Nabriva Therapeutics (NASDAQ:NBRV)
Q4 2015 Earnings Conference Call
April 27, 2016 8:30 AM ET
Will Sargent - Vice President Commercial Strategy and Investor Relations
Colin Broom - Chief Executive Officer
Elyse Seltzer - Chief Medical Officer
Ralf Schmid - Chief Financial Officer and Chief Operating Officer
Steven Gelone - Chief Development Officer
Alan Carr - Needham & Company
Adnan Butt - RBC Capital Markets
Kevin Kedra - Gabelli
Good morning ladies and gentlemen. Thank you for standing by and welcome to the Nabriva Therapeutics full year 2015 earnings call. At this time all participants are in a listen-only mode. Later we’ll conduct a question and answer session and instructions will follow at that time. Please be aware that today’s conference call is being recorded.
I’d now like to turn the conference over to your host Will Sargent, Vice President Commercial Strategy and Investor Relations. Please go ahead sir.
Thank you, operator and good morning everyone. Our earnings press release across the wire [ph] earlier today provides a corporate update and details and reviews financial results for the full year ending December 31, 2015. Press release is available on our website at www.nabriva.com. In addition, today’s call is being webcast live on our website and will be available to replay.
Joining on the call today are Dr. Colin Broom, Chief Executive Officer; Elyse Seltzer, Chief Medical Officer; Steven Gelone, Chief Development Officer, and Ralf Schmid, Chief Financial Officer and Chief Operating Officer. Colin will begin this morning’s call for a brief overview of the corporate and clinical achievements that were accomplished in 2015 and Elyse will provide an update on our clinical progress. Ralf will then review the financial results for the full year and Colin will close with our upcoming milestones before opening the call for your questions.
Before we begin, I’d like to remind you that we’ll be making certain forward looking statements on today’s call, including statements about future expectations regarding clinical developments, regulatory and commercialization timelines, the potential success of our product candidates and financial projections. These statements constitute forward-looking statements for the purposes of Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any of our forward-looking statements.
I’ll refer you to our SEC filings, and in particular, to the Risk Factor section of our Annual Report on Form 20-F, which will be filed subsequent to this call for a detailed description of the risk factors affecting our business. In addition, any forward-looking statements represent our view only as of today and should not be relied upon as representing our views as of any subsequent date. We may elect to update these forward-looking statements at some point in the future, so we disclaim any obligation to do so even [indiscernible] change.
I’ll now turn the call over to Colin.
Thank you, Will, and good morning, everyone, and thank you for joining us for our 2015 financial results conference call. We set some ambitious goals for ourselves in 2015. And as I look back over the year, I’m delighted at how much we’ve accomplished. Nabriva achieved significant financial milestones in 2015 to support our goal of developing and commercializing the first systemic antibiotic with a novel mechanism of action for the treatment of moderate to severe community-acquired bacterial pneumonia in over a decade.
In April last year, we completed the Series B financing to secure $45.6 million, and in September we closed a successful initial public offering with $92.4 million in net proceeds. We believe that net proceeds from of the IPO together with our cash resources will be sufficient to fund our operations through the receipt of top line clinical data from the Phase 3 CABP development program, which are anticipated in the second half of 2017.
The company continued to make substantial clinical progress this past year, with our lead product candidate lefamulin, including the third quarter initiation of our first Phase 3 clinical trial entitled Lefamulin Evaluation Against Pneumonia or LEAP 1. LEAP 1 is the first of two global registrational Phase 3 clinical trials in patients with moderate to severe CABP. Before initiation of LEAP 1 last year, we reached an agreement with the U.S. FDA on the trial designed through a special protocol assessment of SPA.
Following some very positive interaction with the FDA, we received agreement on an amendment to the LEAP 1 SPA, which Elyse will go over in more detail shortly. I’m also pleased to say that we also recently initiated our second Phase 3 CABP trial, LEAP 2. In addition to the financial achievements Nabriva accomplished in 2015 we also significantly strengthened our leadership team and our organization.
So 2015 was an exceptional year of accomplishments for Nabriva, and I believe that 2016 will build upon the momentum [indiscernible]. I will highlight the key upcoming milestones we are focused on this year towards the end of our remarks.
But first I would like to turn the call over to Elyse for a clinical update. Elyse?
