Good morning, everyone. We have just hit 11:00 A.M., so we're gonna get started with today's investor briefing. There's still a few more people logging on. My name is Alfred, and I'm part of the Pharmaxis investor relations team. I'll be hosting today's webcast briefing. We're joined today by Pharmaxis Chief Executive Officer, Gary Phillips, who's gonna provide a brief presentation on the June quarter results. Then we'll open the floor to do questions from attendees. Throughout the presentation, if you do have any questions, please type them into your Q&A box on the left-hand side of your screen. If you are on a smart device, your Q&A button is on the bottom of your screen, and we'll read them out after the presentation.
As many of you are aware, it's been a very busy quarter for Pharmaxis, with clinical trial programs running all over the world. Gary, I won't take up any more time, and I will hand over to you.
Thanks, Alfred, and good morning, everybody, from wherever you are. Yes, as Alfred said, it's been a busy quarter and a busy year for the team here at Pharmaxis. I'm just gonna go over a little bit of the highlights of what we've been doing in the last quarter and just looking ahead to the next quarter. I you know, as many of you know, the two things which we're really pushing and pursuing here are those two clinical trials ongoing. The first one is in a cancer drug, SNT-5505. That's a study in myelofibrosis. It's a phase II-A study. We've been recruiting that and we're still on track for meaningful data by the end of the calendar year 2022.
The recruitment has been challenging. I think all companies in the space that we are, which is looking at recruiting patients into orphan drug studies, where you're looking for rare patients, have really been struggling to find patients and that's largely particularly in the U.S. We've seen significant delays there in opening up the sites we had in the U.S. We've got two U.S. sites that opened only in the last month. We've got an additional U.S. site to come on stream in August and two more to follow, but that's really been an issue for us up until this point. We have made significant progress there in the last quarter. We finally cracked the U.S. in terms of sites.
We've got 11 patients out of 24 patients recruited, and the total number of sites now recruiting is 18 patients. I think the things we can say so far about the study as well is that we've the good tolerability profile that we saw in the phase I-C, that's been maintained. That's good news coming out of that study, given that this drug is going to be used in patients who are on standard of care, which causes already a lot of tolerability issues. A lot of drugs in the development pipeline also cause tolerability issues. The fact that we're clean really distinguishes us at this point. The other study that we're gonna talk about a bit is the SCAR study going on in.
Over in Perth with Professor Fiona Wood. The recruitment of the placebo-controlled cohort there has commenced, and we've seen some social media and mainstream TV awareness, which I'll touch on briefly as we get towards the end of this short presentation. The other thing I wanted to mention in this update is the Mannitol respiratory business. You know, we continue with our strategy there of trying to reduce costs and deliver non-dilutive cash back into the business. You can still see that washing through into our accounts, even in this last quarter, with reductions in employee and marketing sales costs that we can see come from actions that we took during the last 12 months. There's still some more to come here.
The other things here is that, you know, as we've mentioned before, COVID has impacted Bronchitol and Aridol sales. I mean, both of these drugs are in the respiratory sector. We've seen a lot less patients presenting at hospitals for respiratory tests, which is where Aridol comes in. Cystic fibrosis patients as well have been largely kept at home during the whole COVID pandemic. Now, that's also had a knock-on impact in the U.S., where, you know, we had an approval for the drug in the U.S., and then our partner, Chiesi, launched, but have been unable to really physically launch the product because of the impact of COVID-19 on the hospitals there and the fact that no cystic fibrosis patients were presenting themselves into clinic.
Now, they've quite recently given us information where they've downgraded the long-term U.S. forecast as well, based on what they're seeing. That's largely due to these post-COVID clinic procedures. CF patients used to go into clinic four times a year. They believe at this point in time that that's likely to be reduced to only two times a year, which reduces the number of opportunities to prescribe the product, which slows the ramp. Also they're seeing the impact of some of the new therapies in cystic fibrosis, reducing the need for drugs overall in that area. I have to say, it's very difficult to predict at this point where this will end up.
