Regado Biosciences (RGDO) Q1 2014 Results Conference Call May 14, 2014 8:30 AM ET
Tricia Truehart – IR
David Mazzo – CEO
Don Elsey – CFO
Chris Rusconi – Chief Scientific Officer
Steve Zelenkofske – Chief Medical Officer
Michael Metzger – President and COO
Good morning and welcome to the Regado Biosciences’ First Quarter 2014 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions). Please note that this event is being recorded.
I would like to turn the conference over to Tricia Truehart. Ms. Truehart. Please go ahead.
Thank you. Good morning and welcome to Regado's first quarter 2014 financial results and corporate update and financial results call. If you’ve not already received it, you can access the press release and 10-Q filed by Regado at www.regadobio.com under the Investors’ tab.
Leading today’s call is Dr. David J. Mazzo, Regado’s Chief Executive officer. Also joining us on the call today is Michael Metzger, our President and Chief Operating Offier; Dr. Steve Zelenkofske, our Senior Vice President of Clinical and Medical Affairs, and Chief Medical Officer, Dr. Chris Rusconi, our Senior Vice President, Discovery Preclinical Development and Chief Scientific Officer; and Don Elsey, our newly arrived Senior Vice President of Finance and Chief Financial Officer; and Chris Courts, our Vice President of Finance.
Before asking management to begin their presentation, I'll remind you that we will be making forward-looking statements through the call. Any statements that we make today other than historical facts are forward-looking statements made pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements with respect to financial projections, estimates and their underlying assumptions, future performance, the progress of our clinical trials, including the REGULATE-PCI trial, enrollment in our clinical trials, including the REGULATE-PCI trial and the prospects for the completion of our clinical trials, including the REGULATE-PCI trial, and any regulatory approval of our product candidates and the successful commercialization and financial performance of our product candidates is approved.
Please be aware that such forward-looking statements involve risks and uncertainties such as those detailed in our SEC filings, including our 10-K and 10-Q. Any forward-looking statements that we make must be considered in light of these factors. Actual results may vary materially.
And with that, I will give the microphone to Dr. Mazzo.
Thanks, Tricia, and good morning, everyone. Thank you for joining us for the Regado Biosciences Conference Call to discuss to discuss our first quarter 2014 financial results.
It's been a busy several months for the company and much has happened that we wish to highlight.
In order to make our call as interesting and informative as possible, I've invited many of my colleagues on Regado’s Executive Team to speak on the topics most associated with their jurisdiction and expertise. With that in mind, after I've made some summary remarks, Don Elsey will review our financial results, Chris Rusconi will speak to highlights from our preclinical and CMC Group, Steve Zelenkofske will provide the update on REGULATE-PCI, and Michael Metzger will present an overview of our commercial strategy and opportunity as well as corporate development initiatives.
I hope that you'll find this new format useful and appealing as you get to hear from a broader group of experts from the company.
With that said, allow me to summarize several key achievements from the first quarter of this year.
Overall, the Regado team continues to execute impeccably on all fronts, and we remain on track according to our development and business plans. In fact, as a company, our fundamental attributes and assets have never been sounder.
Following the successful pipe-in February, and a recently completed follow-on offering, we have significant reduced the capital needed to reach topline data for REGULATE-PCI at the end of 2015. On the product front, I'm delighted to announce that we have received conditional approval from FDA for a trade name for REG1. Henceforth, REG1 will be known as Revolixys Kit. That's spelled R-E-V-O-L-I-X-Y-S.
Revolixys is derived from the notion of a revolutionary Factor IX inhibiting system, and the term kit refers to the fact that the individual components of REG1 that is pegnivacogin and anivamersen are supplied as individual vials packaged for use together.
Going forward, we will refer to the future commercial product and/or the packaged ensemble as Revolixys Kit. But we’ll often use simply Revolixys to refer generally to pegnivacogin plus anivamersen.
Having explained that, I'll now take this opportunity to remind you all that as previously announced, Revolixys have been granted fast-track status by the FDA, and we are now ardently working to optimize our development plans in order to fully exploit all the benefit to this designation, including the possibility of expedited review.
And finally, as you've heard from the list of executives joining me on the call, we have further strengthened our already experienced management team by the addition of a talented and experienced CFO. We will continue to prudently grow the organization as we progress through Phase III for Revolixys and advance our pipeline, all with the overarching objective of building the next [great] (ph) specialty biopharmaceutical company.
