Bio-Path Holdings, Inc. (BPTH) Q3 2020 Earnings Call Transcript

Bio-Path Holdings, Inc. (NASDAQ: BPTH) Q3 2020 earnings call dated Nov. 13, 2020

Corporate Participants:

Will O’Connor — Stern Investor Relations

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Anthony Price — Senior Vice President of Finance, Accounting & Administration

Analysts:

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

Presentation:

Operator

Good morning, ladies and gentlemen. Welcome to the Bio-Path Holdings’ Third Quarter 2020 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 — Stern Investor Relations

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company’s third quarter 2020 earnings 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 and 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 — President, Chief Executive Officer, Chief Financial Officer

Thanks, Will. Good morning everyone and thank you for joining us today. This has been an exceptional year for Bio-Path. We have achieved several significant milestones, most notably, the initiation of Stage 2 of our Phase 2 study of prexigebersen in AML, and we have done so in an unprecedented environment. While we are still managing the impact of COVID-19 on our lives and business, I’m continually impressed by our team and their ability to deftly maneuver around the challenges we’ve been presented with. As a result of their hard work, we are in a very strong corporate position as we close out 2020, and enter 2021.

I’ll begin with our lead product candidate, prexigebersen where we continue to make meaningful progress. In the third quarter, we dosed the first patient in Stage 2 of our Phase 2 of prexigebersen for the treatment of acute myeloid leukemia or AML in combination with frontline therapy decitabine and venetoclax. As we have previously reported, Phase 2 clinical development of prexigebersen in AML commenced with Stage 1 of the Phase 2 clinical trial, which was open label and treated de novo AML patients with a combination of prexigebersen and low-dose cytarabine or LDAC. The combination of prexigebersen and LDAC was shown to be safe and more efficacious to treat this class of patients than with LDAC alone.

As many of you know, there has been an evolving landscape for standard of care in AML. Despite these new therapies, there are still patients who are refractory or resistant, and those are the patients we aim to help. As standard of care evolved, we adapted our trial design to reflect these changes. Feedback from treating physicians pointed to a preference for decitabine. The recent approval of frontline therapy venetoclax provided an opportunity for adding prexigebersen to the newly approved frontline two-drug combination of venetoclax and decitabine for the treatment of previously untreated AML patients.

Prior to finalizing our plans, we performed preclinical testing in AML cancer cell lines to assess prexigebersen’s increased benefit to efficacy. Preclinical testing of prexigebersen with the frontline treatment of decitabine and venetoclax demonstrated the potential to enhance efficacy of the frontline treatment combination. In the studies four AML cancer cell lines were treated with three different combinations of decitabine, venetoclax and prexigebersen. Decrease in AML cell viability was the primary measure of efficacy. The triple combination of decitabine, venetoclax and prexigebersen showed significant improvement in efficacy in three of the four AML cell lines. Based on these results, we believe that adding prexigebersen to the treatment combination of decitabine and venetoclax could lead to improved efficacy in AML patients.

The amended Stage 2 of this Phase 2 trial in AML is an open label Phase 2 two-stage multicenter study of prexigebersen in combination with decitabine and venetoclax in two 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 two-drug combination of prexigebersen and decitabine.

The full trial design plans have approximately 54 evaluable patients for the cohort treating relapsed refractory AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax, and the cohort treating AML patients who are venetoclax-resistant or intolerant with the two-drug combination of prexigebersen and decitabine with a review of both cohorts performed after 19 evaluable patients.

The full trial design plans have approximately 98 evaluable patients for the cohort treating untreated AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax with a preliminary review for the cohort performed after 19 evaluable patients and a formal interim analysis after 38 evaluable patients. The higher number of patients in the full trial design for the untreated AML patients cohort is due to the higher baseline response of the frontline therapy with previously untreated AML patients. The primary endpoint for this study will be the number of patients who achieved complete remission, which includes complete remission with incomplete hematologic recovery and complete remission with partial hematologic recovery.

An interim analysis will be performed on each cohort to assess the safety and efficacy of the treatment. In the event, these results exceed the primary endpoint in a number of patients that meets or exceeds statistically-determined thresholds, we plan to seek to convert the trial into a registration trial for accelerated approval.

