Virios Therapeutics, Inc. (VIRI) on Q3 2021 Results - Earnings Call Transcript
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Operator: 00:02 Good morning, and welcome to Virios Therapeutics Third Quarter Twenty Twenty One 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: 00:24 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 third quarter financial results, as well as to provide you with an update on the operational progress we have made during the first nine months of twenty twenty one. Please note that our financial results, press release is now available on our website. 00:50 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 third quarter financial results. In addition our Ralph Grosswald, our Vice President of Operations is with us for the question-and-answer portion of the call. 01:12 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 nineteen ninety five, which involves risks and uncertainties that can cause actual results to differ materially from the information expressed or implied, by these forward looking statements.. 01:37 For more information regarding such risks and uncertainties, please see the risk factors outlined in the company's filings with the SEC. 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 section and our financial results release issued this morning for more information. 02:02 It is now my pleasure to turn the call over to our CEO. Greg Duncan.
Greg Duncan: 02:08 Thank you, Angela, and good morning, everyone. We appreciate you joining us on the call today as we are very pleased to provide you with an update on a substantial progress the Virios Therapeutics team has delivered over the past few months. Before updating you on our operational progress, I thought it might be useful to overview the Virios Therapeutics value proposition for those new to the Virios story and or for those attending a very quarterly update for the very first time. 02:37 Virios Therapeutics incorporated is developing novel combination antiviral therapies, to treat patients suffering from chronic debilitating diseases such as Fibromyalgia, irritable bowel syndrome, and fatigue related disorders. The focus of our lead research program is on improving clinical outcomes for patients diagnosed with Fibromyalgia. 03:00 The Fibromyalgia patient community and therefore market is actually quite large with estimates suggesting over two hundred million people worldwide meet the diagnostic criteria for Fibromyalgia. This large market is unfortunately very dissatisfied largely due to the poor tolerability of the three FDA approved Fibromyalgia medicines. Our lead antiviral development candidate is oral IMC-1, a dual mechanism combination antiviral therapy. IMC-1 is formulated as a tablet dose twice daily and has already demonstrated statistically significant pain reduction and tolerability better than placebo in the previously completed Phase 2a Fibromyalgia trial. 03:45 Based on significant unmet need in the Fibromyalgia treatment on than Novelty of our antiviral approach and our strong existing clinical data IMC-1 was granted fast track review designation by FDA. The first such designation for a Fibromyalgia development candidate to the best of our knowledge. 04:05 Based on the success of our Phase 2a Fibromyalgia study, we commenced our ongoing Fibromyalgia Phase 2b FORTRESS trial in quarter two of this year. We refer to this trial as FORTRESS, which stands for Fibromyalgia outcome research trial, evaluating synergistic suppression of HSB-1. We expect to report top line results from this ongoing trial in quarter three of twenty twenty two. Our research programs are managed by a terrific team and Board of Directors who have extensive drug development and commercialization experience including experience managing several household main medicines. Importantly, our executive team and Board have been involved in the development in commercialization of two of the three previous FDA approved medicines to treat Fibromyalgia. 04:54 And finally, through prudent cash management, we presently projected that we have ample cash to run operations into quarter one of twenty twenty three. In short, we have a novel antiviral treatment candidate targeted towards improving care for a large dissatisfied cohort of Fibromyalgia patients. Our ongoing Phase 2b Fibromyalgia program is fully funded and is being managed by a team who have successful experience developing regarding FDA approval for previous approved Fibromyalgia treatments. Within this broader of context, let's move to our quarter three update. 05:32 Within to past several months, the team has achieved the following key milestones. I'm very pleased to report that we have enrolled over two hundred of the four sixty patients we are targeting for inclusion in our landmark Phase 2b FORTRESS clinical trial. The primary endpoint for this trial will focus on reduction in pain. The very same endpoint that has been used to assess all previously approved FDA medicines today. 