At this time, I will ask Don Elsey, our Chief Financial Officer, to present the first quarter 2014 financial results. Don?
Thank you, David. The financial results for first quarter 2014 are in line with our expectations. For first quarter 2014, R&D expense increased to $13.1 million from $1.7 million in the first quarter of 2013. This increase in spending was driven by the REGULATE-PCI trial. As we continue this trial throughout 2014, we expect similar year-over-year comparisons for R&D.
G&A spending in Q1 2014 was $2.5 million versus $1.4 million in the same quarter for 2013. This increase was driven primarily by the addition of key personnel, as well increased legal, accounting, compliance, and other external spending associated with being a public company.
The net loss for Q1 2014 was $30.7 million, inclusive of a $14.8 million beneficial conversion feature versus $3.3 million loss in Q1 2013. On a per share basis, the loss was $1.30 per share versus $14.87 loss per share in Q1 2013.
Our average shares outstanding for the period increased to 23.5 million shares from 221,000 shares in Q1 2013.
Let me now turn to the balance sheet. Total cash and cash equivalents were $34.8 million, including net proceeds of $18.6 million from the private placement we completed in February, but excluding the proceeds from the follow-on completed in April. The follow-on offering resulting in approximately $57.5 million of net cash after underwriting in offering expenses.
We anticipate our cash resources are sufficient to conduct the REGULATE-PCI trial and corporate operations through Q1 2015.
And with that, I'll hand the microphone back to Dr. Mazzo.
Thanks, Don. I'll now introduce Dr. Chris Rusconi, our Chief Scientific Officer, who will present the highlights from our pre-clinical and CMC group. Chris?
Thanks, Dave. Good morning. I will focus my updates today on the areas of intellectual property, pipeline, and CMC. During the first quarter of 2014, we've had several notable achievements in these areas. I'll begin with an update on our CMC program, and the steps we're taking to take advantage of the expedited review opportunity afforded by the Revolixys fast-track designation.
By way of table setting, we are currently producing pegnivacogin and anivamersen batches using the intended commercial launch processes at the intended launch scale in support of REGULATE-PCI. We're on track to have all formal stability batches for pegnivacogin and anivamersen substance and product up by the end of 2014.
And finally, we're completing plans to pull forward manufacturing process validation into 2015 to move this activity off the critical path for the earliest possible NDA filing in 2016.
Moving on to our pipeline, as we announced earlier in the first quarter, the FDA acceptance of the IND for REG2, the subcutaneous formulation of pegnivacogin with IV anivamersen. We've completed one Phase I study on REG2 and are excited about the potential for subcutaneous administration of pegnivacogin to expand the indication space for this product.
As it relates to REG3, our aptamer control agent pair targeting the platelet-receptor glycoprotein 6, we continued progress this program through the IND stage.
Finally, we’ve recently initiated the discovery efforts focused on identifying aptamers as antidotes oral Factor Xa inhibitors.
The real and perceived risk of bleeding remained one of the critical factors limiting the prescription of this very promising class of drugs for prevention of stroke in patients with atrial fibrillation as well as other indications. Plus, there is a significant unmet need for safe and effective antidotes to these agents. W e believe that a targeted specific aptamer-based solution to this problem affords significant advances over existing development programs ongoing with other companies. These advantages include lack of immunogenicity, lack of interaction with endogenous coagulation pathway components as well as a differentiating mechanism of actions that that will be tuned to the PK/PD profile of the respective Factor Xa inhibitor.
Finally, to conclude this portion of the call, I'd like to provide a brief update on our IP portfolio.
First, as we previously announced in the first quarter, US patent office granted a new patent in the modulators of pharmacologic agent family of patents, which protects our aptamer- controlled agent technology. This patent extends coverage of controlled agents beyond nucleic-acid based modulators to now include peptide, polypeptide, and protein-based control agents for the modulation of aptamer-based anti-thrombotics.
This is an important grant as it expands Regado’s intellectual property portfolio and afford this protection from competing aptamer-based anti-thrombotics designed to employ peptide or protein-based control agents.
More recently, European patent office [screened] (ph) a claim set in the modulator’s family related to the use of locked nucleic acid and other base pairing mediated control agents for anti-thrombotic aptamers.
This patent is analogous to its US patent counterpart and expands our geographic footprint for this patent family. And with this, I'll hand the microphone back to Dave.
