Ampio Pharmaceuticals, Inc. (AMPE) on Q3 2021 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to Ampio Pharmaceuticals 2021 Third Quarter Earnings Results and Corporate Update call. We'll be the event specialist running today's event. As a reminder, this call is being recorded and all listeners will be on a listen-only mode. At this time, I would like to turn the call over to Mr. Dan Stokely, Ampio's Chief Financial Officer. Dan, please go ahead when you are ready.
Dan Stokely: Hi everyone, thank you very much and I hope everyone's having a great day. It's our pleasure for me and certain members of the executive management team to be present today. And we'd like to thank each one of you for attending our third quarter 2021 earnings and business update call. Prior to reading the Safe Harbor forward-looking statement, I would like to introduce you to the members of the executive team, who will be presenting and/or participating on the call today. First is Holli Cherevka, the company's President and Chief Operating Officer. We also have present Howard Levy, the company's Chief Medical Officer, Dr. David Bar-Or, Director and Founder and myself Dan Stokely, the Chief Financial Officer. I'd like to start out by first reading our safe harbor statement. The presentation on any follow-up responses to Q&A may contain forward-looking statements about our business. You should not place undue reliance on forward-looking statements as these statements are based upon our current expectations, forecasts, and assumptions and are subject to significant risks and uncertainties. These statements may be identified by words such as may, will, should, could, expect, intend, plan, anticipate, believe, estimate, predict, potential forecast continue or the negative of these terms or other words or terms of similar meaning. Risks and uncertainties that could cause our actual results to differ materially from those set forth in any forward-looking statements include that are not limited to the matters listed under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the Securities and Exchange Commission, as well as other risks detailed in our subsequent filings with the Securities and Exchange Commission. These reports are available at www.sec.gov. Statements and information in this presentation, including forward-looking statements speak only as of the date they are made are provided unless earlier data is indicated, and we do not undertake any obligation to publicly update any statements or information, including forward-looking statements whether as a result of new information, future events or otherwise as except as required by law. Now, I'd like to provide a financial update. I would like to discuss our financial results for the three and nine-month period ending September 30, 2021. Cash and cash equivalents totaled $17.1 million as of September 30, 2021, compared to $17.3 million on December 31, 2020. The net decrease of $0.2 million is attributable to cash required to fund the operating activities of the company totaling $10.4 million, which was partially offset by net proceeds received from the utilization of our at-the-market equity offering program and stock options last warrant exercises of $10 million and $0.2 million respectively. We recognized a net loss of $3.6 million for the three months ended September 30, 2021, or the 2021 quarter compared to a net loss of $3.4 million for the three months ended September 30, 2020, or the 2020 quarter. The net loss during the 2021 quarter was attributable to operating expenses of $3.8 million, partially offset by the non-cash derivative gain of $0.2 million. The net loss during the 2020 quarter was attributable to operating expenses of $3.3 million and the non-cash derivative loss of $0.1 million. Operating expenses increased $0.5 million for the 2021 quarter as compared to the 2020 quarter primarily due to a $0.9 million increase in research and development costs, which was driven primarily by an increase in clinical trial expense partially offset by a $0.4 million decrease in general and administrative costs, which was driven primarily a decrease in legal and commercial insurance costs. We recognized a net loss of $10.8 million for the nine months ended September 30, 2021 or the 2021 period compared to a net loss of $3.3 million for the nine months ended September 30, 2020 or the 2020 period. The net loss during the 2021 period was primarily attributable to operating expenses of $11.3 million, partially offset by non-cash derivative gain of $0.5 million. The net loss during the 2020 period was primarily attributable to operating expenses of $11.9 million partially offset by the gain realized from the PPP loan forgiveness of $0.5 million and our non-cash derivative gain of $0.1 million. The operating expenses decreased $0.6 million for the 2021 period as compared to the 2020 period due to a decrease in administrative costs. On September 30, 2021 there were $200.5 million common shares outstanding compared to approximately $193.4 million shares on December 31, 2020. The increase during the nine months ended September 30, 2021 is attributable to issuance of shares under the ATM equity offering program which approximated about $6.3 million and an average price of $1.67 of share and also warrant and stock option exercises accounted for about $0.8 million shares. And lastly, based on our current projection, which includes but not limited to access to the residual capacity under the ATM of approximately $13.3 million. Ampio expects our cash and cash equivalents, sufficient to fund research and development programs and business operations through the first quarter of 2023. And now I'll turn the call over to Holli Cherevka, Ampio's President and Chief Operating Officer, who will provide a business update on the company's clinical and research pipeline and other business matters.
