Virios Therapeutics, Inc. (VIRI) on Q2 2021 Results - Earnings Call Transcript
Operator: Good morning, and welcome to Virios Therapeutics Second Quarter 2021 Financial Results Conference Call. Please be advised that today’s call is being recorded at the company's request. At this time, I'd like to turn the call over to Angela Walsh, SVP Finance, Treasurer of Virios Therapeutics. Please proceed, Angela.
Angela Walsh: Thank you. Good morning everyone and thank you for joining us on today's conference call. We are pleased to be with you today to discuss Virios Therapeutics second quarter financial results, as well as to provide you with an update on the operational progress we have made during the first six months of 2021. Please note that our financial results, press release is now available on our website. We'll start today's call with our CEO, Greg Duncan, providing you with a brief update on our corporate progress during the past quarter. And then I’ll return to review our second quarter financial results. In addition our Chief Medical Officer Dr. Mike Gendreau and Ralph Grosswald, our VP of Operations are with us for the question-and-answer portion of the call. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involves risks and uncertainties that can cause actual results to differ materially. Any forward-looking statements are made only as of today, and we disclaim any obligation to update these forward-looking statements other than as required by law. Please see the forward-looking statements disclaimer in our financial results release issued this morning and the Risk Factors in the company's current and subsequent filings with the SEC. It is now my pleasure to turn the call over to our CEO, Greg Duncan. Greg?
Greg Duncan: Thank you very much, Angela. And good morning, everyone. We appreciate you joining us on the call today, as we’re very pleased to provide you with an update on the substantial progress the Virios Therapeutics team has made since our last quarterly update. In May, we dosed the first patient in our landmark Phase 2b Fibromyalgia trial. We refer to this trial as the FORTRESS trial, which stands for Fibromyalgia Outcome Research Trial Evaluating Synergistic Suppression of HSV-1 or Herpes Simplex Type 1 as it's more formally known. The primary endpoint for this trial will focus on Fibromyalgia patients pain reduction, and we're using the endpoint that has been used to assess all FDA approved Fibromyalgia treatments to-date. Under the expert leadership of our clinical team, I am pleased to report that all 41 sites participating in the FORTRESS trial are fully operational and actively recruiting patients. Based on this progress, we can reconfirm our prior guidance that we expect to report our top-line results from the FORTRESS Phase 2b trial in mid-2022. In parallel to the FORTRESS Phase 2b trial, our chronic toxicology studies in two species are progressing as planned. These studies will be required by regulatory authorities before we are permitted to dose study participants with IMC-1 for intervals of one year or more, which we plan to do in our Phase 3 program. The chronic toxicology program is timed to complete by the time the FORTRESS study ends, so that we will be able to propose a final Phase 3 program to FDA at the conclusion of our current study. And finally, we’re reaffirming that our current cash should provide the company with operational runway to the end of 2022, a full six months following the planned announcement of the top-line results from the ongoing Fibromyalgia Phase 2b trial. With that brief update on our operational progress, let me turn it back over to our Senior Vice President of Finance, Angela Walsh to discuss our Q2 financial results. Angela?
Angela Walsh: Thank you, Greg. I’ll begin today with our cash position. As of June 30, 2021 we had $21.8 million in cash as compared to $29.8 million as of December 31, 2020. As Greg just mentioned, we expect our current cash to be sufficient to fund the company's operations through the end of 2022. With respect to our income statement, as a development stage company, we did not generate revenue during the three months ended June 30, 2021 or in the year-ago quarter. We reported research and development expenses of $3.2 million for the second quarter ended June 30, 2021 compared to $0.02 million for the year-ago quarter. This increase in research and development expenses was primarily attributable to expenses for our FORTRESS clinical trial, our chronic toxicology program and drug development and manufacturing costs. We reported general and administrative expenses of $1.1 million for the second quarter ended June 30, 2021 as compared to $0.5 million for the year-ago quarter. This increase in general and administrative expenses was primarily attributable to costs associated with being a public company. We reported a net loss of $4.3 million for the second quarter ended June 30, 2021 compared to a net loss of $0.7 million for the year-ago quarter. I'll now turn the call back over to Greg. Greg?