Thanks, Chris. I'll now call on Dr. Steve Zelenkofske, our Chief Medical Officer, who will provide the highlights from our REGULATE-PCI trial.
Thank you, David. I'm pleased to report that we remain on our announced schedule for the execution of REGULATE-PCI. As previously announced, we achieved the enrollment milestone of 1,000 patients at the end of the first quarter and were permitted by DSMB to open enrollment in non-STEMI patient group. We've been enrolling all comers PCI patients for more than a month, and are on track to reach the 25% enrollment milestone in DSMB analysis in the early and late summer of 2014, respectively. We expect to reach the 50% enrollment milestone in the fall of this year with DSMB analysis by the end of 2014.
We are now operating in all projected geographies and countries, and are on track with site startup as planned. The protocol has been well received by investigators, and we continue to work as our academic partners at the Duke Clinical Research Institute, C5 Research at Cleveland Clinic, and Mount Sinai to deliver enrollment on time and on budget as projected.
As with all the DSMB analyses, we remain blinded to the data until study completion. As a reminder, the 25% enrollment analysis would constitute a general safety assessment or Revolixys in a population numbering at that time in the thousands. A satisfactory assessment of safety, at this point, we believe de-risk the trial further since we will have to evaluate safety in a number of patients equal to or greater than in number evaluated in most NDA submissions and other therapeutic areas.
The DSMB announcement at that time will be limited to the continuation of the study. To be clear, we will not receive any unblinded data at that time and will not be in a position to release any data to the public. A full interim analysis will be performed after 50% of the subjects have been enrolled and completed follow-up.
We expect to reach the enrollment milestone in the early fall and have the DSMB analysis completed by the end of the year.
Producing data from the 50% of the patients enrolled, the DSMB will perform a general safety look and more importantly an efficacy evaluation as defined by the protocol.
There are several possible outcomes from this DSMB analysis. The most likely outcome in our estimation is that the DSMB will determine that we can exclude futility and should complete the trial as planned. It should be noted that futility can only be excluded in this analysis if Revolixys is trending positive at that time against the comparator for the primary efficacy end point. In lay terms, we have to be winning at half time in order to be able to complete the trial as planned. As part of the interim efficacy analyses, the DSMB will also evaluate efficacy. If the (inaudble) data for Revolixys meets stringent, pre-defined overwhelming superiority criteria, a positive outcome could be declared early and job considered completed at that time.
While this outcome is within the realm of statistical possibility, by design is not the expected outcome at the interim analysis. In addition, since REGULATE-PCI is in adaptive design study, a sample size reestimation will be performed after 50% of the patients are enrolled.
This approach allows for additional patients to be added to the study at the overall (inaudible) of the primary endpoint is lower than what we projected when designed in the study. However, we don't expect us to be position to add patients since the ischemic event rates in studies like this have remained essentially constant over the last 10 years.
However, this well-accepted approach will ensure that study maintains the power to assess the primary endpoint at completion.
So to reiterate, our expectation of the 50% is the received recommendation to continue to trial completion as planned with futility excluded and with the goal of completing enrollment in the fall of 2015 as a top line data by the end of 2015.
Thank you, Steve. If you can all hear from Steve's summary, the Regado team continues to execute smoothly and on schedule for REGULATE-PCI and we are more confident than ever of our ability to complete the trial according to plan.
Finally, I'll pass the microphone now to Michael Metzger, our President and Chief Operating Officer and Michael will provide a summary of our corporate and business development highlights.
Thanks, Dave. As my colleagues have explained, Regado is off to a fantastic start to 2014. We are not only pushing forward aggressively with REGULATE-PCI but also with a number of important corporate initiatives and that building the next breakout in specialty pharmaceutical company.
First, essential to our business strategy is our intent to commercialize Revolixys in the United States and key partner for ex-US development in sales and marketing. Our strategy is driven by the significant global market opportunity in PCI and other potential high-growth indication NSTEMI, open-heart surgery and TAVI, also known as TAVR.
Remember, all current products are non-inferior to each other. While we, on the other hand, expect to have the only product level for superiority in efficacy in PCI.
Here are some perspective on the PCI market. Possibly, 3 million procedures are performed around the year – per year around the world and approximately 800,000 of these are done in the United States.
Based on extensive third-party market research and secondary data sources, we estimate the total market for Revolixys including PCI plus the other near-term indications to be greater than $7 billion worldwide by mid 2020.