Thank you, Colin, and good morning, everyone. As Colin mentioned, in the fall of 2015, we initiated our LEAP 1 clinical trial. We have had positive ongoing dialogue with the FDA regarding details of the design of both of our Phase 3 global registrational CABP trials and in March we submitted an amendment to the SPA for LEAP 1 in order to modify some of the elements of the design. Earlier this month, the Agency agreed with our proposed amendment to the SPA.
Before I discuss these agreed upon modifications, let me briefly summarize the trial design. LEAP 1 is a randomized, double-blind, active controlled trial of adults with moderate to severe CABP, which we have defined as a PORT Score of at least 3. The trial is being conducted at more than 100 centers globally and consists of patients randomized in a one to one ratio to either lefamulin or moxifloxacin with potential addition of linezolid to the moxifloxacin arm in those patients thought to have CABP due to methicillin resistant staph aureus or MRSA.
The trial is stratified according to multiple criteria, including PORT Score, whether patients were enrolled in the US or rest of world, and whether patients had a prior dose of antibiotics versus no prior antibiotics. A minimum of three days dosing is required before any patient can be considered for transition from IV to oral therapy. The primary objective of the trial is to establish the non-inferiority of lefamulin to moxifloxacin for both FDA and EMA endpoints.
The FDA endpoint requires the demonstration of non-inferiority of lefamulin with respect to early clinical response in the intent to treat population. The early clinical response visit takes place between 72 and 120 hours after the first dose of study medication. The EMA endpoint requires a demonstration of non-inferiority with respect to the investigators’ assessment of clinical response, a test of cure in the modified intent to treat and clinically evaluable populations. The test of cure visit occurs 5 to 10 days after the last dose of study medication.
The main modification to the LEAP 1 trial design is regarding the non-inferiority margin. Based on discussions with the FDA and because of the severity of disease in the patient population in LEAP 1, the FDA has agreed to avoid to a change in the non-inferiority margin from 10% to 12.5%, this modification in non-inferiority margin results in a smaller sample size requirement from 738 patients to as low as 550 patients while maintaining greater than 90% power. This modification does not change the 10% non-inferiority margin of the EMA primary endpoint and retains 80% power.
This is in contrast to the LEAP 2 trial design, where we are studying a slightly less severe patient population and which has a 10% non-inferiority margin. An additional modification to the LEAP 1 design affects dosing regimens. We have simplified the treatment regimens to seven days lefamulin versus seven days moxifloxacin, unless the patient has confirmed MRSA pneumonia in which case treatment will be extended up to 10 days and the comparator arm would be linezolid.
LEAP 2, a similar end-design to LEAP 1 with some exceptions. In LEAP 2, patients would be randomized to receive five days of oral lefamulin or seven days of oral moxifloxacin. The patient population will be adults with CABP of moderate severity, which we have defined as a Port Score of 2 through 4. The non-inferiority margin is 10% for both the FDA and EMA endpoints. Both trials are designed to be consistent with the FDA and EMA guidance.
I would now like to turn the call over to Ralf to review financial highlights.
Thank you very much, and good morning, everyone. Even though our financial statements are reported in euro, I will discuss our 2015 financial results in U.S, dollars, since beginning in the first quarter of 2016, we are changing our functional currency to U.S. dollar and will begin reporting our results in U.S. dollar. We are changing our reporting currency because of the significant U.S. dollar cost we are and will be incurring for our Phase 3 trial and due to increased U.S. presence.
For the year ended December 31, 2015, Nabriva recorded a net loss of $31.2 million or $29.53 per share. This compares to a net loss of $40.6 million or $44.87 per share for the year ended December 31, 2014.
Research and development expenses increased by $14.9 million from $7.7 million for the 12 months ended December 31, 2014 to $22.6 million for the 12 months ended December 31, 2015. This increase was primarily due to higher cost related to preparation for our Phase 3 clinical trial for lefamulin.
General and administrative expenses increased by $4.7 million from $3.2 million for the 12 months ended December 31, 2014 to $7.8 million for the 12 months ended December 31, 2015. This increase was primarily due to higher professional service fees related to our initial public offering and an increase in staff costs related to the addition of employees in the U.S.
