Peter Nielsen - President, Chief Executive Officer
Anthony Price - Vice President, Finance and Accounting
Will O’Connor - Stern Investor Relations
Conference Call Participants
Laura Engle - Stonegate Capital Partners
Good morning ladies and gentlemen. Welcome to the Bio-Path Holdings full year 2018 earnings conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. I would now like to turn the call over to Will O’Connor of Stern Investor Relations. Please proceed, sir.
Thank you, Operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company’s first quarter 2019 earnings results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release which outlines the topics that we plan to discuss on today’s call. The release is available at biopathholdings.com.
With me today from Bio-Path are President and CEO, Peter Nielsen; and Vice President of Finance and Accounting, Anthony Price.
Before we begin the call, I’d like to remind you that today’s discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today’s press release and in the company’s recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today’s call.
With that, I’ll now turn the call over to Bio-Path’s CEO, Peter Nielsen.
Thanks, Will. Good morning, everyone and thank you for joining us today. During the first quarter, we continue to execute on our strategic initiatives to build our DNAbilize technology platform and advance our clinical development programs. As I'll describe in greater detail later in the call, we were delighted to present data from preclinical study supporting the potential of BP1003, a novel liposome-incorporated STAT3 oligodeoxynucleotide inhibitor for the treatment of pancreatic cancer, non-small cell lung cancer and acute myelogenous leukemia or AML at the American Association of Cancer Research Annual Meeting before an audience of world-leading oncologists.
I will begin my discussion with a review of our platform technology. As you know, the DNAbilize platform is our proprietary antisense RNAi nanoparticle technology, which we use for the creation of nucleic acid therapeutics. DNAbilize therapeutics integrate with the cellular membrane because of their unique structure, allowing the antisense drug to be delivered to the diseased cells with high uptake into the cell via incorporation into lipid layers.
There has been no evidence of toxicity associated with our technology. We are extremely enthusiastic about the potential of our DNAbilize platform for developing novel treatments for patients suffering from diseases with high unmet medical need.
Let's review the preclinical data we recently presented from our third drug candidate BP1003, which targets the STAT3 protein. We are studying BP1003 for the treatment of pancreatic cancer in a patient derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments. The results from our preclinical studies of BP1003 were accepted as a poster for presentation at the American Association of Cancer Research Annual Meeting in Atlanta in April.
We are excited to be targeting STAT3 for a number of reasons. Signal transduction and Activator of Transcription-3 or STAT3, though typically inactive in normal cells is aberrantly active in cancer cells. The abilities of tumor cells to proliferate uncontrollably resist apoptosis induce vascular formation and invade distant organs are well-recognized hallmarks of cancer.
STAT3 is a regulator of the genes involved in these cancer processes. More recently the capability of tumors to evade immune surveillance and avoid destruction by the immune system has also gained significant acceptance in the cancer research field. STAT3, which is a point of convergence for many ontogenetic pathways has emerged as a critical mediator of tumor immune evasion at multiple levels.
Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic ductal adenocarcinoma of cancer. Activation of STAT3 correlates with poor clinical outcome, high grade disease and metastasis that has been linked with resistance to chemotherapy, including gemcitabine considered a standard of care agent for advanced pancreatic cancer. Therefore, inhibition of STAT3 in combination with chemotherapy is expected to produce enhanced clinical benefit.
The poster at AACR highlighted four antisense oligo sequences directed against STAT3 messenger RNA, identified by Bio-Path and manufactured using DNA -- DNAbilize antisense RNA nanoparticle technology. Cell viability tests and western blots were conducted to determine the inhibitory effects of liposome Incorporated STAT3 antisense oligo on non-small cell lung cancer in AML cells. An ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic patient derived xenografts to study the overall activity of BP1003 alone, and in combination with gemcitabine.
Using previously defined criteria, tissue slice viability inhibition greater than 30% and with a P value less than .05 was a response. For validation of ex vivo results, pancreatic cancer patient derived xenografts of tumor bearing mice were administered to be with BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days. BP1003 was selected as the most potent liposome incorporated STAT3 antisense sequence in decreasing non-small cell lung cancer viability. Further validation at AML cells demonstrated BP1003 inhibited cell viability and STAT3 protein expression.
In the ex vivo live tissue sensitivity assay, BP1003 at a dose of 10 micromol significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer patient derived xenografts by more than 30%, again with a P value less than .05. The combination of BP1003 in gemcitabine further enhance ex vivo efficacy in BP1003 in a subset of patient derived xenografts. In the ex vivo study with pancreatic cancer patient derived xenograft models, a combination of BP1003 engine sentiment [ph] caused tumor regression during the 20 day -- 28 day drug treatment period. This anticancer activity was maintained for another 21 days even when drug treatment had ceased.
We are excited by these preclinical data and to be tackling solid tumors with our proprietary technology platform. We look forward to continuing our IND enabling studies of BP1003 in 2019 with a goal to enter first in human trial with this very promising product candidate next year.
