Ohr Pharmaceutical Inc (NASDAQ:OHRP)
Q4 2015 Earnings Conference Call
February 09, 2016 05:00 PM ET
Michael Wood - IR
Jason Slakter - CEO
Sam Backenroth - CFO
Avner Ingerman - Chief Clinical Officer
Tyler Van Buren - Cowen & Company
Jonathan Aschoff - Brean Capital
Elemer Piros - Roth Capital
Greeting and welcome to the Ohr Pharmaceutical First Quarter 2016 Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host Michael Wood. Please go ahead.
Good afternoon everybody. After the market today Ohr released financial results and provided a business update for the quarter ended December 30, 2015. If you have not yet receive the release, it is available on the Investor Relations section of the company’s website at www.ohrpharmaceutical.com. This call is being webcast and reply will be available on the company’s Web site.
Before we begin, I’d like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words of expression reflecting optimism, satisfaction and current prospects, as well as words such as believe, intend, plan, expect, anticipate, and similar variations, identify forward-looking statements, but their absence does not mean that the statement is not forward-looking.
Such forward-looking statements are not a guarantee of performance and the company’s actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the company’s most recent 10-K, and subsequent 10-Q form as well as additional filings with the SEC.
These forward-looking statements speak only as of the date of this release and conference call, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release.
Participating in today’s conference call from the company are Dr. Jason Slakter, CEO, Dr. Avner Ingerman, Chief Clinical Officer, Mr. Sam Backenroth, CFO.
With that, I’d like to turn the call over to Dr. Slakter. Please go ahead, Dr. Slakter.
Thank you, Michael. Good afternoon everyone, and thank you for joining us today. The main purpose of this call is to give you an update on our lead development candidate Squalamine Lactate Ophthalmic Solution or OHR-102 which is in the clinic for the wet form of age related macular degeneration or wet-AMD. We also have some news from one of our pipeline products which I go over briefly. Dr. Ingerman will provide an update on SPA of Phase 3 trial and then Sam Backenroth, CFO will review the financials.
It hasn’t been long since our year-end call in December where we went over the impact date and our strategy for OHR-102 in a lot of details. I think it will be helpful at this point to summarize the highlight of that discussion as it helps put in context the important conclusions from the clinical data generated so far, the implications for the Phase 3 program and ultimately the addressable market and commercial opportunity for OHR-102.
Last year, we've successfully completed the Phase II IMPACT study in patients with treatment in our wet-AMD demonstrating a positive and clinically meaningful treatment effect with OHR-102 combination therapy. Our approach to designing the impact trial was to conduct and exploratory Phase II trial with the broad inclusive population with the goal of identifying patients who are the most likely to benefit from combination therapy. In addition to evaluating the primary and secondary end points in the overall treatment population, we conducted a series of analysis on the IMPACT data and we reported these various large scientific meetings through 2015 most recently at the American Academy of Ophthalmology meeting in November.
We looked initially at those patients with classic containing lesions which had been a prospective way to find sub-group in the IMPACT trial. In this group patients, we saw and improvement in visual acuity for the OHR-102 plus Lucentis combination compared with Lucentis mono-therapy across all visual outcomes. There was a clinically meaningful six letter additional mean gain in vision at month nine in the combination group compared to the Lucentis mono-therapy patients. We also saw a 57% increase in the proportion of patients gaining three or more lines in vision in those receiving OHR-102 combination therapy. The positive effect on visual in these class containing illusions were seen early in the course of treatment and continues to increase through the end of the study.
Further analysis of lesion characteristic and their productive effect on visual acuity outcomes demonstrated that it was the size of the occult CNV irrespective of the presence or size of the classic CNV component that was the strongest predictive factor of treatment success with the combination OHR-102 plus Lucentis. Specifically, in those patients where the occult CNV was less than 10mm2, a positive visual acuity benefit in both mean gain in vision and the proportion of patients gaining three or more lines in vision we seen in the OHR-102 combination treatment group versus the mono-therapy treated patients.
These analysis have obvious implications for the design of our Phase 3 trials and also the size of the market opportunity for OHR-102. These positive visual acuity results represent a clinically meaningful effect on visual function and are also acceptable visual acuity end points for regulatory authorities. Patients with the occult CNV less than 10mm2 represents 75% to 80% of the overall AMD patient population seen in clinical practice today. To give a little more detail on our clinical program and our progress on the Special Protocol Assessment we submitted to FDA, I would like to turn this over to Dr. Avner Ingerman, Chief Clinical Officer at Ohr, Avner?
