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Regado Biosciences, Inc. (NASDAQ:RGDO)

Q4 2013 Earnings Call

March 13, 2014 8:30 AM ET

Executives

Tricia Truehart – IR

David Mazzo – CEO

Chris Courts – VP, Finance

Steve Zelenkofske – SVP, Clinical and Medical Affairs and Chief Medical Officer

Analysts

Chad Messer – Needham & Company

Ritu Baral – Cannacord

Liana Moussatos – Wedbush Securities

Operator

Good morning and welcome to the Regado Biosciences’ Fourth Quarter and Year-End Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions). Please note that this event is being recorded.

Now, I would like to turn the conference over to Tricia Truehart. Ms. Truehart. Please go ahead, sir.

Tricia Truehart

Thank you. Good morning and welcome to our year-end 2013 corporate update and financial results call. If you’ve not already received it, you can access the press release and 10-K filed by Regado at www.regadobio.com under the Investors’ tab.

Leading today’s call is Dr. David Mazzo, Regado’s Chief Executive officer. Also joining us on the call today is Chris Courts, Vice President of Finance; Dr. Steve Zelenkofske, our Senior Vice President of Clinical and Medical Affairs, and Chief Medical Officer; Michael Metzger, our President and Chief Operating Officer; and Dr. Chris Rusconi, Senior Vice President, Discovery Preclinical Development and Chief Scientific Officer.

Before we begin our discussion, I would like to caution listener’s that today’s speakers will be making forward-looking statements. Such statements reflect on current views with respect to future events and are based on assumptions and subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Certain factors that might cause Regado’s actual results to differ materially from those in the forward-looking statements include those set-forth under the heading business risk factors, management’s discussion and analysis of financial condition, results of operations in Regado’s Annual Report on Form 10-K, quarterly report on Form 10-Q and its current reports on Form 8-K, as well as those described in Regado’s earnings press release and other filings with the Securities and Exchange Commission.

You should carefully review all these factors and be aware that there may be other factors that could cause these differences. These forward-looking statements are based on information, plans and estimates as of this call and Regado explicitly disclaims any obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

And with that, I would now turn the call over to David.

David Mazzo

Thank you, Tricia. Good morning everyone. I’m very pleased to be here and to bring you a recap of 2013 as well as to provide our 2013 year-end financial results.

As many of you who have been following Regado, know 2013 was a very exciting year for us on both the corporate as well as the clinical development front. We started off the year closing the Series E financing and spent the first part of the year prepping for the initiation of our REGULATE-PCI trial, as well as undergoing the transition from a private to a public company.

Most of you realize, we began trading on the NASDAQ on August 22, with a total growth raised in IPO of over $46 million which gave us the funding necessary to initiate our pivotal Phase III program for REG1 in the ACS PCI indication. We sight great interest from institutional shareholders at that time and that has continued as we have continued to enroll and regulate PCI over the last year.

In a minute, I’m going to give the microphone over to Chris Courts, who will review the balance sheet and give you further detail on our financial results for the year that ended on December 31. But before we do that I’m going to provide a brief recap of some of the highlights of 2013.

Going back to REGULATE-PCI, we all remember enrolling our first patient in mid-September of 2013, actually several weeks ahead of our original schedule and we’re very pleased to announce that we enrolled our first European patients in December. The trial remains on schedule and I’ll provide a few more details in just a moment.

In addition to executing on REGULATE-PCI, we spent time on strengthening our executive leadership team. We’ve made significant additions to our board of directors adding two new independent directors Mr. Pierre Legault and Dr. Michael Mendelsohn both of whom, who have experience in guiding biotechnology and pharma companies.

Briefly Dr. Mendelsohn served as the Senior Vice President in Global Franchise set for cardiovascular medicine diseases at Merck & Company. And prior to joining Merck in 2010, Mike spent more than 17 years at Tufts Medical Center where he served as the first ever Chief Scientific Officer and the Executive Director at the center’s Molecular Cardiology Research Institute.

Pierre joined us and he has significant experience serving on board of directors and audit committees of public companies including that of Forest Laboratories. And he’s currently the CEO of NephroGenex, a late-stage biotech company. And he was previously Executive Chairman there.

Additionally, internally we’ve brought on Michael Metzger, our new President and Chief Operating Officer to reinforce the company’s goals to the late stages of development and prepare for commercialization. Among other things, Michael will be focused on directing our business development activities.

Additionally, as you remember for some of press releases, we filed and received a green light from the FDA for an ING for REG2, further executing on our pipeline. We’ve extended patent portfolio coverage for the Aptamer based platform. We closed recently a $20 million pipe financing extending our operational run rate. And by the way this was $4 million new shares we received some inquiries from shareholders. These are not anywhere of the current shareholders, selling these were new shares issued by the company to increase our balance sheet.