Let's now review the progress we've made advancing our lead product candidate, prexigebersen. Prexigebersen is being studied in a Phase 2 clinical trial for the treatment of acute myeloid leukemia or AML. As a reminder, this trial is a multicenter study of prexigebersen combination with low dose cytarabine or LDAC, in de novo patients with previously untreated AML who are not otherwise eligible for standard or high intensity chemotherapy regimens or who have elected a low intensity regimen. This trial is open-label with a two-stage design to assess safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen.
The primary endpoint of the study is complete remission, including patients who achieve incomplete hematologic recovery or CRI and complete remission within complete platelet recovery. Secondary endpoints will assess the safety and efficacy of prexigebersen including overall survival, time to response, duration of response and adverse events as evaluated by physical examination findings, vital signs and clinical laboratory tests.
In April 2018, we presented the exciting interim results from our Phase 2 study. And during the first quarter we were pleased to report additional analysis from this study. In our original interim analysis from this ongoing Phase 2 study, our results show that 47% of the evaluable patients showed some form of response to the combination treatment including four patients with complete remission or 24%, and four patients with stable disease, including one patient who achieved a leukemia free status, and one patient who had significantly reduced bone marrow blast.
As you may recall, during the first quarter, we announced updated interim results from the study. These results now show that the efficacy profile has improved to where a 11% or 65% of the 17 evaluable patients had a response, including 5 or 29% who achieved CR including one CRI and one morphologic leukemia free state, and six stable disease responses including two patients who had greater than 50% reduction in bone marrow blasts. Importantly, through investigations by our principle investigators it was observed that 68% of these patients were secondary AML patients, an extremely difficult class to treat.
These updated interim data from stage one of our Phase 2 study of prexigebersen in de novo AML patients only increased our confidence in the safety and efficacy profile of prexigebersen and underscore its potential to treat AML patients. The complete response rate for LDAC treatment alone for the class of patients in this study was benchmarked at 7% to 13%. Whereas prexigebersen treatment with LDAC is currently showing a 29% rate with a highly favorable safety profile. The recent approval of the frontline therapy venetoclax provides an opportunity for combining prexigebersen with the combination venetoclax was decided in for the treatment of de novo AML patients.
As we've said before, we view prexigebersen as an ideal combination candidate with frontline therapy. Our aim is to match prexigebersen with the leading frontline therapies to improve treatment options for patients. As a treatment landscape evolves, we will continue to respond to those advances. The plans for our registration directed clinical development program with prexigebersen as a treatment for AML reflects these changes. Firstly, we have amended the existing Stage II cohort of prexigebersen plus decitabine in untreated de novo AML patients to add untreated high risk myelodysplastic syndrome or MDS patients.
High risk MDS patients are typically treated with hypomethylating agents alone and the combination treatment may benefit these patients. We cancel the Stage II cohort of prexigebersen plus low dose cytarabine or LDAC for untreated de novo AML patients. Although we have had good success with prexigebersen plus LDAC, there is a strong preference by oncologists who have decided then over LDAC. We amended the existing Phase 2 protocol to add a cohort of prexigebersen in combination with decitabine and refractory relapsed AML patients plus high risk MDS patients.
In addition, we will continue our preclinical efficacy studies for prexigebersen in combination with decitabine and venetoclax to confirm the incremental efficacy benefit of this triple combination. Once we have confirmed the incremental efficacy benefits of the triple combination, we will amend the protocol of the Phase 2 trial to perform a small safety assessment of the triple combination prexigebersen with decitabine and venetoclax in refractory relapsed AML plus high risk MDS patient cohort.
Following a successful safety assessment, we will initiate a registration directed cohort of the trial by adding venetoclax to the prexigebersen plus decitabine combination treatment in refractory relapsed AML plus high risk MDS patients. Finally, we will amend the protocol of the Phase 2 trial to initiate prexigebersen plus decitabine plus venetoclax registration directed trial for untreated AML and high risk MDS patients to determine if a more durable response and longer survival is observed compared to patients first treated with the decitabine plus venetoclax combination.
Overall, these transformational steps will result in two registration directed cohorts of our Phase 2 clinical trial in AML. Both cohorts will study prexigebersen plus decitabine plus venetoclax, one for untreated AML and MDS, the other for relapsed refractory AML and AMS. We’ve also updated our plans for BP1002, our second therapeutic candidate which targets BCL2. Venetoclax has also shown activity against the anti-apoptotic protein BCL2 and works by neutralizing the proteins BH3 domain. It is an approved treatment for chronic lymphocytic leukemia or CLL patients. However, with the exception of some patients treated with allogenetic hematopoietic cell transplantation, disease relapse invariably occurs oftentimes due to BH3 domain mutation over time.
BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA, and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative venetoclax patients who have relapsed. Further, we believe there will be an AML patient relapses from venetoclax treatments representing an addition in AML patients representing an additional opportunity for Bio-Path to treat those patients with BP1002. As a result, we believe we will be able to file for registration of BP1002 for the treat treatment of venetoclax relapses in both CML patients and AML patients.