At the moment they've given us a long-term downgrade in the forecast, which leads to us reducing our long-term forecast in terms of EBITDA that we can get from this business. It's still very much positive, but it's reduced from where it was. As I say, this is Chiesi's opinion. They're our marketing partner. We have passed that through in the information that we've given in the quarterly report, where you can see more detail. Last thing for the quarter really is we've also appointed a new chief medical officer. Dr. Jana Bhaskar joined us in June. We very much welcome him. Jana has recently come to us from IQVIA, where you know he'd spent all of his last four years running clinical studies.
Early stage and later stage products. Then the four years before that, he'd spent as the medical director in for Novartis Oncology here in Australia and had oversight of some 70 different studies in oncology. He comes with a lot of relevant experience. With that, I also just wanted to mention at this point, the passing of Dr. Brett Charlton. Brett's been with the company since the beginning. He was the founding scientist, and he's given more than 20 years service to the company. Just wanted to recognize that today and the service that he's given to the company and he is going on to retire in the next six months.
Just a brief reminder that both of our drugs that are in the clinical studies, and this is where the real value is coming from, in the future of Pharmaxis. They're both drugs that target the inhibition of lysyl oxidase. Lysyl oxidase is an enzyme which is involved in the cross-linking of collagen. The chart on the left-hand side of this, the screen now you can see is where you can see the impact. This enzyme causes the fibroblasts are secreting collagen fibers into areas that are affected by wounds, mechanical injuries, metabolism, genetics, whatever causes it. The enzyme cross-links those collagen and causes the stiffness in the tissue, which has a feedback loop which further increases the secretion of collagen.
That overall builds up scar tissue. That has an impact on a number of diseases. Now, SNT-5505, as I've mentioned, we're going after cancer, mainly. Myelofibrosis and hepatocellular carcinoma are the two first indications for that drug, but it has potential in others. SNT-6302 is our topical form of that drug. It's a different chemical compound, different patent, and that one's being used in skin scarring. Now, in terms of where those studies are at, I mentioned at the outset, the myelofibrosis study, it's phase II, it's open label, it's a six-month study. We're doing it in patients who are intolerant of JAK inhibitors. JAK inhibitors are the standard of care for these patients.
They're drugs which relieve the symptoms of myelofibrosis, but do very little for the underlying disease, and particularly the fibrosis in the bone marrow. It's very likely that the next step for SNT-5505 will be a combination treatment with a JAK inhibitor in the future. The FDA mandated route for this is to first of all look at this drug as a monotherapy, and that means these patients have to have already failed. They have to be intolerant or ineligible to be on a JAK inhibitor. That often means these patients are extremely sick. We've seen the patients coming into the study, they're a very heterogeneous group.
Some of them have large spleens, some of them have small spleens, some of them have low blood counts, some of them have higher platelet counts, some of them have just had transfusions. A real mixed bag of patients coming in. They all are really quite sick. Patients who come off a JAK inhibitor only have about 12 months-18 months to live. That gives you some idea of the kind of patients that we're recruiting into the study. We're expecting interim data in the second half of this year, and then full data in the first half of next year.
The hepatocellular carcinoma study, this is a phase I-C in patients who have newly diagnosed hepatocellular carcinoma or liver cancer, and it's gonna be used on top of standard of care, which is in this case a PD-1 inhibitor and an anti-VEGF drug. This is really state-of-the-art in hepatocellular carcinoma at the moment. This study is being run by the study group in Rochester, in New York. It's an investigator-led study looking to recruit 18 patients. I'm pleased to say that the agreement that we had with Rochester was finally signed in the last quarter.
The same issues that we've had with recruitment in myelofibrosis and getting U.S. centers through the administration process of getting studies started off impacted the start of this study as well in terms of the slowness in getting the contract done. That's now done, and we're expecting the first patient in this quarter now, and data in the first half of 2024. 6302. There's two proposed studies there. One of them is ongoing, which is the modification of established scars. If you think of a scarring process in the skin, there's really two ways of addressing it. One is to look at whether we have a drug which can alleviate and reduce an existing scar.
