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?

A patient viewing their medical diagnosis on a digital healthcare ecosystem.

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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