In October, we announced that the United States Patent and Trademark Office issued a notice of allowance for claims related to prexigebersen in combination with either cytidine analogue, such as decitabine or Bcr-Abl tyrosine kinase inhibitors, dasatinib and nilotinib. The addition further strengthens our intellectual property portfolio and complements already granted patents. Our growing patent estate continues to be a valuable asset for Bio-Path as it provides protection not only for our core product portfolio and research efforts, but now also offers broad protection in combination with established frontline therapies. This new patent protects the unique therapy combination and supports our ongoing investment in this program to bring a new treatment option to patients with AML who have limited treatment options.

Next, I’d like to turn to our planned Phase 1 clinical trial of prexigebersen-A in patients with advanced solid tumors, including ovarian, uterine, pancreatic and hormone refractory breast cancer. Prexigebersen-A a fourth Bio-Path drug candidate is a modified product from prexigebersen sharing the same drug substance with enhanced nanoparticle properties. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen-A in solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that prexigebersen-A may provide clinical benefit for such patients. We filed an Investigational New Drug Application or IND and remain on track to open this study by year-end.

Turning now to plans for BP1002, our second therapeutic candidate, which targets Bcl-2. Last year, we filed an IND application for our second pipeline candidate BP1002. Venetoclax has also shown activity against anti-apoptotic protein Bcl-2 and works by neutralizing the proteins BH3 domain. It is an approved treatment for Chronic Lymphocytic Leukemia or CLL patients and untreated AML patients. However, with the exception of some patients treated with allogeneic hematopoietic cell transplantation, disease relapse invariably occurs oftentimes due to BH3 domain mutation over time. BP1002 also targets the 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 that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatments.

In 2019, the FDA granted us IND clearance to study BP1002 as a potential treatment for CLL, including venetoclax relapses and lymphoma. We plan to file an IND to treat AML venetoclax relapses with BP1002. The planned modification of our Phase 2 clinical program in AML to include venetoclax combination treatment with prexigebersen will give us early experience with treating Bcl-2-driven anti-apoptosis in these patients. We expect to begin our first in-human study of BP1002 in lymphoma CLL in the coming weeks.

Finally, let me briefly review the progress we’ve made with our third drug candidate BP1003, which targets the STAT3 protein. This program has shown promising preclinical data and we are very excited for the future of this program. We are studying BP1003 for the treatment of pancreatic cancer in a patient-derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments.

The potential for our STAT3 program is compelling for a number of reasons. Signal Transduction and Activator of Transcription-3 or STAT3, though typically inactive in normal cells is aberrantly active in cancer cells. The abilities of tumor cells to proliferate uncontrollably resist apoptosis or cell death to induce vascular transformation and invade distant organs are well recognized hallmarks of cancer. STAT3 is a regulator of the genes involved in these cancer processes.

Most recently, the capability of tumors to invade immune surveillance and avoid destruction by the immune system has gained significant acceptance in the cancer research field. STAT3, which is a point of convergence for many oncogenic pathways, has emerged as a critical mediator of tumor immune invasion at multiple levels.

We are particularly excited to launch our first in-human validation of this cutting-edge therapy in especially challenging cancer indications that has limited treatment options. Moving forward, we are undertaking IND-enabling studies for BP1003 this year with a goal to file an IND application with this very promising product candidate in 2021.

With that, I’ll now turn the program over to Anthony Price for a brief review of our third quarter 2020 financials, along with balance sheet highlights. Anthony?

Anthony Price — Senior Vice President of Finance, Accounting & Administration

Thanks, Peter. The company reported a net loss of $3.0 million or $0.80 per share for the three months ended September 30, 2020, compared to a net loss of $2.2 million or $0.78 per share for the three months ended September 30, 2019.

Research and development expenses for the three months ended September 30, 2020 increased to $2.0 million compared to $1.4 million for the three months ended September 30, 2019, primarily due to increased enrollment for our Phase 2 clinical trial of prexigebersen in AML, as well as increased preclinical study expenses.

General and administrative expenses for the three months ended September 30, 2020 increased to $1.0 million, compared to $0.9 million for the three months ended September 30, 2019, primarily due to increased franchise tax expense.

As of September 30, 2020, the company had cash of $12.1 million, compared to $20.4 million at December 31, 2019. Net cash used in operating activities for the nine months ended September 30, 2020 was $8.4 million, compared to $6.1 million for the comparable period in 2019. Subsequent to September 30, 2020, Bio-Path issued 850,000 shares of its common stock for gross proceeds of approximately $4.6 million through our at-the-market offering agreement with H.C. Wainwright.

