Good day, everyone, and welcome to the Panbela Therapeutics fourth quarter 2022 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, James Carbonara. Sir, the floor is yours.
Thank you, and once again, welcome to Panbela's fourth quarter 2022 earnings call. With me on the call are Jennifer Simpson, Chief Executive Officer; and Sue Horvath, Chief Financial Officer. Before I turn the call over to Dr. Simpson, please note that statements made on this call that are not historical facts may be forward-looking statements. Significant risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements are detailed in the company's annual report on Form 10-K and supplemented by the subsequently filed quarterly reports on Form 10-Q, as well as in other reports that the company files from time to time with the SEC. Any forward-looking statements made on this call are made only as of today's date, the company does not undertake any obligation to update or supplement any such statements to reflect subsequent developments.
Now I would like to turn the call over to Jennifer Simpson, CEO of Panbela. Jennifer, please proceed.
Thank you. Thank you everyone for joining. I will begin the call with a review of our clinical development program, recent accomplishments, and our upcoming milestones. Sue will then review the financial results, and we will open it up for Q&A. Starting with our phase III programs, in November, we enrolled our first patients in Europe for our ASPIRE global clinical trial in the first-line treatment of metastatic pancreatic cancer. As a reminder, ASPIRE is a global randomized double-blind placebo-controlled clinical trial to evaluate ivospemin, or SBP-101, in combination with gemcitabine and nab-paclitaxel in patients with metastatic pancreatic ductal adenocarcinoma. We're really excited after just recently receiving regulatory approval for the opening of trial sites in Europe to have had our first patients enrolled in Italy. Having European enrollment underway is highly encouraging as we continue to ramp up the trial.
We continue global enrollment and just last week enrolled our first patient in South Korea. We are focused on the country and site initiation for the ASPIRE trial as we aim to have the full complement of sites on board by the middle of this year. Having South Korea underway is also encouraging as we continue to advance the trial. With approximately 95 sites planned throughout the United States, Europe, Australia, and South Korea, we are continuing to focus on site initiation enrollment to ultimately deliver a more effective treatment for pancreatic cancer, a deadly disease with few treatment options. The trial sample size is approximately 600 patients, and the primary endpoint will be overall survival. We will use overall survival for the interim analysis as well. It is anticipated to take approximately 36 months for complete enrollment, with the interim analysis still available in early 2024.
The interim analysis allows us to assess the merits of continuing the study, as well as to ensure optimal resource utilization. We are excited to have these recent approvals as we move forward towards the interim analysis expected in a little over one year from now. On a related note, in January, the European Medicines Agency, or EMA's, Committee for Orphan Medicinal Products has issued the Adoption of Commission Implementing Decision relating to the designation of ivospemin, SBP-101, as an orphan medicinal product in combination with gemcitabine and nab-paclitaxel in patients with metastatic pancreatic ductal adenocarcinoma. The designation of orphan drug status within the EU is an important achievement as we continue to advance the global ASPIRE trial, with the potential that this may be an option for patients with first-line metastatic pancreatic cancer in the future.
Orphan drug designation in the European Union is granted by the European Commission based on a positive opinion issued by the EMA Committee for Orphan Medicinal Products. The EMA's orphan designation is available to companies developing treatments for life-threatening or chronically debilitating conditions that affect fewer than 5 in 10,000 persons in the EU. Medicines that meet the EMA's orphan designation criteria may qualify for financial and regulatory incentives, including a 10-year period of market exclusivity in the EU after product approval, protocol assistance from the EMA at reduced fees during the product development phase, and access to centralized marketing authorization. Turning to familial adenomatous polyposis, or FAP, the registration trial with Flynpovi is anticipated to begin in the second half of 2023 and is funded by our licensing partner, One-Two Therapeutics.
We are working closely with One-Two to ensure alignment with the FDA on all key aspects of the trial before the trial commences. We anticipate that the trial will utilize European clinical sites and we retain the rights to Flynpovi outside of the U.S. and Canada, we will seek advice from the European authorities regarding the utilization of the registration trial for approval in Europe. A reminder, a prior phase III study evaluating eflornithine and sulindac or Flynpovi versus either agent alone showed a 100% risk reduction in the need for surgery in the lower gastrointestinal group. There are currently no approved drug therapies for the treatment of FAP, this data is exciting, and a lower GI group is intended to be a focus of the new registration trial. Lastly, we, in partnership with One-Two, also have an ongoing phase III double-blind placebo-controlled trial of Flynpovi.