05:57 In parallel to the FORTRESS Phase 2b trial our chronic toxicology studies in two species of progressing as planned. The results of 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 at our Phase 3 program. The chronic Toxicology program is time to complete by the time the FORTRESS trial was completed. So that, we will be able to propose a final Phase 3 program to FDA at the conclusion of the current study. I'm also very pleased to announce that we have filed the second IMC-1 investigational new drug application with FDA. This new “IND" is focused on exploring the utility of IMC-1 in treating patients diagnosed with irritable bowel syndrome, which you may know as IBS. 06:46 Development of this regulatory filing is the first deliverable from our IBS collaboration with Dr. Michael Camilleri of the Mayo Clinic announced in quarter one of this year. As a precursor to exploring the clinical utility of IMC-1 for treating IBS various therapeutics executed a tissue biopsy study to better understand the role of activated HSB-1 in patients, with chronic GI disorders. 07:13 These data were actually submitted to the digestive disease week annual Scientific Congress and accepted as a “late brighter submission” for presentation to the entire DDW congress participants. Dr. (Carol) got this presentation of these data highlighted the presence of activating replicating HSB-1 and GI biopsy tissue harvested from patients diagnosed with a chronic GI disorder. 07:39 Identifying HSB-1 activation and IBS patients is the first step in providing proof of the potential of the Herpes Simplex 1 virus as a potential root cause of IBS, much like it is in Fibromyalgia. With mechanistic data in hand, we believe the time is right to formally explore the potential clinical benefits IMC-1 synergistic antiviral effects and delivering positive clinical outcomes for IBS patients. 08:05 Finally, we project that our current cash position should provide the company with operational runway into quarter one twenty twenty three. Approximately six months following the planned announcement of the top line results from a Fibromyalgia Phase 2b FORTRESS trial. This has been achieved to a continued prudent management of cash over the first nine months of twenty twenty one. 08:28 With that update on our operational progress, let me turn it back over to our Senior Vice President of Finance, Angela Walsh to discuss our quarter three financial results. Angela?
Angela Walsh: 8:40 Thank you, Greg. I will begin today with our cash position. As of September thirtieth twenty twenty one, We had nineteen point two million dollars in cash as compared to twenty nine point eight million dollars as of December thirty one twenty twenty. As Greg just mentioned, we expect our current cash to be sufficient to fund the company's operations into quarter one of twenty twenty three. 09:07 With respect our income statement, as a development stage company, we did not generate revenue during the three months ended September 30th of twenty twenty one or in the year ago quarter. We reported research and development expenses of three million dollars with the third quarter ended September thirtieth twenty twenty one compared to zero point one million dollars for a 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. 09:47 We reported general and administrative expenses of one point one million dollars for the third quarter ended September thirtieth of twenty twenty one, as compared to two point five million dollars for the year ago third quarter. This decrease in general and administrative expenses was primarily attributable to compensation expense recognized in twenty twenty for the issuance of membership interests to the company's founder. Offset by increase in cost associated with being a public company. We reported a net loss of four point one million dollars for the third quarter ended September thirty twenty twenty one compared to a net loss of two point seven million dollars for the year ago quarter. 10:33 I'll now turn the call over to Greg to moderate the question-and-answer portion of today's call. Greg?
Greg Duncan: 10:39 Thank you again Angela. 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 HSB-1 virus has a potential catalyst in diseases like Fibromyalgia and chronic GI disorders is supported by both mechanistic and clinical data and the fast track review designation granted by FDA to IMC-1 for the treatment of Fibromyalgia is the first time to the best of our knowledge for our new drug candidate in the Fibromyalgia research vertical. If the profile of IMC-1 that is emerged from our Phase 2a study holds up we believe our novel antiviral combination could be a game changer for patients and their doctors not to mention for various shareholders. 11:34 Encouragingly, there is increasing recognition in a scientific community of the potential role of activated viruses like Herpes Simplex Type 1 triggering a wide range of morbidities including Fibromyalgia and IBS. As mentioned earlier, we are pleased with the progress of our Phase 2b FORTRESS trial and we expect top line results from this landmark trial in quarter three twenty twenty two. We are committed to frequent and proactive outreach to the investment community as well as the medical community as we progress our journey to improve treatment standards for hundreds of millions of Fibromyalgia patients across the globe. 12:14 Operator, We are now ready for questions.
Operator: 12:20 Thank you. ladies and gentlemen the floor is now open for questions. Our first question today is coming from David Bautz at Zacks Small Research. Your line is live. You may begin.
David Bautz: 12:52 Hey good morning, everyone. Thanks for the overview this morning. Greg. I was wondering though, if you could maybe expand upon what the timelines are going to be for the IBS Program? And then maybe you could give kind of a broad overview of how you would envision the first clinical trial in that indication going.