Holli Cherevka: Thank you, Dan. Thank you everyone for joining the call today. This has been an active quarter and we are excited to provide corporate updates. First, we have strengthened our Executive Board and Executive Management team. It is our pleasure to welcome Michael Martino, Kevin Buchi and Dr. Howard Levy to the team. Mr. Martino has nearly four decades of pharmaceutical experience, he has led the development of drugs and devices to treat and diagnose inflammatory, autoimmune and oncology diseases. He has held roles at multi-billion dollar specialty pharmaceutical companies and finance, marketing, strategic planning, business development, and general management. He has served as CEO of both private and public small drug development companies where he has led development from pre-clinical through Phase 3 clinical trials transacted mergers and raise nearly 1 billion in capital through collaborative R&D agreements and financing with institutional investors. Mr. Buchi brings a breadth of public company pharmaceutical experience and a history of driving shareholder value. He notably progressed from Chief Financial Officer to Chief Operating Officer and ultimately, Chief Executive Officer at Cephalon. Under his tutelage, Mr. Buchi successfully secured a multi-billion dollar exit for the company's shareholders by executing a transaction that included therapeutic areas and pain management, respiratory, CNS, oncology and a biologic candidate and inflammatory disease. Dr. Levy brings an added layer of regulatory, medical and scientific knowledge as an MD PhD pulmonologist with over a decade as hospital chief of Critical Care Medicine along with the wealth of U.S. Federal Drug Administration or FDA experience most applicably with significant experience in drug development in the Center for Biologics Evaluation and Research or CBER division of the FDA. Dr. Levy past experiences as the Chief Medical Officer of Catalyst, Biosciences Incorporated, a biopharmaceutical company focused on developing novel therapies targeting the innate immune system to treat unmet medical need and as the Senior Global Medical Program Director at CSL Behring, a multi-billion dollar pharmaceutical company focused on plasma-derived and recombinant therapies providing unique and specific insight into successful medical development under the direction and review of the CBER division of the FDA. Dr. Levy brings with him to the role of Chief Medical Officer at Ampio Pharmaceuticals expertise in critical illness particularly in multiple organ failure with emphasis and respiratory viruses and phenomena and a robust background developing blood products. Adding to the executive management team at this time is critical as we believe the company is in the latest phase of development for Ampion, a groundbreaking therapy as the first novel mechanism of action for osteoarthritis patients in nearly a quarter of a century. Osteoarthritis patients desperately need a novel approach to the untreatable disease paradigm. To that end, the FDA has provided written agreement the pivotal study, AP3A is an adequate and well-controlled clinical trial that provides evidence of effectiveness of Ampion and can contribute to the substantial evidence of effectiveness necessary for approval of a Biologics License Application known as a BLA. The company has received a special protocol assessment, known as a STAR agreement from the FDA on the AP-013study with concurrence on the trial design as a confirmatory study of Ampion in osteoarthritic patients. This study was initiated in June of 2019 prior to the onset of the COVID-19 pandemic. During the conduct of the AP-013 study, the FDA recognized the January 2020 Health and Human Services declaration of a public state of emergency due to COVID-19 and its impact on clinical trials, which the agency addressed in guidance for industry. In addition to the guidance for industry, the FDA has provided the company with guidance on the AP-013 clinical program in light of the COVID-19 health emergency. The company has closed the AP-013 clinical database and is currently analyzing the data from the study based on both public guidance and specific guidance from the FDA on the Ampion osteoarthritis program with the goal to have a meeting with the FDA in the first half of 2022 And in addition to providing evidence of safety and efficacy in pain and function, pre-clinical and early clinical studies have shown that Ampion impacts multiple genes related to repair and regeneration of cartilage. These published findings suggest that Ampion treatment may prime stem cells for both mobilization and chondrogenic differentiation potentially explaining some of the beneficial effects achieved in clinical trials with Ampion treatment. For example, data published in a peer-reviewed