As of end of December 2015 Nabriva had $111.5 million in cash, cash equivalents and investments on the balance sheet compared to 2 million as of December 31, 2014. As of December 31, 2015 there were 2,115,778 common shares outstanding and as a reminder our American Depository Shares or ADS trade on the NASDAQ and each ADS equivalent to 1/10 of a common share.
With this I will turn the call back over to Colin.
Thanks, after the 10 years with Nabriva our CFO and Chief Operating Officer Ralf Schmid has decided to leave the company to pursue other opportunities. I would like to take a moment to thank him for the great leadership and outstanding contribution he has provided to Nabriva since its inception and I wish him well in his next endeavor. Ralf has agreed to stay on all through the end of May to transition financial operations possibilities to a new U.S. based CFO we expect to announce within the next few weeks. Ralf will also continue to consult the Nabriva through the end of August. Thank you, Ralf.
As we commented this morning, 2015 was a year of significant achievement for Nabriva. We successfully raised capital to further advance our product development pipeline, expanded and strengthened our entire team and progressed our lead product candidate Lefamulin [indiscernible] global registration of Phase 3 LEAP clinical trailing. Already in 2016 we’ve accomplished significant milestone with the initiation of our second Phase 3 trial LEAP 2. We continue to control patients into our global phase 36 development program and plan to conduct a blinded increment analysis of LEAP 1 after 60% of patients have been enrolled. Our goal is to achieve this enrolment milestone in the fourth quarter of 2016 and subsequently check our assumptions due to the terminal sample size of the trial.
Looking forward to next year, we continue to expect top line data from our Phase 3 program in the second half of 2017. Assuming that we have positive data, we plan to submit our NDA to the FDA and also EMA to the European Medicines Agency in 2018. Right now, we are focused on development of Lefamulin in CABP. However, at a future time we tend to pursue development of Lefamulin in the treatment of acute bacterial skin and skin structure infection for which we previously generated positive data in a randomized Phase 2 clinical trial. We' also see an opportunity with Lefamulin for pediatric use and are progressing with the development of pediatric formulation.
Our pipeline opportunities in close BC-7013, a semi synthetic pleuromutilin compound that has completed Phase 1 studies with the potential to be developed the total treatment Gram-positive infections. In addition we continue to value other candidates from our research program. We also continue to evaluate potential business development opportunities that would leverage and complement our anti-ineffective development pipeline.
2016 is off to a strong start as we continue to build upon the momentum from the past year. It truly please with the evolution of the company this far and expect to drive efficient enrolment in patients into our clinical trials in order to continue progress towards our goal of successfully developing a noble, best in class antibody for systemic use that addresses an unmet need in the treatment of patients suffering from moderate to severe CABP.
We believe that Lefamulin’s noble mechanism of action targeted spectrum of activities cath pathogens and important activity against multi-drug resistance bacterial strains representing important growth in the treatment of patients with serious infection.
And with that I will turn it back over to the operator for Q&A. Go ahead operator.
Thank you. [Operator Instructions] and our first question comes Alan Carr from Needham & Company. Your line is open.
Thanks for taking my question. I wonder if you can comment a bit more about the changes in non-inferiority margin guidance has 12.5% and it’s now. I wonder if you can comment on why it was 10 in the first place and it sounds like you’re keeping the same timelines for the interim analysis and final results. I wonder if you could elaborate on that whether or not your estimates are conservative, thanks.
Yes thank you Alan and good morning to you, thanks for the question. So yes, I will ask Elyse to elaborate on our discussions with the FDA and the rational.
Sure, so I think you’re right the guidance has both - and through our engagement in dialogues with the FDA it became clear that they had strong feelings around aligning the non-inferiority margin with the severity of the targeted population. So our initial Phase 3 study that we focused on was the IV to oral oral, which we had initially thought would be the larger of the two studies turns to non-inferiority margin 10% and the original sample price assumptions when we were engaging with the agency around the designing concept of our second Phase 3 trial which is oral only. It became clear that the agency has the preferences and obviously the oral only study is the slightly less severe patient population based on feasibility, based on what’s appropriate medical care and it was a great opportunity given that drug development is somewhat fluid to accept their comments on our oral study, but also accept our comments and their philosophy and their thinking and provide the IV to oral study, so that our overall program remains relatively the same size that we had originally planned. In response to the timeline question I think our timeline is now based on best current thinking. We are very much focused on what we need to deliver in the next year. So right now we are looking to complete at least 60% enrolment in the fourth quarter and working towards the interim as well and we still are on target to deliver our result second half of 17.