Can you reverse a scar which is already there on the skin? The other way of modality of using a drug in this area is to stop a scar forming after an injury. The first of those modalities, changing an existing scar, in this case, we're looking at patients who've had a scar for more than one year. That study is recruiting already. We've already had the first eight patients go through this on active drug, and to check that we were seeing the same kind of inhibition of the enzyme in the skin biopsies that we were taking, and that looks really good. We're now expanding that into the stage where we're recruiting both patients onto an active arm and a placebo arm.
By the end of the year, we're hoping to report results here in a placebo-controlled trial of this drug in skin scarring. This was the subject of some social media and some TV stories in the last quarter. I thought it might be useful just at this point to show the story that appeared on Channel Nine earlier.
Perth scientists are trialing a world-first cream to reduce the impact of scarring. Burns specialist Dr. Fiona Wood helped develop the treatment aiming to eliminate pain and emotional trauma for patients.
Ben Smith was just eight years old when a fire explosion changed his life.
I was a typical, you know, young kid, played with fire, and I was unlucky. I got, yeah.
Set a drum on fire, and it exploded.
Burns to 55% of his body. 20 years on, he's still suffering.
When you're burnt, like, especially as a kid, and then growing up, and I'm quite, you know, over six foot tall, so growing so much, skin doesn't grow with me as quick. So my skin would be tight, so I would have to have, you know, scar releases.
Scientists from the University of Western Australia are helping to change this for patients with scars. Developing a world-first formula which aims to improve skin quality, elasticity, and appearance.
It's not what you just see. I always say that scars are more than skin deep. They go right to the core.
Also preventing pain.
It can affect how you move, how you respond, the speed of response. They can affect you because they're itchy and painful, and that can be pervasive, can influence your sleep.
Ben Smith noticed changes after using the cream for just a month.
Cream like this, honestly, it's a miracle to try and alleviate the amount of operations I would have needed.
It's hoped that the topical cream, which is designed to be applied to the skin daily, will eventually become available to patients across Australia. It's reliant on a clinical trial, with results expected by the end of the year.
We're trying to drive our goalpost always towards a scar-free solution.
The clinical trial will soon get underway in Perth, and UWA is putting a call out for willing participants.
Please come and join up. At the moment, we're needing, like, more participants so we can get more data and help people like myself and, more importantly, kids.
Can we change those chemical bonds such that we soften the scar, un-scar the scar? That's the goal.
Ashton Hyrons, 9News.
Now, the other trial here that we're working on with Professor Wood is in scar prevention post-surgery. There's a number of different ways. I think we've flagged before that she's particularly interested in looking at this in patients who've had a burn injury. She's developing a protocol at the moment, looking to get first patients in before the end of the year. But we're having sort of an open discussion with Professor Wood on what is the best patient group that we might look at here. There are a number of different surgeries that lead to scarring that we could look at here.
That's done in combination with, I guess, my discussions with pharma companies, which maybe we'll get onto a bit later during the Q&A. Those are the four trials ongoing. I think two of them, clearly, the myelofibrosis and the established scar studies are ones that we're expecting, you know, some data from by the end of the year, and that's really where the value lies in the stock at the moment for the future. We ended the quarter with a pro forma cash. We're expecting an R&D tax credit of AUD 4.9 million later in the year. That puts our pro forma cash at the end of June as at AUD 14 million. That's where we're aligned.
With that, Alfred, I'll just finish there, and I'm happy to take any questions that come up.
Excellent. Thank you very much, Gary. I hope everyone was able to see and hear that video fine. We have had quite a few questions come in already. No surprises, quite a few about that, about your scarring drug. If anyone does have any questions, please pop them into your Q&A box, and we'll start working through them. Gary, the first one comes from Joseph. If Fiona Wood's trial is successful as planned, is it Pharmaxis's intention to maintain full ownership of the product through to commercialization?