Greg Duncan: Thank you once again, Angela. The unique fixed dose synergistic antiviral mechanism of our lead candidate IMC-1 represents a completely new approach to treating Fibromyalgia and potentially other Somatic Syndrome Disorders. The role of activated Herpes virus as a potential catalyst in diseases like Fibromyalgia, and chronic GI disorders is supported by both mechanistic and clinical data, an evidence of this unique approach can be seen in the fast track review designation granted by the FDA to IMC-1 to treat Fibromyalgia, which to the best of our knowledge represents the first time a new drug candidate has been granted this designation for a Fibromyalgia treatment. Encouragingly, there is increasing recognition in the scientific community of the potential role of activated viruses like HSV-1 triggering a wide range of morbidities including Fibromyalgia, irritable bowel syndrome, and fatigue related disorders. We're actively exploring the feasibility and the timing of executing additional HSV-1 targeted research programs to complement our existing Fibromyalgia program and expect to communicate said plans during the second half of this year. We’re committed to frequent and proactive outreach to the investment community, as well as the medical community as we progress our journey to try and improve treatment standards for hundreds of millions of fibromyalgia patients across the globe. Operator, we’re now ready for questions.
Operator: Thank you. The floor is now open for questions. . We'll take our first question from David Bautz with Zacks Small-Cap Research. Please go ahead.
David Bautz: Hey, good morning, everyone. I'm curious in terms of patient enrollment, have you seen any type of drop off with the recent increase in COVID cases around the country?
Greg Duncan: Hi, David. This is Greg Duncan. I'll take that first question. And thank you for joining today. Interestingly enough, we have progressed as I mentioned in the call with getting all of our sites operational. We have a really nice pace going on. I believe we've enrolled slightly over a 100 patients in the trial over the first few months and we do not anticipate per se major changes in the enrollment rate based on COVID. Based on our experience, and the team's experience -- the clinical teams experience last year during the first outbreak Fibromyalgia Research was one of the few categories that actually progressed as it had prior to COVID. And so based on prior experience, we’re not forecasting that, but certainly we will keep an eye on that. And I think the reason these patients continue to show up really is reflected in the severity of their disease, the pain, the fatigue, the morbidity, the mortality that's associated with disease is quite significant. And as a result, these patients are quite committed to getting care that can improve their own standard. So while we're not forecasting, we’re sort of keep an eye on it, but we have not seen any delays to-date, David.
David Bautz: Okay, great. Now in terms of other programs that you plan on taking into the clinic. And I was wondering if you could just talk a little bit about what goes into determining basically, what those next programs will be?
Greg Duncan: Yes, so excellent question. The impetus for moving into Somatic Syndrome Disorders is based on the experience of our Founder Dr. William Pridgen in using combination antiviral therapies to treat Somatic Syndrome Disorders like irritable bowel syndrome, Fibromyalgia, and fatigue related disorders. We also come to research and look at prior work to determine where Herpes Simplex Type 1 has been implicated in different diseases. And you can see in the medical literature that Herpes Simplex 1 is hypothesized or postulated if you will to be involved in a number of different diseases. And the two that have reached the top of our queue behind Fibromyalgia are actually irritable bowel syndrome, and fatigue related disorders. In particular, as you're probably well aware, we announced in February a collaboration with Dr. Michael Camilleri of the Mayo Clinic to design a Phase 2a proof-of-concept study in irritable bowel syndrome and this was selected for a number of reasons, notably our founders experienced with these particular patients. You may recall that the University of Alabama tissue biopsy study that was presented at DDW today's Digestive Disease Week Meeting in the spring, actually highlighted the activation of Herpes Simplex Type 1 in Chronic GI disorders. So there's a mechanistic tie in that's been postulated, it's been presented at scientific meetings. We hope that that data gets published. And I think it's safe to say that most people assessing the irritable bowel syndrome marketplace. Note there is significant unmet need in IBS treatment, much like there is in Fibromyalgia. So this is an excellent target. And I would mention from our Phase 2a trial that IMC-1 significantly reduced Fibromyalgia related pain, which we believe provides us with a great signal for the potential utility of IMC-1 to retreat IBS pain. The other area we're looking at are fatigue related disorders. These are also implicated in the medical literature as potentially being activated and replicating as a potential root cause of fatigue related disorders that includes chronic fatigue syndrome. And as you may know, there is increasing evidence that fatigue is a number one symptom amongst the COVID long-holder population. And that's another area that we're exploring to see whether or not this particular mechanism might provide some utility for those patients who are desperate for therapies right now, because it's really an emerging medical need. And the recent literature in that particular space suggests that it may not actually be the Coronavirus that may be the other viruses, Epstein-Barr, Herpes Simplex Type 1 et cetera, that are breaking through and the immune system gets challenged by the Coronavirus. And as a consequence, you're seeing the breakthrough of other potential symptom manifestation. So the upshot, as we just mentioned in the brief update is we will be back at the folks like yourself for the investment community to update on our plans to progress programs in those particular areas as complements to the Landmark Fibromyalgia Program. And we report that back after the second half of this year. Does that answers your question, David?