So would you say that the FDA had become a bit more flexible or maybe that you all just hadn’t taken advantage of maybe the opportunity to go for a higher non-inferiority margin in the first round, can you comment on that?
Maybe I’d just comment from outside and Elyse can elaborate. I think you could say that the FDA’s thinking has clarified or evolved somewhat and it’s pretty clear from our interaction that the sick are the population the wider the non-inferiority margins is allowed. And we just came about in our dialogue around the second study which we had frankly anticipated might be a little smaller from the first study, but it was very clear since these are less sick patients if you like you need to intense non-inferiority margin. That opened the door engaging dialogue around the first study again and we took advantage of that, opened the door, took advantage and took very positive outcome.
Okay good and then around other patient populations here, you mentioned that you’re looking into I think pediatric formulation, can you give us a sense of - a timing around that, would you be studying this drug in patients while the community pneumonia trials are underway or that be something after approval?
Well as you know Alan we have to agree a pediatric development program with FDA and EMA need the pediatric investigational plan. So we are in the process of putting that together. The founders are highly - those water-soluble drugs and so we work on formulation, but we would anticipate maybe starting some pediatric work before the submission, but that again needs to be agreed with the agencies. So it will improve, it will obviously subsequent approval.
Okay thanks very much.
Thank you and our next question comes from Adnan Butt from RBC Capital Markets. Your line is open.
Hi good morning everyone thanks for the question, I will have two here. First, could you clarify how many patients now you expect to enroll for the IV versus the oral only dose and then does this amendment impact the intactness of the SPA at all.
Adnan good morning thanks for the question, so I will ask Elyse to elaborate.
I’m sorry Adnan I had a little bit of trouble hearing you, I apologies. Could you repeat your question, it just came over a little bit muffled.
Sure just rough estimates for enrollment expectations and in LEAP 1 versus LEAP 2.
Sure, so LEAP 2 should be around 740 patients. LEAP one would be at least 550 patients.
Okay. And then, the amendment does - keeps the SPA intact?
So I think I understand what you’re asking. So the amendment is agreed with the FDA. We have agreed the special protocol assessment. There’s a process within the FDA to amend your spot, we use that process and the FDA gave us agreement. So effectively we have the same level of agreement that we did before we did the amendment, just on revised assumptions.
Okay. And then, last one here. I just missed it. You discussed protocol or dosing simplification. Was that for LEAP 1 or only LEAP 2?
That was LEAP 1. Everything we discussed in terms of modification was around LEAP 1. LEAP 2 was not part of the amendment discussions. It was - the special protocol assessment is only for the first IV to oral LEAP 1.
And Adnan just maybe I could just elaborate on the question perhaps, just to be clear, the population in LEAP 1 is intact. It’s not like we have to start again or anything, just to make that clear. It is intact and our performance population is as low as 550 [indiscernible] and we will be looking at to test our assumptions into the study, but 550 is the minimum number that we will have in the first study.
Okay. Thank you.
Thank you. And our next question comes from Heather Behanna from Wedbush Securities. Your line is open.
Hello, this is [indiscernible] I was going to ask if you can comment on any of the patients were dosed for five days and why the change to seven? Thank you.
Okay. The study was initiated - LEAP 1 study was initiated with the five days dosing, and of course, that doesn’t affect the FDA endpoint which is from three to five days. So Elyse, would you like to comment on the -
Yeah. I mean, to the extent that word will not really commenting on enrollment other than to say that you can’t implement and amendment until after is agreed. So I imagine that yes, there will be patients who are enrolled in the study under the original amendment that the primary endpoint and the primary analysis remains what it is. And I’m sorry was the second half of your question the rational for changing? And so, I guess, if you have been at any of our earlier presentations, we had various dosing scenarios. We had dosing scenarios, if you have pneumococcus bacteria, if you have [indiscernible] pneumonia and the initial feedback we started to get from site specifically the pharmacies and our IBRS system was that actually what we created was fairly complex and dialogues and review of the literature and speaking with some of our thought leaders, it became that there is lots of - five or seven days or seven or 10 days. So what we elected to do was simply streamline the number of options and simplify the randomization scheme based on what particular pathogen or presentation the patient has. It was really a matter of simplifying the execution at the pharmacy at the site level. So all of our treatment regimens still remain within guidelines and recommended treatment and have been found to be acceptable by the regulators we spoken to, both in the U.S. and in Europe.