With the help of leading consultancies, we have conducted extensive market research with US and ex-US based physicians in Paris. And as concluded that Revolixys is well positioned to deliver the key features wanted in the optimal, injectable and the coagulant.
The most important features are – number one, reduction in death, heart attacks and strokes as a measure of improved efficacy while simultaneously maintaining the low risk of major bleeding.
Number two, true dynamic position control of the anti-coagulation effect to improve patient care.
Number three, improved dosing and procedure efficiency.
And number four, pharma economic benefits including a shorter length of stay in the hospital and a lower rate of rehospitalization.
With the paradigm changing product profile in hand, our research supports that Revolixys could command market share approaching 50% and upwards of $3 billion in annual net sales on a global basis. And importantly, we project annual net sales of Revolixys in the United States for PCI alone to reach more than $1 billion in the mid 2020.
There is presence for other small companies like Regado to build a US-based sales and marketing organization on the back of a potential blockbuster hospital franchise product. With several potential indications, we see Revolixys as many products in one and we can leverage to build a highly profitable company and we intend to continue to evaluate the various opportunities to partner Revolixys with the best positioned pharmaceutical companies in this space over the next several months as we achieve our milestones and execute as planned.
In addition to Revolixys, I would also like to highlight two significant opportunities in our early stage pipeline, REG3 and a specific factor REVERSAL programs.
REG3, our most advanced preclinical program and one that is completing IND-enabling activities is directed toward a very exciting novel target upregulated in many inflammatory processes, GP6. It could be our first molecule directed non-cardiovascular, hospital-based orphan indications, which are of interest both because of the obvious unmet medical need and our ability to bring this through development quickly at a very manageable cost.
Our Factor Xa inhibitor reversal agents are being developed as specific reversal agents – the leading factor, oral factor, Xa inhibitors in the category. We expect that these programs will have high potential value to certain key partners and we are exploring the opportunity to work with each of them.
Another pillar of our corporate development strategy is educating physicians throughout the world about the serious unmet need in the area of PCI and anti-coagulation broadly. The critical need for better efficacy is a new anti-coagulant that's supported by the growing body of evidence is amplified by the results of the [euromax grade 4, naples 3, and heap PCCI studies].
This new data reinforces our assessment of the promise of Revolixys to become the optimal injectable anti-coagulant and the agent of choice worldwide.
And I'm pleased to announce that with the support of our medical advisors and interventional cardiologists throughout the world who are excited about the promise of Revolixys, we are launching a series of major workshops and symposia to be offered at major medical meetings later this year to build the awareness needed to support the commercialization of this ground-breaking acute care cardiovascular job in the next few years.
We continue to believe that Revolixys presents a very substantial commercial opportunity that will be a category leading anti-coagulant.
Thanks, Michael, and thanks to the audience for your attention. As you can see it's been a busy first quarter for us. And at this point, we'd like to take questions from the audience.
Thank you. We will now begin the question-and-answer session. (Operator Instructions). At this time, we will pause momentarily to assemble our roster.
The first quarter question will come from Robyn Karnauskas of Deutsche Bank. Please go ahead.
Hi, guys. This is Evan on for Robin. Congrats on a continued progress with REGULATE-PCI. You know it's nice to see you Michael last week at our conference.
One quick question on the patent, does this include the entire pipeline, and does this change the patent expiration of Revolixys?
So, to the two questions – no, the modulators patent essentially cover all the products in the pipeline that use control agents with aptamers.
So, that would include REG3, REG2, REG1.
That would be everything.
The patent expiry – the modulators cases are earlier than the patents that cover Revolixys kit, so not it doesn't extend the patent life of Revolixys.
And would you say that the – I guess what happened in Europe is kind of the same thing in the United States in terms of including the entire pipeline and not really changing the patent expiration of Revolixys?
That's absolutely correct, Even. Essentially what's happening in Europe is we're now getting grants that we've already received in the United States, and so we're basically building a mirror image patent protection in Europe consistent with what we already have in the United States.
Excellent. That's all I got. Thank you guys.
(Operator Instructions). I'm showing no additional questions. This will conclude our question-and-answer session. I would like to turn the conference back over to Dr. David Mazzo for any closing remarks.
Thanks, everyone, for joining us on the call today. I know we gave a lot of summary information and we hope you found the new format helpful. As you were able to hear over the phone this morning, we are both very pleased and very excited by the progress that's been made to date throughout the company and we look forward to keeping you updated in the weeks and months ahead. Thanks again for your time and good day.
Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.
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