The combination of eflornithine and sulindac to prevent recurrence of high-risk adenomas and second primary colorectal cancers in patients with Stage 0 to 3 colon or rectal cancer. This trial, known as the PACES trial, is funded by the National Cancer Institute or the NCI, in collaboration with the Southwest Oncology Group, also known as SWOG, we look forward to a futility analysis in the first half of 2023. Moving to phase II studies. First, there is an ongoing trial in relapsed refractory neuroblastoma utilizing eflornithine sachets. This trial is funded through the Children's Oncology Group, or COG, and the NCI. We also announced the start of a phase II double-blind randomized study to evaluate eflornithine tablets for recent onset type 1 diabetes in collaboration with Indiana University School of Medicine and funded by JDRF, the leading global type 1 diabetes research and advocacy organization.
Indiana University School of Medicine expects to enroll 70 patients in the phase II clinical trial at approximately six centers in the United States. Study eligibility will be for patients with recent onset type 1 diabetes. Participants will be randomized 2 to 1 to eflornithine tablets administered orally with food twice daily at a 1,000 mg /m2 dose or placebo over six months, followed by a six-month washout period to assess durability of response. The primary objective will be to determine the difference between the treated and placebo two-hour area under the curve, or AUC, mean using the log mean C-peptide at the six-month end of treatment period. Secondary objectives will include C-peptide AUC fasting and stimulated, excuse me, stimulated proinsulin C-peptide ratios, a biomarker of beta cell stress, and the urine polyamine content at 3, 9, and 12-month time points.
We are pleased to have begun the phase II trial for eflornithine tablets with Indiana University School of Medicine and JDRF, which is the leading global organization advancing life-changing breakthroughs for type 1 diabetes. Approximately 1.45 million Americans are living with type 1 diabetes in the United States, and there is approximately a $16 billion type 1 diabetes-associated healthcare expenditure and lost income realized annually. Moreover, less than 1/3 of people with type 1 diabetes in the U.S. are consistently achieving target blood glucose control levels. We are excited to move forward with the phase II trial, along with Indiana University School of Medicine and JDRF to provide better treatment options for this patient population. In phase I development, we have three programs that we will be starting.
Eflornithine sachets will be evaluated in combination with KEYTRUDA in the STK11 mutation population of non-small cell lung cancer. STK11 mutant non-small cell lung cancer responds poorly to checkpoint inhibitors, and bioinformatic analysis suggests that alterations in polyamine metabolic pathways may play a role in the resistance to immunotherapy. In preclinical tumor models, Eflornithine treatment improves anti-PD-1 efficacy by increasing tumor-specific cytotoxic T cell populations as well as increased expression of PD-1 on tumor-associated CD8-positive T cells. The phase I portion is fully funded, and we look forward to this trial starting as it will be the first clinical proof of concept trial focused on the relationship between polyamines and the immune system.
If this trial is positive, it opens the possibility for combining with a checkpoint inhibitor in other tumors as well as the possibility of combining with other immunotherapies such as CAR T therapy to improve response rates. Our second phase I program, which is scheduled to begin in the first half of 2023, will focus on the evaluation of ivospemin in the platinum-resistant ovarian cancer population. As a reminder, we've collaborated with Johns Hopkins University School of Medicine to identify this indication. Additionally, a poster on the treatment of immune-competent mice injected with VDID8+ ovarian cancer with ivospemin was presented and showed a significantly prolonged survival and decrease in overall tumor burden. The mature data was later published in the International Journal of Molecular Sciences titled Expanded Potential of the Polyamine Analog SBP-101 as a Modulator of Polyamine Metabolism and Cancer Therapeutics.
