we can — around which we can build a formal interim analysis to review with the FDA and discuss next steps, how we can potentially advance our program quickly into a pivotal trial.

And as we know, as you know, we’ve got the orphan drug designation. So we’ll leverage that strategy. But again, we can’t necessarily predict the timing other than later in the year for a potential interim analysis if we choose to do one. But the overall endpoint for the primary endpoint the survival will be next year.

James Molloy: Okay, great. Thank you very much. And maybe a final couple of questions for me. On SYN-004, can you walk through sort of the end game for SYN-004? Where — so what the — which we anticipate sort of coming to a conclusion on that — on the data, sort of, the timing on that? And then can you talk a little bit about how the partnership and characterize the partnership environment currently for potentially out-licensing O2O or relating to your compounds?

Steven Shallcross: Sure. So as you know, the SYN-004 trial, a single-site study at Wash U, and those partners have been outstanding. Fortunately or unfortunately, the time it takes to enroll a trial like that is subject to the number of patients that actually meet the screening criteria, so they can be brought into the trial. We’re going to complete that trial, as I stated earlier, in relative short order. And then we’ll obviously have some disclosure around that. This cohort is pretty important because SYN-004 does degrade the combination of piperacillin and tazobactam. And obviously, we’re monitoring the data in this trial, and we want to make sure that the antibiotic is not interfered with in this more fragile patient population.

So once we have that data in hand, we’ll make a decision about whether or not we advance into the third cohort or whether or not we have enough to answer our questions that were brought to us by the FDA. And then this asset ties in more broadly to the initiatives we have underway to identify potential partners across our entire pipeline. So we’ve hired some outside advisers, one group specific to help us finding a home for SYN-004. And we’ve had engagement. And again, a lot of this has to do about when we have the data. We also have a group we’re working with an outreach to potential partners for the VCN-01 platform. And once again, we’ve had multiple engagements and interest, and we’ll continue those discussions. And once again, data is key.

We’ve also have some folks that we’re working with to try to find a home for the SYN-020 program. And again, those discussions are ongoing. I think the environment has gotten a bit better recently. I think over the last couple of years, given sort of the bear market that biotech and small and micro-cap biotech has been in has hindered a lot of discussion. But I’m more optimistic. Things seem to be picking up a little bit. And in keeping with our strategy and how we view these ongoing discussions, we’re not going to talk about specific interactions. And when we have something, obviously, we’ll make a disclosure about that.

James Molloy: Of course. Great. Thank you very much for taking the questions.

Operator: Thank you. [Operator Instructions] Mr. Shallcross, I’m not seeing any other questions at this time. I’ll turn the floor back to you for any final comments.

Steven Shallcross: Okay. Thank you, Melissa. Well, thanks again, everyone, for taking the time to join us today. I hope you sensed that we’re incredibly focused on driving all of our programs forward. We’re doing this in a way which I think we’re very good stewards with our cash and making and stretching that dollar the best we can to get as much data and as many clinical outcomes and results is possible. We’ll continue — we just ended with Jim here to evaluate our strategic options and we’ll continue to look for ways to drive additional value for our shareholders and for the long-term success of what we’re trying to do, namely delivering promising treatments for very, very difficult to treat cancers. Thanks again for joining us, and we look forward to keeping you updated on our progress.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.