Thank you, Jason. As you may know I was previously the clinical lead at the General Pharmaceutical, responsible for the [indiscernible] clinical Phase 3 program in wet-AMD and Retinal Vein Occlusion, which led to a very successful commercial product. I'd like to begin with how excited I am to be part of the Ohr team as we embark on this Phase 3 program to evaluate the effect of OHR-102 also known Calamine Lactate Plutonic Solution 0.2%, a typical multi-target inhibitor and its ability to improve vision outcomes. As an ophthalmologist by training, I understand the great unmet need that OHR-102 will address as well as the tremendous commercial opportunity it represents.
We have received guidance from the FDA that allows us to proceed to Phase 3 with the primary efficacy end point of filing at nine months. Importantly, the nine months primary end point is of the same duration as our Phase 2 study which we believe further reduced the [indiscernible] in the Phase 3 program. Each of the assumed Phase 3 trials have been designed to enroll approximately 650 patients with newly diagnosed treatment in our CNV [indiscernible] due to AMD. Patients will be randomized in a ratio of one-to-one to receive either topical OHR-102 twice a day or placebo eye drops twice a day for the full two years of the study. All patients will receive monthly Lucentis injections for the first year and then criteria based PRN Lucentis injections in the second year.
We submitted a special protocol assessment for SPA to the FDA in November and the agency has since responded with comments which look very helpful and positive. We’re actively working to complete the SPA process with the agency and once we have finalized the SPA, we plan to begin enrolling patients in the current quarter.
In parallel with the FDA discussions we are in the advanced stages of building and finalizing the infrastructure required for the successful high quality execution of the study. We have submission the global partner CRO to manage the all process long side our clinical team. We identified a very large number of sites that had the capabilities and desire to be in the study and we are contracting clinical investigators on sites for the Phase 3 program. Our goal as we have said is to commenced enrollment in the current quarter. The team at Ohr is looking for to a successful execution of the OHR-102 Phase 3 program.
And with that let me turn things back to Jason.
Thanks Avner. The other important piece of news that came out in the first quarter was that we announced positive pre-clinical results from one of the SKS Ocular drug candidates. As you know, we have a pipeline of pre-clinical sustained release drug product candidates that address ocular indications including glaucoma, ocular allergy, and retinal disease. These candidates together with our proprietary sustained release platform were acquired with the assets of SKS ocular in 2014.
There is a particular challenge in achieving sustained levels of a therapeutic drug in the ophthalmic setting. And our goal here is to provide sustained and predictable release of a drug both small molecules and biologics over three to six months period. In December, we’ve reported sustained super therapeutic concentrations of a drug in target ocular tissues in an animal model. These pharmacologically active concentrations were present that all time points in the study and are indicative of a long acting and prolonged release delivery system.
We see the results of this study as an important validation for our SKS sustained release technology and we plan to present them in more detail at a medical meeting during 2016. We will keep you updated as we move forward with this program.
Now I would like to ask Sam provide additional detail on the financial results we just reported. Sam?
Thank you, Jason. For the first quarter ended December 31, 2015, total operating expenses were approximately 3.6 million, made up 1.2 million in general and administrative expenses, 2.1 million in research and development expenses and 0.3 million in depreciation and amortization. This compares to approximately 3.9 million in total operating expenses in the same period in 2015 consistent of 0.8 million in general and administrative expenses, 2.8 million in research and development expenses and 0.3 million in depreciation and amortization.
For the first quarter of 2016, we reported a net loss of approximately $6.1 million or $0.20 a share, compared to a net loss of approximately $4.6 million or $0.18 a share in the same period last year. At December 31, we had cash and cash equivalents of approximately 25.3 million, up from approximately 10.4 million at December 31, 2014. For a more detailed description of the financials, I would encourage you to refer to our 10-Q, which should be filed shortly today.
That completes my review of the financials. We’ll now open up the call to questions. Operator?
Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Tyler Van Buren with Cowen & Company. Please proceed.
Tyler Van Buren
With respect to the ongoing review of the SPA, you mentioned that you received helpful and positive comment. So we’re just hoping to potentially get a little more color on perhaps some of the back and forth with the agency and anything you could give us on the comments? Specifically you mentioned you receive guidance with respect to the primary efficacy end point of nine months. Are you referring to the guidance that was received a year ago or is there something new there also on the primary end point, I noticed that you mentioned visual acuity improvement? Are you still kind of going back and forth between three line gains or mean visual acuity, any commentary would be helpful. Thanks so much.