Yeah, that's a really good question. It's a topic that I've discussed. I was at BIO in San Diego, which is the world's largest partnering conference that takes place once a year in the US. I think it's 13,000 people were there and hundreds of different companies. I talked to probably all of the major dermatology companies that are active in doing clinical development of drugs. I think, you know, I've looked very carefully at the history of drugs in this space and in scarring. There's very little in the clinical pipeline. That tells you two things. I think one is that developing drugs for scars isn't easy. You know, that's one thing to note.
On the other hand, there's a lot of big companies there that are very, very hungry for assets that actually work. I think, you know, the board and the management team at Pharmaxis are very cognizant of those challenges going ahead. I think we'll look very carefully to see what the level of evidence is for the efficacy of the drug when we get to the end of the year. We'll be discussing it with some of those potential partners to see whether it makes sense for us to hold and go further with the drug, or whether to do that in collaboration with somebody who's got a clinical experience in developing drugs in this space. As I said, I don't think that the development here is necessarily straightforward.
Some of the challenges, for example, are you know, everybody's skin is different. Everybody's individual scar is different. You need to control the kind of scar that you have in order to get efficacy you want. Then there's the endpoints that the FDA might ask us to prove as well. A lot of the endpoints in scarring are more subjective. They're driven by patient and clinician questionnaires on what they see about the study. We're working very hard with Professor Wood to try and find and identify objective measures of scarring that can be used with the FDA. You know, it's quite honestly, it's quite interesting that we are still.
We're actually pioneering this area at this point of the company's life cycle and the drug.
Thanks, Gary. Another question here. Big Pharma has been acquiring a lot of small drug developers over the past few years. Have you had discussions with them? If not, when might they start looking at Pharmaxis more seriously, do you think?
We are world leaders in lysyl oxidase chemistry and the inhibition of lysyl oxidases. There are a number of companies interested in going down this field, but we are, at the moment, global leaders and the most advanced in the clinic. That does, by definition, bring us under the purview of big companies globally who are interested in the approach. Fibrosis, it remains an overall disease driver, which is interesting and drives really high valuations. We are being watched by a number of companies, and in particular, they're looking to see the clinical data that would come out at the end of the year. Yes, there's certainly interest in what we're doing, and a high degree of interest in the target that we've gone after.
I think there's both scientific and clinical and commercial interest in what these drugs might be able to do if we do see clinical proof of concept at the end of the year.
Thanks, Gary. Another follow-up question, but from Heshane. What level of data is required by Big Pharma to license either of your candidates?
I think data from the studies that are currently ongoing. I believe that, you know, talking to companies that are interested in myelofibrosis, you know, they have really two things in mind. You know, one is, do we have a drug that's well-tolerated? People routinely, I mean, the companies and then clinicians routinely, refer to the drugs being used in myelofibrosis as poisons. They're really poisoning certain cells within the body to reduce the symptoms of what we're seeing with these patients. We hold a pretty unique position with a well-tolerated drug, we believe. Data coming out of the existing study proving that we're well-tolerated will be, I think, very well-received by the companies that are watching us.
They're also looking for something that will combine well with an existing treatment as well. Combinations with the JAK inhibitors is something which they are obviously looking for. Whether we will need to prove that it works well with a JAK inhibitor or whether the data from the existing study will be enough, I think remains to be seen. My guess is that the existing study and the data from that will be enough to drive a company to jump if we were in the market and wanted to sell the asset at that point. I think on the scarring side of things, there is nothing that works in scarring, you know, almost nothing from a pharmacological point of view.
I think even though the data coming from these studies will be more subjective than you know really objective endpoints, something we are discussing with Fiona Wood and her team, and seeing what we can do with the second study to make it more objective, put in more objective endpoints. I think that may well be enough. In an ideal world, we'd be delivering endpoints that the FDA would already classify as being enough to get an approval. That may well be for the next study. In the meantime, I think showing that the drug works and having patients who've responded well will put the drug in quite a unique position in terms of its partner ability.