And then finally, and most excitingly, just a few days ago we announced that we have obtained fast-track designation for REG1 in the PCI indication.

At this point, it’s probably worth me reiterating just a few key features of our REGULATE-PCI Phase III study. The trial design and the details are as follows, which is 13,200 patient trial, which is being executed in more than 20 countries around the world with the anticipation of between 300 and 450 clinical sites.

It is the first superiority trial that being done in this indication and it is using bivalirudin as the active comparative. The trial is designed to demonstrate a 20% superiority in the efficacy end-point, which is the composite endpoint with ischemic events over bivalirudin, while demonstrating that we can preserve the benefits on the bleeding protection side offered by bivalirudin. And can provide pharmacoeconomic benefits to help reduce costs for procedures to payers.

The trial is highly powered with a 90% power to predict the 20% superiority and maintains very large levels of power down to predict even lower levels down to 12% superiority.

What makes this trial especially interesting is that it is unlike many others in this area truly a confirmatory trial. We’ve gone to great aims to mimic the populations, end-points, sourcing regimen and duration of follow-up of our previous trials. And that makes the radar results roughly to be groundbreaking trial, very predictive we believe of the Phase III outcome.

I can direct you to clinicaltrials.gov if you’d like to have some additional details.

Importantly, this year, we expect to have three interim analysis for the REGULATE-PCI trial, the first of which will come after 1,000 patients and it’s approaching very, very quickly within a predicting, a very early second quarter announcement of that result. And we remain comfortably on track for that.

If you recall, this trial began in enzyme negative patients and at the 1,000 patient market after a DSMB analysis we will open the trial up to all partners which would include the enzyme positive or NSTEMI ACS PCI patients.

We also have two additional interim analysis scheduled through the year at 25% enrollments which should occur during the summer and as 50% enrollment which is anticipated for the fall of this year at 25% and it will be a statistical safety announcement. And at 50%, there will be a statistical safety and efficacy analysis which will include the elimination of utility.

I will remind you that this is a very powerful utility analysis in that drug must be trending positively against the comparator and order for us to eliminate utility.

REGULATE-PCI was accepted to complete enrollments in the fall of 2015, and for us to have top-line data by the end of 2015. We’re very excited about the upcoming year and the milestones that we intend to hit. And the company continues to execute exactly accordingly to plan.

I will also point out that some folks doubted whether a company of our size would be in a position to truly operationalize a trial of this magnitude. The fact is that we are on schedule and have operationalized the trial very, very efficiently. I will also point out that Steve Zelenkofske and team will put together this trial, are using the same external infrastructure that a much larger company would use. And so, really from a quality and rigor perspective, this trial is no different than one that would be operated by a big pharma except that we’re able to deal with much greater efficiencies.

At this point, I’m going to turn the microphone over to Chris Courts, our Vice President of Finance. And he’s going to run through our year-end numbers.

Chris Courts

Thanks Dave. You guys have noted since a filing yesterday, cash at year-end 2013 was $30.7 million. This represents a significant increase in cash compared to the $14.8 million on the balance sheet at December 31, 2012. The increase was primarily due to a private offering (inaudible) in May of 2013 as well obviously the confirmation of the IPO in all the way for the last year which netted us $41.1 million.

As Dave alluded to and almost everyone is aware, the company did close a $20 million price transaction in February of this year, which netted us $18.7 million (inaudible). And this additional capital will get us through the second interim analysis which is currently projected to refer in third quarter of this year.

Our net loss for the year ending December 31, 2013 is $34.4 million this was mostly the $13.1 million loss for the year ended December 31, 2012. As would be expected, the vast majority of the company’s 2013 expense approximately $26.5 million or $34.4 million was related directly to the planning, the initiation, the progress of the REGULATE-PCI trial, which began September of 2013.

Loss per share decreased from $59.03 for the year ended December 31, 2012, the $4.59 for the year ended December 31, 2013.

And with that I’ll hand it back over to Dr. Mazzo.

David Mazzo

Thanks very much, Chris. I appreciate the summary. So, in summary, 2013 was truly a transformative year for Regado and 2014 promises to be equally significant as we continue development of REG1 and work to achieve the interim analysis in our REGULATE-PCI trial.

Without losing focus on this primary endeavor we also continue to build shareholder value to the development of our technology platform and advancement of our earlier stage pipeline including follow-on indications of REG1. It continues to be an exciting time for Regado, and we really appreciate your support and interest.

At this point, we’ll open the conference up for questions.

Question-and-Answer Session

Operator

Yes, thank you. (Operator Instructions). And the first question comes from Chad Messer with Needham & Company.

