Good morning and welcome to BeyondSpring's fourth quarter and year-end 2021 financial results conference call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a brief question and answer session. As a reminder, this call is being recorded today, April 14, 2022. I will now turn the call over to Ashley Cerchio of LifeSci Advisors.
Thank you everyone for joining today's call. I would like to advise listeners that comments made on today's call may reflect forward-looking statements that are related to such matters as BeyondSpring's clinical and pre-clinical research and development activities and results, regulatory and commercial plans, industry trends, market potential, collaborative initiatives, and other financial projections, among others. While management believes that its assumptions, expectations, and projections are reasonable in the view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed during this call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of the company's Form 20-F and other filings with the SEC, which are available on the investor section of BeyondSpring's website.
Joining us on today's call is Dr. Lan Huang, BeyondSpring's Co-founder, Chairman, and Chief Executive Officer, Dr. Ramon Mohanlal, Executive Vice President, Research and Development, and Chief Medical Officer, and Elizabeth Czerepak, Chief Financial Officer. It is now my pleasure to turn the call over to Dr. Lan Huang. Lan?
Good morning everyone and thank you for joining today's call. It's a pleasure to be here today, reporting our fourth quarter and year-end results and providing an update on our progress in the past few months. After the company response letter from the U.S. FDA last November, we took steps to streamline our operations in order to extend the cash runway. Now we are focused on executing near-term opportunities for value creation. First, we're pleased with our ongoing discussions with China's NMPA on the review of Plinabulin's NDA in combination with G-CSF for the prevention of chemotherapy-induced neutropenia or CIN. The G-CSF market in China is significant, with $1.2 billion in sales in 2020 and around 30% annual growth since 2017. In addition, we continue our discussions with the FDA regarding the clinical and regulatory pathway for Plinabulin in CIN in the U.S.
Second, moving to our Plinabulin program in non-small cell lung cancer, where we announced in August and September 2021 at ESMO Conference, positive top-line data from our phase III DUBLIN-3 study. In the second- and third-line non-small cell lung cancer with EGFR wild type, which represents severe unmet medical needs with limited treatment options, Plinabulin and docetaxel combination showed significant improvement in overall survival, especially in doubling the 2-year and 3-year survival rate compared to docetaxel alone. We believe the data supports the role of Plinabulin as a potential anti-cancer treatment option in this indication. We are moving forward to target an NDA filing in China by year-end. Dr. Ramon Mohanlal, our Chief Medical Officer, will provide additional details during his remarks shortly. Finally, we continue to develop Plinabulin as a potential pipeline drug.
Using cost-effective investigator-initiated studies, we continue our development plans for Plinabulin in immuno-oncology combinations in various cancers to target unmet medical needs in patients who have failed PD-1 or PD-L1 inhibitors. We continue to see strong interest by investigators and will share additional data and updates as they become available. Overall, we're proud of the support we have received as we continue our efforts to bring Plinabulin to market. One of our validating steps was announcing last fall a strategic partnership between Wanchunbulin, our 58% owned China subsidiary, and Hengrui Pharmaceuticals, a leading oncology R&D and commercialization company in China, for the development and commercialization of Plinabulin in Greater China. Hengrui is a well-respected company with over 10,000 salespeople in China.
In 2020, the company had $4.2 billion in sales, of which $2.4 billion was for oncology drug sales. In addition, Hengrui has a leading market position with its long-acting G-CSF in China. In September 2021, we received a CNY 200 million, estimated to be around $31 million upfront payment from Hengrui, and will be eligible to receive up to CNY 1.1 billion, estimated to be $171 million in regulatory and sales milestones. We will receive all proceeds from sales of Plinabulin products and pay Hengrui a predetermined percentage of such sales. We will provide updates on commercialization plans as we get closer to potential approval in China. In conclusion, we remain committed in bringing Plinabulin to market.
As Plinabulin has a long patent life with patent protection to 2037 in 40 jurisdictions, which includes 19 granted patents in the U.S., we would have a long runway to realize Plinabulin's potential to help many patients in need. One more note, we are making good progress in our subsidiary, Seed Therapeutics. Seed focuses on differentiated molecular glue technology in the targeted protein degradation field. We signed R&D collaboration agreement on a number of targets with Eli Lilly in November 2020. Now, I will turn the call over to Dr. Ramon Mohanlal, our Chief Medical Officer, for some additional details on our development programs. Ramon.