The publication highlighted that in vitro studies determined that SBP-101 reduced cellular viability across a broad range of cancer cell types with an exceptionally strong reduction in ovarian adenocarcinoma viability, resulting in a 42% increase in median survival in the VDID8+ ovarian cancer mouse model. We recently announced the acceptance of the abstract titled Evaluating the Efficacy of Spermine Analogue Ivospemin, SBP-101, in Combination with Chemotherapy in Ovarian Cancer for poster presentation at the American Association for Cancer Research, or AACR, meeting, which is occurring April 14th through the 19th this year. The data supports our efforts to initiate an ovarian cancer clinical program. Lastly, we have completed the preclinical work necessary to begin a pancreatic cancer neoadjuvant investigator-initiated trial.
We are working with the key opinion leaders to finalize the protocol and obtain the necessary institutional approvals to open this trial in the first half of this year. To recap the milestones as we continue to execute our development programs, we anticipate the opening of the non-small cell lung cancer STK11 mutation phase I trial, the AACR poster presentation of the ovarian preclinical work, a futility analysis for the SWOG colon cancer risk reduction trial in the first half of this year, the opening of a neoadjuvant trial, an ovarian cancer trial, the phase III FAP trial to open in the second half of this year, phase I non-small cell lung cancer data in the second half of this year, which will inform the phase II portion of the non-small cell lung cancer trial, which we hope to open by year-end.
Final data from the phase I programs in first line metastatic pancreatic cancer and early onset type 1 diabetes. Finally, the interim analysis of the ASPIRE trial in early 2024. In summary, we have made tremendous progress in Q4 and year to date. We are excited to enhance stockholder value as we move ahead in 2023 and onward by executing against our milestones. I will stop here and turn it over to Sue to review the financials.
Thank you, Jennifer. General and administrative expenses were $1.7 million in the fourth quarter of 2022 compared to $1.3 million in the fourth quarter of 2021. The increase is due to severance costs associated with the acquisition and integration of Cancer Prevention Pharmaceuticals, or CPP. Research and development expenses were $3.5 million in the fourth quarter of 2022 compared to $2 million in the fourth quarter of 2021. The increase is due to spending on our clinical studies as we ramped up efforts to activate up to 95 clinical sites around the world in the ASPIRE clinical trial. As a reminder, the results for the year ended December 31st, 2022 include approximately $17.7 million of in-process research and development, otherwise known as IP R&D.
IP R&D represents the asset we purchased in the acquisition of CPP, and GAAP accounting required writing off this asset to research and development expense immediately after the acquisition in the quarter ended June 30th. Net loss in the fourth quarter of 2022 was $4.7 million or $5.68 per diluted share, compared to a net loss of $3.5 million or $10.54 per diluted share in the fourth quarter of 2021. On January 13, 2023, we affected a reverse stock split at a ratio of 1 for 40 shares of the company's common stock. All share and per share amounts of our common stock presented here and in our report 10-K have been retroactively adjusted to reflect the 1 for 40 reverse stock split.
In Q4 of 2022, the company completed the sale of common stock and warrants for gross proceeds of approximately $6 million. As of December 31st, 2022, total cash was approximately $1.3 million. As of that date, total current assets were $1.8 million, and current liabilities were $7.8 million. At December 31st, total non-current assets consisting primarily of cash deposits held by our contract research organization was $3.2 million. Our cash number as of December 31st, 2022, does not include gross proceeds of approximately $15 million from our public offering, which was priced and closed in early Q1 of 2023. As a result of the CPP acquisition, we had debt and accrued interest on our balance sheet totaling approximately $7.2 million as of December 31st, 2022.
This includes two notes with principal balances of $6.2 million and $650,000, along with accrued interest. Both notes accrue simple interest at a rate of 5% per annum. Subsequent to December 31st, 2022, two payments were made to note holders per the terms of the notes. After payment, the principal balance on the first note was now $5.2 million, and the second note was paid in full. Looking to the cap table, as of December 31st, 2022, we had approximately 1 million common shares outstanding, and including shares reserved for options and warrants, we were at approximately 2 million shares. The shares reserved number includes all outstanding equity awards, including stock options, which were held primarily by insiders, and all warrants to purchase common stocks.