Greg Duncan: 13:14 Thank you, David. I appreciate you joining on the call this morning. I'll take the first question first relative timelines as announced this morning we filed the IND this morning, we expect to get feedback sometime by the end of this year or early part of next year presuming alignment with FDA, we would look then to Catalyze drug supply and likely start the trial, probably Q2 call it middle of twenty twenty two. It takes a little bit of time to get all the investigators together, as you know from a Fibromyalgia experience, we like to do live investigators meetings to train people. And so I would forecast of course patient first visit probably close to Q2 of next year. The size and scope of the trial would be probably safe to say consistent with the completed Fibromyalgia Phase 2a study. That was a study as you may recall of about one hundred and forty patients roughly seventy per arm, maybe sixty or seventy patients per arm, maybe sixty or seventy patients per arm so between one hundred and twenty and one hundred and forty patients and we'll progress that study from Q2 probably take on the order of nine months or so to recruit the patients of somewhere there about so, I would expect data sometime in the first half of twenty twenty three.
David Bautz: 14:36 Okay, great. And I'm curious in regards to the FORTRESS trial, are you pleased that's how enrollment is going? Is it kind of how you thought it would go? Is it faster kind of long pace where you either would be? And then are you getting any type of feedback from the clinicians as far as what patients feel about this approach because it is novel are they excited about it? Are you hearing anything about that?
Greg Duncan: 15:01 Yeah. So both good questions. The FORTRESS trial isn't enrolling. Basically as we had booked. I will say it's real Kudos to Ralph was on the line in my general and the rest of the clinical team. You probably as you see other companies, many companies are struggling due to COVID related issues. Studies sites, so I'm looking for study coordinators, patients are neglecting to show up for office visits. And so some of our colleagues if you want at the industry level are really struggling and by and large, knock onward, things are progressing broadly as we had hoped, we have over two hundred patients enrolled in the trial to date. There are other trials in the category that have been enrolling since twenty eighteen twenty nineteen. So, as you know, we started earlier this year and we already have two hundred patients in the trial and I believe the fact that we've had such a robust effort is in large part due to the hands on role of the clinical team , etcetera, but also because people are truly excited about this approach, most of the drugs like all of the drugs that are approved by FDA or CNS needed, so they're kind of fit in the basket together and they deliver good results, but are not more tolerated I think the fact that the approach here is different addressing what we believe is a potential root cause of the disease and the profound nature of the response we saw reduction in pain, improvement in anxiety reduction in depression, improved functionality and a tolerability profile here in the phase 2a that was better than placebo. Patients and doctors are pretty excited about it. And I think that's actually contributed to the robust recruitment to date because these patients are very knowledgeable that had good disease for long time, they understand the therapies, most of them have cycled through all of the approved therapies. And likely some of the development candidates and they understand that tolerability is no small thing. There are drugs that reduce pain but there's really not been a game changer if you will in our view that delivers both efficacy and the tolerability. And so I think that's helped contribute to the robust recruitment rate. We have guided to mid twenty two results since we did the IPO and I think it's safe to say, we're confident with results in Q3 twenty twenty two and that's our guidance and we're standing by.
David Bautz: 17:25 All right, great. Appreciate you taking the questions this morning.
Greg Duncan: 17:28 Yeah. Thank you, David. Really appreciate you for asking the questions.
Operator: 17:36 Thank you. We have no further questions in the queue at this time. I'd now like to turn the call back over to CEO, Greg Duncan.
Greg Duncan: 17:55 Thank you, Kate. Thank you guys for attending this morning. We're pretty excited as you can probably sense about the potential of IMC-1 in Fibromyalgia and look to explore the potential utility of IMC-1 in irritable bowel syndrome presuming along with FDA on a forward program and simply put we are targeting very large to satisfied markets. We have really terrific data on both clinical and mechanistic to support our thesis. Look forward to continuing progress on both the Fibromyalgia and IBS fronts to deliver value for patients, which I probably don't have to tell you will ultimately deliver value to shareholders and we're very committed to that mission. We do appreciate your interest in Virios Therapeutics. Thank you to the team for all that great work and we look forward to updating you as we continue to progress our research pipeline. Thank you.
Operator: 18:46 Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