journal titled patient safety and surgery showed a significant reduction in pain and a lower rate of total knee replacement with Ampion treatment compared to sailing control and osteoarthritis of the knee patients and a Phase 1-2 study with long-term follow-up for more than three years. MRI analysis of these patients demonstrated potential cartilage preservation with Ampion treatment compared to sailing representing potential for disease modification. Patients treated with Ampion had less cartilage loss than patients treated with sailing and all pre-specified in the time we defined regions of the knee. Ampion also showed increased cartilage thickness in two lateral subregions. Ampion's positive impact on pain and functionality including in patients with severe disease may be driven in part by these regenerative effects of Ampion on cartilage deposition and restoration in the joint. In addition to this osteoarthritis program, the ability to successfully demonstrate strong in-vitro data has supported an expedited regulatory path into human clinical trials for respiratory distress due to COVID-19. This was presented in a scientific forum at the International Society for aerosols and medicine, also known as ISAM and a report titled regulatory decisions during COVID-19 efficient non-clinical inhalation toxicology for clinical program, which supports the Ampion Inhalation program for the treatment of respiratory distress due to COVID-19. Currently Ampion is being investigated as a potential inhalation treatment for patients with severe COVID in a hospital setting in the 1819 clinical study under a U.S. FDA IND. This study protocol was reviewed by the FDA for consideration and support of a potential emergency use authorization or EUA for the treatment of COVID-19 patients. The first patients in the 1819 study was enrolled and treated in the United States and following the regulatory approval from the Drugs Controller General of India enrollment and patient treatment has commenced in India starting in October of this year. The clinical trial is currently designed to enroll 200 patients with an interim analysis after 150 patients have been enrolled and completed the 28-day visit to allow for evaluation and sample size re-estimation as appropriate. It is anticipated that enrollment for the interim analysis will be completed in the second quarter of 2022. Also evaluated by the FDA for consideration as a potential EUA treatment in the fight against COVID 19 is the Phase 2 AT-017 clinical study for the intravenous treatment of implant in a hospitalized COVID 19 patients. This study is currently designed to enroll 200 patients with an interim analysis designed to evaluate 40 patients and include sample size re-estimation as applicable. Few of the interim analysis population will be enrolled by early first quarter. Additionally, the inhaled treatment of the implant is being investigated in a randomized controlled Phase 1 study for at-home use among COVID patients. This study aims to evaluate and current treatment compared to control in 30 long COVID patients. The company believes enrollment for this study will be completed by the end of the year. The clinical trials and the investigation of Ampion is a possible treatment for respiratory distress and COVID 19 patients is supported by Ampion data and supplementary publications in peer-reviewed scientific journals. Most recently the data from a randomized controlled Phase 1 trial, which was conducted to evaluate hospitalized patients with respiratory distress due to COVID-19 was published in the peer-reviewed journal titled infectious diseases and therapy. Patients in this study, received the standard of care for COVID-19 including respiratory therapy, corticosteroids and antiviral therapies. Patients were randomized one to one to inhalation treatment with Ampion as an adjunct to standard-of-care or to standard-of-care alone as control. Ampion was administered via inhalation daily for five days, safety and clinical efficacy endpoints were evaluated. 40 subjects were enrolled and randomized in the study and it was observed the antiviral therapy was required and fewer treated subjects 26% compared to 52% in control. And steroids were administered for most subjects. The study met its primary endpoint with no implant treatment-related adverse events and incidents and severity of adverse events were comparable between groups. Notably compared to control subjects treated with Ampion had fewer deaths 5% compared to 24% in the control arm, shorter hospital stay eight days versus 12 days, fewer ICU admissions 21% versus 33% and a greater proportion of patients treated with Ampion had improved clinical outcomes compared to control. The Phase 1 clinical results indicate inhaled Ampion is safe, well tolerated