Thanks, Gary. Question from Dennis that I think you touched on during the presentation, but I'll just get you to reiterate. When do you expect the data on all 24 subjects to be available in reference to the myelofibrosis trials?
Yeah, it'll be first half next year. I mean, we had targeted to get full recruitment by the middle of the year, so about now. Clearly, we haven't been able to do that, and that's largely been because of the U.S. sites. They just to give you an idea, I think they've taken something more than 12 months to get from initial contact through to a contract with them that's approvable. That is not because of a lack of interest from the clinicians. It's getting the administrative groups within these hospitals to prioritize a study, which in the end, each of these centers will only recruit one or two patients for. They prioritize studies where, you know, they're getting a lot of patients and therefore a lot more income.
That's been a real problem. You know, we focused on the larger centers in the U.S., but we're starting to expand that to look at smaller centers as well around the U.S. to see if we can add up and get more centers in.
Thanks, Gary. Another question from Dennis. Bronchitol EBITDA positive in FY 2023, would that require an additional AUD 3.7 million-AUD 4 million of revenue? Will most of this additional revenue come from the US?
Uh, we-
Can I jump in there?
Yeah, sure.
It's David, the Chief Financial Officer. David McGarvey, the Chief Financial Officer. Hi, Dennis. Your math is right in terms of we're needing something like AUD 3 million-AUD 4 million in extra revenue to do that. We would see that coming both from the US and Russia. The US is a large opportunity, but Russia is also a large opportunity, and about half between the two of them. Thanks.
Thanks, David.
Thank you. Question from Adam. How many patients do you expect to recruit in the myelofibrosis trial this current quarter?
Well, we do have some sight of the pipeline coming through, because we see patients that are due for screening, whatever. With the sites, those two big sites, I mean one of the sites that's come on stream in the U.S. is MD Anderson, which is the world's largest cancer site. We probably, I guess, expect to see around about six patients come through in the next quarter.
Excellent. Thanks, Gary. We are starting to run a bit tight on time, so if anyone does have any more questions, please pop them in. Otherwise, we'll take them offline. I might just run through two or three more, Gary.
Yeah.
Another question from Adam. What non-dilutive funding options are you considering and what would be the timeframe?
Well, we are working on a number of initiatives in this space. I would expect some more news on those to come in this quarter. I can't really talk more about them at the moment 'cause they're still subject to ongoing negotiations. There are a number of different things that we're looking at, and I would expect a couple of them to come to fruition in this quarter.
Thank you. Just one last question from Adam. What % of myelofibrosis patients would meet your trial's inclusion criteria?
It's a small percentage. We're looking for patients who are ineligible to a JAK inhibitor. At any one time, I mean, 75% of patients fall off of a JAK inhibitor within the first five years of treatment. You're looking at that. There's other entry criteria as well the FDA have put upon us. They've not gotta be taking one other drug as well. We are free to have patients who have pretty low blood counts, which helps us. But in the end, we're probably looking at around 5% of myelofibrosis patients are the sort of target group that we're trying to work within. The total number of patients here isn't necessarily an issue.
I think, you know, we are, though, having some competing studies in this area. There is one large study globally ongoing that's run by Novartis, for example, that's looking for exactly the same group of patients that we are that's in three, for example. You know, it's. We're not alone looking at that group. Although that patient group, there are patients that exist, we're also in a fight with other companies looking at recruiting patients in those same JAK-intolerant ineligible patients.
Excellent. Thanks, Gary. As we are now out of time, if anyone does have any more questions, please feel free to email them through, and we can get Gary or David to respond via email. A recording of this webcast will be also made available on the Pharmaxis's website in the coming days. On behalf of all Pharmaxis's shareholders and those in attendance, Gary, I'd like to thank you for your time today, and we look forward to hearing from you again soon.
Pleasure. Thanks a lot.