As reflected in the Form 10-K we filed earlier today, as of March 13, 2023, we were just under 14.6 million shares of common stock outstanding. As of that same date, an additional 4.8 million shares were reserved for the exercise of outstanding options and warrants. We cannot be sure when or whether holders of these warrants may elect to exercise any or all of the remaining warrants. If the trading price for our common stock is less than the exercise price of any warrants, we believe holders would be unlikely to exercise for cash. Our cash used in operations for the year ended 2022 totaled approximately $15.3 million.
During the year, the company paid $2.6 million in cash deposits to our global contract research organization, which will be held to pay clinical expenses at the end of the ASPIRE trial. Ramped up activity in the randomized trial and costs associated with their acquisition drove the remaining increase in cash used in operations. We project that cash with the Q1 2023 capital raise will take us into early Q3 2023. We will continue to focus our cash on those items in our plan which will drive value for our stockholders, such as the ASPIRE trial. Operator, can you please open the phone lines for Q&A and poll for questions?
Certainly. At this time, we'll be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Your first question is coming from Jonathan Aschoff from Roth MKM. Your line is live.
Thank you. Hi, Jennifer and Sue. Sounds like you got a full plate. I had a specific question about the stringency of the phase III futility analysis for Flynpovi in colon cancer risk prevention. You know, at this analysis, does Flynpovi need to be numerically superior to the control to proceed as is, or does it just need to be performing within some, you know, ± 5% or 10% margin of the control at interim to proceed?
Jonathan, thank you so much for your question. We actually will have two registration programs. The first, in FAP, we are still finalizing that trial design. That is the one that we'll use Flynpovi. Once that design is locked, and we've had the, you know, locked it with the input from the FDA, with our partner, we can certainly look to answer questions along those lines. For the ASPIRE trial, you know, this is again a randomized double blind placebo-controlled trial, the DSMB will have the oversight. Obviously as a sponsor, we will not know the results. Only the DSMB will know that. The threshold in there, I will have to look. I do not believe that has been put out into the public.
According to the SAP within the protocol, that is what the DSMB will follow. It is a pretty conservative hurdle, if you will, knowing the patient population and knowing that it's important for us to ensure tow things. One is that, you know, the patients are truly getting a benefit. The second, that as a company, we are utilizing our resources appropriately. That's, when that analysis does happen, we will get the thumbs up or the hold notice from the DSMB, and that is something that we would announce.
Okay. regarding the early 2024 ivospemin in-interim phase III analysis, you know, in metastatic PDA, is that for futility, just like the Flynpovi analysis, or is that for something else where data will be disclosed?
Again, for the ASPIRE trial, because it's double blind, placebo-controlled, the only the DSMB will know the data for the ASPIRE trial. They will basically just tell us to proceed or stop based on the statistical analysis plan and the data that they are reviewing.
Okay. You don't wish to make a public comment on the stringency, kind of like my first question for this futility analysis either, right?
Yeah. I mean, well, when I was talking about the stringency, I was referring to the ASPIRE trial because we don't have the final design for the FAP trial yet. That is something that our licensing partner is, you know, we are working with them, we need the feedback from the FDA, we do not have a final protocol yet. Can't comment on interim analysis or stringency at this point for the FAP trial. For the ASPIRE trial, though, absolutely, you know, we did make sure that it was a reasonable hurdle that gives us confidence that this is truly doing something for patients, because that is first and foremost the most important thing for us as a company. Again, it also translates into utilizing our resources appropriately.
Lastly, you know, what kind of treatment effect are you looking for with Ivospemin to add to nab-paclitaxel, at the final analysis, you know, to compel a market uptake?
Yeah. You know, That's an interesting question actually because when you, depending on who you talk to, right, clinicians, regulatory bodies, you know, I think the kind of, you know, base case would be at least a three-month improvement in survival. You know, when you look at the approval of nab-paclitaxel over gemcitabine alone, you know, you went from roughly 6.7 to about 8.5. You know, we certainly believe that we would like to see a more meaningful benefit of at least three months.
Mm-hmm.
This is an area that really is in need of options. We are anticipating to see at least a three-month benefit. Obviously higher would be great.
Thank you very much.
Certainly.
Thank you. That concludes our Q&A session. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.