and could lead to fewer patients experiencing deterioration or death due to COVID-19. In addition to the ongoing clinical investigations for Ampion treatment and inflammatory disease, the company has continued to strengthen the Ampion platform technology research and development pipeline. Most recently, presenting preclinical data and potential application for Ampion in acute kidney injury known as AKI and lupus nephritis in scientific forums. This clinical and preclinical activity is supported by robust in-house manufacturing. The manufacturing team recently delivered a presentation titled pivoting from one to multiple production platforms to treat COVID-19 at the 2021 International Society for Pharmaceutical Engineers known as the ISPE, at the Annual Meeting and Expo in Boston, Massachusetts this November. The presentation reports Ampio's innovative work which is significantly and rapidly expanded the capabilities of its wholly owned automated drug manufacturing facility that was initially focused on producing for of the platform immunomodulatory drug Ampion for articular injections into patients with osteoarthritis of the knee. In less than four months, the manufacturing facility was reprogramed to manufacture Ampion products to support clinical development in osteoarthritis along with development in COVID-19 and pre-clinical application. With these updates and the continued progress and forward momentum from the company, it is my pleasure to introduce you to Dr. Levy for an update from our Chief Medical Officer.
Howard Levy: Thank you so much, Holli. Firstly, I'm delighted to be in the point to the role of Chief Medical Officer at Ampio. We have three clinical trials underway that you've just heard that are evaluating the safety and efficacy of on Ampion delivered by the intravenous, infusion roots all inhalation for five days choosing the onset of severe COVID, as well as using inhaled Ampion for the long haul COVID particularly difficult group to treat. Executing a clinical trial is always a complex undertaking and needs to be formed with strict adherence to GCP that's good clinical practice. This means we can participate participant interaction, 100% capture and monitoring of that data, clinical trials in age of COVID where there is competition for physician and nursing time and strict enforcement of safety protocols, as well as strain supply lines has added additional complexity. We've added India to the protocol AP-019 starting nebulized versus placebo to accelerate enrollment in the trial and enrollment and treatment in India is currently underway. So preclinical data provides robust evidence of Ampion inhibition of proinflammatory cytokine release. Down regulation of transcription of proinflammatory cytokine factors, at regulation of transcription of the anti-inflammatory factors in homes to lease of pro resolving lipid mediators and in the homes - in those barrier function. All of these are desirable pharmaceutical properties for the prevention of progression, as well as the treatment of moderate and severe COVID. Additional therapies are required to provide weapons against the devastating respond to failure inside of client storm for both virus. Steroids and other approved therapies of best administered in a narrow window early in COVID and are often not described because of delayed recognition of the diagnosis. So our trials target established mild-to-severe pulmonary compromise to prevent progression to respond to failure and death. In addition, as highly previously noted, we are finalizing the analysis of AT-013 study and preparing the code documentation that is required for a meeting with the FDA, which we expect will be in the first half of 2022. So with that, I'll now turn the call over to Dan, who will moderate the question-and-answer portion.
A - Dan Stokely: Thank you very much. Howard. Before I go into the Q&A section, I'd first like to tell everyone that effective immediately, the company is going to disseminate all non-financial information, information not require disclosure of an 8-K. That's going to be done going forward and utilizing media communications provided by . So with that said, I'll go into the Q&A and there has been quite a few questions here. And we see, the first question is what would be the most accurate way to characterize your discussions with potential partners? You know, as we -- I'll take that one. But as we previously discussed, you know, it's an active and ongoing process. You know, we are -- as we've said before, we're very pleased with the level of interest and we will disclose more, you know, at such time when it's appropriate. Next question is how has the new data affected their interest levels, I'm assuming partnership or partnering interest levels. Holli, do you want to take that?