I’ll take the first part, its Jason and turn it over to Avner to kind of wrap up. I think one thing to clarify is we do not mean to imply in any way that the interaction with the FDA on the SPA has to do with any of the end point issues. That has been discussed in the past and had been understood their guidance very clearly with regard to both nine months primary end point as well as potential visual acuity end points.
Clearly there are two well-known visual acuity end points, as you pointed out that is proportionate three line gainers, it means gain in visual acuity and we have not given guidance but the endpoint will be a visual acuity gain that’s more recognized by the agency as clinically meaningful and achieving statistical significance in our design. As far as the specific comments I mean Avner can jump in but they've been very positive and helpful in designing and we've been pleased with the interaction, Avner if you want to?
Yes, just wanted to add that the -- we mentioned that the comments we received back from the FDA were very positive. They are very much in line with our previous conversations or the conversations that we had with the FDA. This is very much [indiscernible] based on our previous understanding and agreements with FDA and we continue to work to finalize the, call it the fine details.
Tyler Van Buren
Just to clarify whether do you mean visual acuity or three line gainers you guys have already made up your decision on that but you'll let us know once you hear back on the SPA or start the Phase 3 clinical study?
Again you will hear about it shortly, it's for business reasons we haven't disclosed it but that is not part of the interaction with that, that’s already been agreed to with the agency.
Tyler Van Buren
Okay, understood and just lastly on cash expected burn moving forward how long the existing cash would take you. And just an update on your thoughts around the potential financing would be helpful.
Yeah so in terms of the cash burn obviously that’s going start to move up significantly as we move clinical Phase 3 program, again which we expect during the current quarter. So, previously about 2 million to 3 million a quarter but that’s going to move up significantly. In terms of financing, we have multiple financing options available to us and we are really confident based on the positive data from the Phase 2 study, the risk mitigation we have in the Phase 3 to go ahead with initiation of Phase 3 program and then our business development processes are going to yield a successful outcome and provide us with capital for the Phase 3 program.
Thank you. Our next question comes from Jonathan Aschoff from Brean Capital. Please proceed.
Thanks. I was wonder guys if you will start the Phase 3 with or more importantly if you don’t have SPA will you start it and the same question, will you start it with or without a partner there to fund. I am assuming far more than half of it?
The simple answer to that is, we are confident in where we stand on our business development process and move forward with the initiation of the Phase 3 program as planned.
And the SPA is not gating for partner, no?
No, not at all.
And the current talk that we know, you were just talking about before is that in any way about the included patient population, you know 10mm2 or less kind of area?
No, the discussion that we’re having is on more just general details, but nothing with regard to any of the big features like the inclusion criteria or anything, all that was previously discussed and agreed to and it's more about more of the details. You might imagine providing a document that’s about 100 and some pages long, plus is going to engender some specific questions and as soon as those details are worked out, we’ll be ready to move forward.
Thank you. Our next question comes from Elemer Piros with Roth Capital. Please proceed.
Yes good evening Jonathon and Tyler asked part of my SPA related questions. So, this time I just have a minor shot [ph] left here. I can't seem to figure out a trend in your G&A expense line, it was 3.6 million, 1.5, 2.2, now it's 1.2 could you provide some guidance going forward whether it would stabilize at certain level?
Well I mean part of the fluctuations you are looking at our non-cash items like stock options expense depending on the quarter. Obviously, you’re going have some that higher and some that are lower and [technical difficulty] it’s on the amortization that starts to flatten out overtime. So, that’s what you are looking at in terms of the fluctuations of the G&A. I would say as an overall comment that the cash expenses on the G&A side are going to continue to ramp up. I would say certainly not as significantly as you would see on the R&D side, but we would expect that to continue as we build out the infrastructure at OHR to support the Phase 3 as well as to support the commercial infrastructure and the corporate infrastructure as well.
There are no further questions. I would like to turn the call back over to Dr. Slakter for closing comments.
Thank you operator. In closing, I want to thank the entire team at Ohr for the continued commitment and drive to our mission and look forward to a very busy and exciting 2016 with the Phase 3 Trial ramping up, ongoing efforts in data point on our sustained released platform technology and continued corporate progress. We will be presenting at the Lernaean [ph] conference this Thursday in New York and I look forward to seeing some of you personally at that meeting. Thank you all for being here and have a good evening.
Thank you. This concludes today teleconference you may disconnect your lines at this time and thank you for your participation.
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