David Bautz: Yes, it does. Thank you. And I have one follow-up on that. Yes, I'm just kind of curious. What kind of reception you get at scientific meetings, when you propose this theory of viral driven Fibromyalgia and other chronic disorders? I mean, are the KOLs and experts in the field open to this idea? Do you get pushback? What kind of interactions going there?
Greg Duncan: Yes, it’s a great question, David. In fact, if you talk to our board members, Dr. Rich Whitley and Dr. Abel De La Rosa, they will tell you, they were trained on these theses many, many years ago, and the research kind of went dark, if you will for many years. And so there's a whole contingent of neurologists that have actually been trained on this hypothesis. And I've been looking to test this hypothesis. And unfortunately, it was not pursued with the vigor that Virios Therapeutics is pursuing that. And so the consequence, there’s actually great receptivity to this thesis in the virology community. And as evidence of broader interest in this, we can see that the folks that treat Fibromyalgia, these are rheumatologists, neurologists, psychiatrists, pain specialists are actually very intrigued and we actually had to turn down sites to participate in our Phase 2b trial as evidence of that interest in this particular thesis. And I think what really helps us make that case is to the best of our knowledge. IMC-1 fast track review designation, which we believe based on our knowledge is the first ever granted to a Fibromyalgia treatment candidate. We believe validates the uniqueness of that claim for treating Somatic Syndrome Disorders like Fibromyalgia, GI disorders, et cetera. And we think in addition to the FDA, that's why the biopsy research I referenced earlier to your IBS question or other areas of interest question was accepted as a handful of late breaking live presentations at BBW, because it's a pretty exciting place to be and I think the general knowledge of the world about viruses and the impact of viruses is an all-time high right now. So that probably helps raise general awareness. And then obviously with our activities focused on HSV-1, we hope to continue to build on that momentum.
David Bautz: Yes. All right. Great. Well, I appreciate you taking the questions this morning.
Greg Duncan: Sure. Thank you, David.
Operator: There appear to be no further questions at this time. We'll turn it back to Mr. Duncan for closing remarks. Sir, the floor is yours.
Greg Duncan: Yes. Thank you, Karen. And thank you all for attending this morning's quarter two update for Virios Therapeutics. As we mentioned, we believe we're truly pursuing a very novel approach of delivering combination antiviral therapies to patients who suffer from chronic debilitating diseases. And we’re targeting a very large market opportunity with Fibromyalgia where if you believe the epidemiology data, and we do, there are literally hundreds of millions of patients are suffering from Fibromyalgia, and evidence of that novelty is can be seen in our fast track review designation, which I just mentioned in response to David's question. The team and the board has extensive drug development experience for many category leading therapies. And notably, that experience includes development commercialization of two of the three drugs ever approved and commercialized to treat Fibromyalgia here in the U.S. As I mentioned, we do think this target of HSV-1 or Herpes Simplex Type 1 virus inhibition holds great promise for other Somatic Syndrome Disorders, IBS and fatigue related syndromes being the top of the queue. We will report back on our plans to pursue those opportunities in the second half of this year. Be safe and certainly keep an eye on the various news feed with updates over the next quarter and our next presentation will be at the SNN Small Investor Conference on August 19, if you'd like to dial in and do your own latest update. Thank you very much.
Operator: Ladies and gentlemen, this does conclude today's teleconference. We thank you again for your participation. You may disconnect your lines at this time and have a great day.