Holli Cherevka: Sure. Thank you, Dan. We believe the company is in the latest phase of development on the Ampion as mentioned a groundbreaking therapy with the first novel mechanism of action in osteoarthritis drug development in nearly a quarter of a century. This is an ongoing process and interest has been expressed both before and after the database locks at AT-013 study. We're not going to speculate beyond that at this time.
Dan Stokely: Okay. The next question is, do the Merck and Pfizer COVID full results do they incline you to rethink how your COVID program is prioritized. David, do you want to take that?
David Bar-Or: Sure. So both of those case anti-viral treatments targeted for patients who have initial symptoms, which is a very different population from the Ampion program. Ampion program is targeting to provide benefits in clinical outcomes for patients with moderate to severe respiratory distress who are hospitalized and in the inflammatory phase of the disease where limited treatment often exist. These patients have already failed to respond adequately to anti-viral therapies, to steroids and antibody infusions which highlights the opportunity for Ampion to provide treatment in addition to these regimens. Ampion addresses the inflammatory stage of the disease in hospitalized patients. So no -- and the answer to your question, it will not affect the prioritization of our drug program.
Dan Stokely: Thank you. Next one is, do you feel the pandemic as a significant probability of compromising your trial and early SPA in relation to your position with the FDA. Holli?
Holli Cherevka: The reality is that we will not know answer to this question until we meet with the FDA, of course. What we do know is that under FDA guidance including direct discussion our clinical trial with sensitive to the impact of the COVID-19 health emergency. We believe we have followed the guidance and have a regulatory path forward which we plan to discuss with the FDA in the first half of 2022.
Dan Stokely: It looks like more of a general question. But can you describe generally the process for meeting with the FDA? Holli, do you want to take that one?
Holli Cherevka: Of course. There is published guidance on the process for formal meetings between the FDA and sponsors. We will be following the process outlined in this guidance. In general, FDA meeting scheduling timeframes are related to the type of meeting requested. For example, a meeting may be requested to occur within 60 to 75 calendar days from receipt of the request. With the expectation the FDA will respond either accepting or rejecting the meeting within 14 to 21 calendar days of said request.
Dan Stokely: Okay. This will be the last one. What is the capacity of your manufacturing facility and in the equivalent 4CC virus? I'll take that. Our manufacturing facility can produce in the range of about 8 to 10 million virus annually. And, you know, based upon this projected share in osteoarthritis from this one facility, keep in mind, it can be easily replicated, in other locations in other geographies. We feel that this capacity that we have here in Colorado on a standalone basis is certainly sufficient for the company into the market. And Holli, do you want to provide some closing remarks?
Holli Cherevka: Yes. Thank you, Dan. And thank you to the entire team. It certainly has been an unprecedented time on a global scale. We are incredibly encouraged by the progress to move the OAK program forward, launch program in the fight against COVID-19 and demonstrate additional preclinical applications in the autoimmune space for Ampion. Severe OAK remains an unmet medical need and we are focused on delivering value to shareholders by realizing an asset for this underserved patient population. Additionally, due to its unique mechanism of action as a biologic drug, we have been able to move swiftly and efficiently through the regulatory process for Ampion treatment investigation in COVID-19 patients with respiratory distress. This regulatory cadence allows for early demonstration of safety and efficacy in severe and critical COVID-19 patients, which has been presented to the FDA for guidance on potential EUA. We are excited to announce this publication of this data in a peer-reviewed scientific journal titled Infectious Diseases and Therapy as mentioned earlier. The scientific team remains active and hard at work to continue research on preclinical and label expanding applications and the anti-inflammatory immunomodulation space. This is supported by our robust in-house manufacturing. The manufacturing team continues to efficiently and effectively support the clinical and preclinical development of Ampion. The company remains focused on the advancement of immunology-based therapies to treat prevalent inflammatory conditions for which there are limited treatment options to provide value to patients and shareholders alike. We look forward to providing continued progress and updates each quarter. Thank you again everyone for tuning in today.
Operator: Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.