Chad Messer – Needham & Company

Hi, good morning. And thanks for taking my question. Congratulations on the progress with REGULATE-PCI, clearly the main driver right now.

I actually wanted to see if you get a little bit of an update on some of the other things in your pipeline that maybe going on in the background. I know you got an eye – and defiled for REG2, what are your current thoughts on when you mix that trial? And also, I mean, any progressive thoughts on REG3 as well?

David Mazzo

Thank you, Chad. Good morning, I appreciate your question. I’m going to ask Steve and Chris to join me in this response. So I’ll just give a top-line summary. Now, we continue to focus mostly on REGULATE-PCI, it’s a large endeavor for a company of our size and it takes most of our financial resources.

Having said that, we have filed the REG2 IND, if you recall Phase I-A for REG2 is completed and even Chris has been working on the protocol. And we will be initiating the Phase I-B trial for a right, at some point in the near future, really when financial resources and drug supply become available.

REG3 is in the last stages of preclinical development, REG3 is a GP6 inhibitor, again I’ll let one of these colleagues talk a little bit about that. And that’s an IND that’s likely to be filed probably towards the end of this year, early next year, again primarily driven by availability of resources.

And then, finally, we have some very interesting early-stage preclinical program especially a newly developed specific antidote program for some of the Oral Factor Xas, which is beginning to move forward. And again, I’ll ask each of my colleagues just to make a few comments about that, that’s a program that we hope to bring through preclinical development, relatively quickly. So, Steve, any further comments, and then Chris you can chime in.

Steve Zelenkofske

Yes. So, for REG1, the open heart surgery program was committed to the EMA a while ago. And we had the prove along starting that program, and a Phase II-A study that’s written and generated and will be operationalized when we have funding later in the year.

For REG2, again, we filed the IND and that included a protocol of the I-B study so that protocol has been accepted and sent in to the FDA for initial valuation as far the IND will be ready to be operationalized. And we have support for that as well.

David Mazzo

Okay.

Chris Courts

Yes, so, as it relates to the REG3 program, we continue to be very excited about G26 as a target that composition has behaved quite well and pharmacological. And so we look forward to moving that forward to as IND.

As related to the other programs Dave’s reference, again we’re very excited about the potential for the Aptamer technology to generate very specific antidotes to Oral Factor Xas and potentially other small molecules with dosing really driven by the high affinity and specifics, with specifics to the Aptamer for the target with the ability really for 2-B Aptamer specifically to the pharmacological properties of the Oral Xa.

Chad Messer – Needham & Company

Thanks Guys.

David Mazzo

Thank you, Chad.

Operator

Thank you. And the next question comes from Ritu Baral from Cannacord.

Ritu Baral – Cannacord

Thanks for taking the question guys. I wanted to first ask about the number of sites that you have up right now and is the ramp of the sites as important it is for other trials and is it meeting your expectations?

David Mazzo

Thanks, Ritu. I appreciate your question. We have not been giving specific guidance on the number of sites except to say that they have been in opening according to our original plan. The fact is that the exact number of sites and the exact rate of opening sites is somewhat dependent upon the enrollment rates that we’ve been seen. And so, Steve and adjusts the opening rates to meet our expectations.

And since enrollment is going quite well, we really don’t have any concerns on the site opening issue. So, we’re on schedule for that. I think going further as we get through the first 1,000 patient milestone and begin enrolling additional patients, we do expect I’ll call it a small explosion in the number of sites that we will have opened, which will allow us to significantly increase enrollments and reach the milestones for 25% and 50% enrollment according to the schedule that I outlined.

Ritu Baral – Cannacord

Got it. So, we can expect an up-tick in R&D say in Q2, somewhere we’ve been in Q4 and where we’ll be in Q1?

David Mazzo

Yes, that is correct.

Ritu Baral – Cannacord

Okay. And final question, the interim looks of 1,000 patient 25% and 50%, can you describe the nature of the communication that we’ll see at each of the three points?

David Mazzo

Sure, I’ll let Steve answer that.

Steve Zelenkofske

Yes, so, thank you. We have a safety evaluation at the 1,000 mark. We anticipate that at that point that the DSMB will give us a go, no-go on the expansion of the population from the elective to the enzyme positive group, the 25% work will be a safety evaluation as well. And will be a go no-go signal on safety. Just to remind you, we will have 3,300 patients enrolled in the study at that point, so we have a substantial size of exposure to de-risk the safety we believe.

And the 50% will be a full interim analysis, so we will be told whether we could continue to study for safety again, whether we met utility analysis or whether we had overwhelming superiority. So, that again would be a statement of we – that we’ll continue on or we were stopped for one of those reasons.

David Mazzo

Thanks.