Yeah. And in the second study, of course, it is five - seven days in moxifloxacin and of course, all these patients will be treated similarly in the intent to treat analysis.
Okay. Thank you.
Okay. Thank you. And our next question comes from Paul Metis [indiscernible]. Your line is open.
Hi. This is Jeffery Lin on for Paul Metis. Thank you for taking my question. Could you probably give a little bit more color around the endpoints for LEAP 2 and how does that compare to LEAP 1? And secondarily, how does with all these SPA and the amendment, how does that work regulatory implication does that come up especially with the changing of the dose scenario, et cetera?
So, the endpoints for LEAP 2, and LEAP 1 are the same. They are both being conducted under the same guidance, through the same endpoints at the same time in terms of 72 to 120 hours for the FDA endpoint, 5 to 10 days after the end of treatment for the EMA endpoints. That’s consistent across both studies. It’s both studies are being conducted under the same guidance. In terms of the amendment, I think the reason that the FDA has a written procedure for amending SPA is that there is recognition that you learn sometimes and drug developments can be a little bit iterative. And they have created a process, as far as we understand, in our dialogues with the FDA, the special protocol assessment with the amendment is as binding and has agreed as the original special protocol assessment. So we don’t merely see this as a confounder.
And also given the opportunity to change, yes, definitely we’ll take it, grab it with both ends and again, it’s a highly positive modification.
All right, thank you very much.
Thank you. [Operator Instructions] and our next question comes from Kevin Kedra from Gabelli your line is open.
Thanks for taking my question. Just a couple more questions on LEAP 1. First, you mentioned at least 550 patients, just wondering what would kind of be triggering factor to taking that enrolment higher or we basically looking to stop at 550. And then secondly, you mentioned stratification by, say, U.S. versus the rest of the world or by PORT Scores, has the FDA set any criteria of minimum or maximum enrolment for both geographic and by PORT Score. Thanks.
Okay. I will ask Elyse again to elaborate on the LEAP 1. Of course, we do have an interim analysis but -
Right, so 550 is the sample size based on our current specific assumptions and as you know, [indiscernible] we have an interim analysis built-in that really was based on a dialogue with the FDA given that this is a relatively new guidance. At this time, we agree there is no program had reported add on to this guidance, so obviously there have been [indiscernible] subsequently. That’s really to affirm our sample size estimate. And so that’s probably the primary driver of what could affect our sample size is the interim analysis where the recommendation will either be good, your sample size assumptions were correct just keep going till the end or we recommend you increasing movement by X. Those are really the two outcomes we would expect from the interim analysis. That said, if we are enrolling like gang busters and ahead of schedule might we let the study go a little bit longer, with the design it with the little room to do so. Not any great reason why other than to expand the size of our overall safety database.
Then regarding your second question which I’m trying to - stratification, so the FDA, so the stratification’s are basically for the guidance. This is really what the FDA requests. I think they recognize that IV the oral study is challenging in the US because of the way antibiotics are prescribed in the U.S. and our biggest barrier to enrolment in the U.S. is the prior antibiotic exclusion. Now, given that is the FDA’s exclusion and they recognize they are making the challenge within the U.S., they have not mandated the certain proportion from within the U.S. for the study. The ICH [ph] is supposed to harmonize the world and create the ability to enroll patients that are unacceptable in the U.S., but do the stratifications because there are slightly different practices around the globe. Hopefully the PORT Scores standardize the populations as much as possible.
Finally, you asked me about whether or not there are predefined thresholds for PORT Score, there are and we are following them.
Okay. Thank you. I’m showing no further questions. I would now like to turn the call back to Colin Broom, CEO for any further remarks.
With that let me just thank everyone for listening to the call this morning. We are really very pleased with our interactions with the agency and focused on our development programs. So thank you very much for your questions and we look forward to have a great day. Thank you.
Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone, have a great day.
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