The planned modification of our Phase 2 clinical program in AML to include venetoclax combination treatment with prexigebersen will give us early experience with treating BCL2 driven anti-apoptosis in these patients. And as always, we continue to evaluate opportunities to expand DNAbilize technology platform to other oncology indications.
Finally, I'd like to briefly highlight a significant corporate update. During the first quarter, we successfully raised $21.3 million. In March 2019 Bio-Path issued 712,910 shares of its common stock at a price of $25.95 per share for gross proceeds of approximately $18.5 million in one transaction. In addition, Bio-Path completed two smaller offerings during this first quarter. This financing enables us to fully execute on our clinical development plans for our three promising therapeutic candidates. With these additional funds we now have the resources to achieve a number of key milestones that we believe should significantly enhance shareholder value.
With that, I'll now turn the program over to Anthony Price for brief review of our year-end financials. Anthony?
Thanks, Peter. The company reported a net loss of $1.5 million or $0.89 per share for the three months ended March 31, 2019 compared to a net loss of $1.9 million or $3.38 per share for the three months ended March 31, 2018.
Research and development expenses for the three months ended March 31, 2019 decreased to $0.4 million compared to $0.9 million for the three months ended March 31, 2018, primarily due to decreased clinical trial expenses as we modified operations between Stage I and Stage II of our Phase 2 clinical trial in AML to include venetoclax combination treatment with prexigebersen.
General and administrative expenses for the three months ended March 31, 2019 increased to $1.1 million compared to $1.0 million for the three months ended March 31, 2018, primarily due to increased legal fees and insurance costs. As a March 31, 2019, the company had cash of $19.3 million compared to $1.0 million at December 31, 2018.
Net cash used in operating activities for the three months ended March 31, 2019 was $2.0 million compared to $1.7 million for the comparable period in 2018. Net cash provided by financing activities for three months ended March 31, 2019 was $20.3 million.
With that, I will now turn the call back over to Peter.
Thanks, Anthony. In closing, 2019 has gotten off to a particularly strong and positive start, led by our growing body of clinical evidence in support of our pipeline of RNAi nanoparticle drugs. Importantly, we strengthened our balance sheet which allows us to continue to support our compelling development programs in a number of cancer indications were current treatment options are limited.
With that operation -- with that operator, we are ready to open the call for questions.
Thank you. [Operator Instructions] Our first question comes from Laura Engle with Stonegate Capital Partners. Your line is open.
Good morning and thank you for the thorough update. We appreciate that. How are you?
I'm fine, Laura. Nice to hear from you.
Good to talk to you. So just given obviously all that you’ve going on, especially with the busy pipelines in several products and development, could you just kind of give us insight for R&D? Perhaps the remainder of the year maybe you could compare to last year, given that the first quarter was so much lower than historically has come in. So just your thoughts on that for the remainder of the year.
Yes, the thing to -- looking at the R&D values in comparison with -- the period comparison, you have to remember a significant piece of our R&D expense is when drug product is released from the holding account. And recall, we don't have inventory per se, because it's not an approved drug, so therefore it's not something that has a market value. But nevertheless, when we manufacture drug, our drug is -- has two primary steps. We have the drug substance which is the RNAi antisense. That typically with companies is their whole drug, but that's a raw material for our final drug product. So we have several steps. Two separate clinical batches that go into that and the accounting for that is to -- is to basically accumulate costs that go in to the final drug product on the balance sheet as a prepaid expense. And those maintain there until the batch is released. And then once it's released, then it is -- it doesn't go through an inventory account, it goes to expense. And so, when you see those changes in connectivity or values like that, that's typically driven by the drug product being completed therefore released to us and therefore expensed in its entirety. So that's primarily what goes on. We’ve had in fact quite a bit of activity on the front. It is a little bit slow as we kind of indicated because we are in between refocusing our AML Phase 2 to get it to the endpoints that we won [ph] -- or eventually we will be two cohorts, one untreated, newly untreated and then the other relapsed refractory, both with a triple combination. And so, we've had to -- until we get to that, enrollment has been slow because venetoclax has been tested against a lot of drugs and it takes up patients. So we've added things that will -- our activity going and we're half way there I think and adding refractory relapsed patients will -- I think give us access to patients sooner than that and that’s protocol is in the process of heading [ph] out tumor sites for [indiscernible] and whatnot. But a big part of the number -- numbers change, Laura, is again just the accounting and the fact that these are batch things and those batch processes can take 6 to 9 months, because remember you're going through a Q and cumulating probably antisense drug substance and that's a raw material input for the drug product, again which has to go through its Q in testing. And testing is couple of months at least for each step away. So that’s -- I think that’s substantially what you're seeing and why you're asking that question.
Okay. Okay. Well, it sounds like it's going to be exciting couple of quarters coming up. So I look forward to that and I will get back in the queue. Thanks, Peter.
All right. Thank you.
Thank you. And I’m showing no further questions at this time. I would like to turn the call back over to Peter Nielsen for closing remarks.
All right. Thank you again everyone for joining us and for your continued interest and support of Bio-Path. Have a great day.
Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day.