Ritu Baral – Cannacord

That is essentially – so it’s essentially sort of a multiple choice release. We’re not going to get any granular data or any?

Steve Zelenkofske

That’s right.

David Mazzo

Ritu, we’ll be issuing sort of conclusions from the DSMB at each case in the press release. But we do not plan to distribute the full report of the DSMB. I’m not fist-pumping and at that becomes that rises to the level of materiality. Well, that’s going to be information, we’ll ask Steve and the team to adjust the trial operations. But we will be announcing that.

And I just will remind everyone, especially for the 25% and 50% analysis the DSMB will be conducting a fair amount of statistical analysis for those and the numbers of patients are going to be significant. So, our expectation is, or that it will take them somewhere between four and eight weeks post achieving the milestone for enrollment to actually deliver to us their conclusions.

Ritu Baral – Cannacord

Great. Thanks for taking the questions.

David Mazzo

Thanks Ritu.

Operator

Thank you. (Operator Instructions). Now, we do have a question from Liana Moussatos from Wedbush Securities.

Liana Moussatos – Wedbush Securities

Thank for taking my question and congratulations on your progress. What’s your projected cash runway?

David Mazzo

Hi Liana, good morning. And thanks for the question. Right now we are projecting that with the existing capital we can operate through the step in and through analysis which takes us mostly through the summer about this year.

Liana Moussatos – Wedbush Securities

Thank you very much.

David Mazzo

Okay.

Operator

Thank you. And last question comes from Edward Nash from Cowen & Company.

Unidentified Analyst

Hi guys, this is Jimmy dialing for Edward Nash. I had a question about Triangular (ph), the medicines Triangular (ph) their NDA didn’t go as planned. Is there any material impact that has on your program or how did beneficially effect for negatively impact our ongoing study?

David Mazzo

Good morning, thank you. Thanks for the question, I’m going to turn this over to Steve. We’re all smiling because we actually think that it’s a very positive impact for us on a number of levels. Steve?

Steve Zelenkofske

Yes, thanks Dave. We first of all Triangular (ph) is not our product so we’re not going to make any statements about that. As far as the clinical trial, we believe that our trial is well designed that our employer inside are thought for and clearly will not be impacted by the destruction that occurred at the advisory.

And we think that the outcome of the outer paddle and the FDA’s review solidifies our feeling about the group quality design of REGULATE-PCI and our end-point analysis.

David Mazzo

Right. Now, do you now just add that – remember Triangular (ph) is not an anticoagulant. So, had it been – or if becomes approvable it could easily be incorporated into the upfront therapies that these patients are given prior to be giving an anticoagulant going into PCI. So, the presence of Triangular (ph) or not really doesn’t impact the development of an anticoagulant such as REG1.

Unidentified Analyst

Got it. And one more question. So, the anticoagulant, I think – I thought there were multiple alternatives, I think there was such an unmet need and the fact that you guys got a fast track for REG1 very positive. But is it hard evidence really of the unmet need or how much of it is really what REG1 has to offer.

In other words, there are multiple other epic arguments in development, so with – is it really what REG1 has to offer that is different that’s?

David Mazzo

Thanks for the question. I think that – to some extent your answer is embedded in the question.

The reason we got fast tracked presumably is because the FDA decided that we clearly served their critical unmet medical need and of course the profile of REG1 addresses that. So, yes is, but REG1 has to offer and what it has to offer is something that no other anticoagulant currently available or to our knowledge in development.

If there are any others can offer which is the promise to actually significantly reduce ischemic events, maintain or improve upon the bleeding benefits of the existing products and deliver this in the context of a value equation that should get pharmacological benefits that will drive hopefully overall cost down within the context of the DRG for the procedure.

No other anticoagulant has shown the ability to do that – that was demonstrated in Phase II-B and Radar. And they are well along the way of hopefully to confirm that in the REGULATE-PCI. So, it’s again, just to reiterate, it’s a combination of the fact that by being able to provide that effect of value. And for the first time in more than a decade promise to significantly reduce ischemic events which leads to MI, stroke and death that I believe drove the decision for fast track designation.

Unidentified Analyst

Thanks and congrats on the progress so far.

David Mazzo

Thank you so much.

Operator

Thank you. And there are no more questions at the present time. So we would like to turn the call back over to management for any closing remarks.

David Mazzo

Thank you. And thank you all for joining this morning. We really appreciate your interest. Of course we’re very pleased with the progress to date throughout the company. And we look forward to keeping you updated in the weeks and months ahead, probably our next significant communication will come after we achieve the 1,000 milestone of enrollment and the DSMB conclusions to open up the trial. So thanks again. And have a great day.

Operator

Thank you. This conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

David Mazzo

Thanks. Bye-bye.

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