With that, I’ll now turn the call back over to Peter.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Thanks, Anthony. Despite 2020 being a challenging year, we have made considerable progress across our programs. We look forward to continuing to enroll Stage 2 of our Phase 2 clinical trial of prexigebersen to treat AML in combination with a now current standard of care and expect to show significant safety and efficacy.

Moreover, we think the addition of prexigebersen to this regimen will be particularly important for those patients who have relapsed or are recalcitrant to venetoclax or decitabine. In addition, we look forward to initiating our first in-human Phase 1 program of BP1002 to treat advanced lymphoid malignancies, another oncologic indication that continues to elude current treatments.

Before opening the call up for questions, I’d like to take this opportunity to thank our dedicated team who have remained steadfast throughout the pandemic and who have continued to perform under these unique circumstances. The advances we have made and will make in the coming months are a testament to their perseverance and professionalism. Importantly, we thank you, our loyal shareholders for your continued support as we advance these important programs.

With that, operator, we’re ready to open the call for questions.

Questions and Answers:

Operator

[Operator Instructions] We have a question or comment from the line of Yi Chen from H.C. Wainwright, your line is open.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

Hi, this is Boobalan dialing in for Yi Chen. Can you hear me okay?

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Yes.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

Okay, thank you. Other than what is stated on your prepared remarks, can you provide additional color on the enrollment progress for the Stage 2 trial, especially we are in the midst of the rise in coronavirus cases?

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

I’m sorry, that last sentence, please? Especially in…

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

In the middle of the rise, because we are in the rise — these coronavirus cases are increasing. So I’m just curious whether it affected your enrollment progress.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Yes. Yes. Well, COVID-19 issues that we look for patient enrollment, as you know, a new — compromised patients are very susceptible to advanced problems if they contact this COVID-19, and in particular, our patients, a lot of them, they come to the institution, travel to it to receive the treatment. So to-date, our enrollment has actually been very good in this Phase 2. And so, typically, that means it’s — I think, some people see some benefit. However, as we keep — I mean, as these new cases go up, it creates a risk here and risk your environment and so I can’t tell you what it will be like over the next couple of cases — months as we get into the winter. So — but for now, we’re not seeing that effect on enrollment.

The second criteria you look for is our suppliers and the kinds of things that can happen on that is see that shift in a plant and one person gets COVID, then the whole shift is quarantined. So even though that can be cleared up in two or three weeks, of course, it can affect the backlog. So your batch being manufactured three, four weeks a month, a month and a half down the line is one thing, but the fact is everybody else does that. So you have Q effect. So that’s something else we’re going to have to keep an eye out for, particularly since, as you probably know, a big pick up in COVID cases have now been through the Midwest. So — but, so far so good.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

That’s clear. Thank you. And just to get some clarification on this. Have patients been enrolled in each of the three cohorts and do you have an estimated timeframe when you will reach the 19 evaluable patients in each cohort? Thank you.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Well, it’s just — I mean, it’s too hard to do that. I can tell you that in one of the cohorts, we have over half of our patients, and I think in another cohort we’re not far behind that. So we’re doing well. So, assuming we don’t have any catastrophes out there in the environment, we could see some interim evaluations or at least reaching our threshold next year. So — but we’ll have to wait and see. There’s just a lot of variables out there that we don’t control.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

Got it. And one final from me. So when do you plan to start the Phase 1 study for BP1002? I think I might have missed it in your remarks.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Where we — excuse me, say that again, please.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

When do you plan to start the Phase 1 study of BP1002?

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Well, it’s been — we received IND last year, provided, however, additional — they wanted some new testing. It seems the FDA always want something new. So we had to develop some new tests to validate it one time. So we were cleared on all of that and we’re open and we think you’ll hear some news on that fairly shortly.

Boobalan Pachaiyappan — H.C. Wainwright & Co — Analyst

That’s it from me. Thank you so much.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

You’re very welcome.

Operator

Thank you. I’m showing no other questions in the queue at this time. I’d like to turn the call back over to management for any closing remarks.

Peter Nielsen — President, Chief Executive Officer, Chief Financial Officer

Thank you. We thank you again for joining us and for your continued support of Bio-Path. We appreciate it very much. Have a great day.

Operator

[Operator Closing Remarks]