Thank you Lan. I would like to make the following comments regarding the CIN program. First, we firmly believe that the drug works in CIN prevention. We have clinical evidence that Plinabulin increases neutrophil count through a rapid mechanism of action, acting within 24 hours after chemotherapy. This clinical evidence was presented at ASH last year. Second, we have positive data in every single clinical study for CIN that we have conducted, totaling over 1,200 patients in these studies. The data has led to multiple presentations at leading scientific conferences as well as publications in highly regarded peer-reviewed journals. Third, although we have positive clinical trial data, we do fall short in satisfying the U.S. FDA's requirement to receive approval at this time. In that, more data will be needed.
A second phase III CIN study will be required, and we are currently in discussions with the U.S. FDA to align on the design of this study. We are highly committed to bringing Plinabulin for CIN prevention to the market to provide doctors the tools to better protect their patients against CIN, which continues to be a condition with unmet medical need. Today, CIN continues to cause preventable mortality and suboptimal cancer treatment due to chemotherapy dose reductions necessitated by the occurrence of severe neutropenia. Moving on to non-small cell lung cancer, I would like to make the following points. Firstly, we firmly believe that the drug works in non-small cell lung cancer as well as other cancer indications. We have strong mechanistic evidence that Plinabulin has a dual mechanism of action in cancer. Firstly, Plinabulin has immune-enhancing effect that enables the immune system to better fight off the cancer.
Secondly, Plinabulin has a direct anticancer effect as a single agent in a number of cancer types. The second point I would like to make, we have positive clinical trial data in the phase III Dublin-3 study in non-small cell lung cancer and in the phase I trial in small cell lung cancer conducted with the Big Ten Consortium. Data from these trials were presented at ESMO and ASCO last year, respectively. Notably, in the non-small cell lung cancer trial, we had more surviving patients over a time span of four years with the Plinabulin plus docetaxel combination compared to standard of care docetaxel. In the small cell lung cancer trial, the addition of Plinabulin to nivolumab and ipilimumab more than doubled objective response rate, ORR, at more than 40% compared to historic controls of nivolumab and ipilimumab alone.
Of note, we still have one patient in the trial who failed a prior checkpoint inhibitor. Yet continues to benefit from Plinabulin after more than 58 cycles, which for second-line small cell lung cancer is highly exceptional. The third point I would like to make regarding the path to approval, what is relevant is the patient population of the trial. In DUBLIN-3, around 87% of the data was derived from China. This has brought into question whether this data set's applicable to the U.S. population without U.S. FDA discussions. This is a topic that not only affects us, but affects many companies that have derived their data primarily from China.
In the February ODAC meeting, the review of a BLA for Sintilimab, the FDA committee publicly noted that while it was convinced about the efficacy and safety of the data presented, they would require additional data that is applicable to the U.S. population. Having around 87% of the patients derived from China, however, is a distinct advantage for obtaining approval in China, as the data is highly applicable for Chinese patients. The NDA filing for non-small cell lung cancer in China will therefore be our near-term priority. We, however, will remain committed to continuing our clinical and regulatory discussions in the U.S. and other regions.
In addition to the development of Plinabulin in CIN and non-small cell lung cancer, we are developing Plinabulin and immunotherapy combinations through a number of phase I/II-III trials that are currently ongoing, and we will share the data as we receive it. With that, I will now turn the call over to Elizabeth, our CFO, for a review of our financials. Elizabeth?
Thank you Ramon. I will now briefly discuss our fourth quarter and year-end 2021 financial results. For greater detail to these results, I refer you to our press release issued this morning and to our Form 20-F filing, both of which can be accessed under the investor section of our website. With that, I will now highlight some of the key financial results. R&D expenses in the fourth quarter of 2021 were $5.8 million compared to $8.4 million in the same period last year. The decrease of $2.6 million was primarily due to lower clinical development expenses and personnel costs, including non-cash share-based compensation expenses, which were partially offset by higher pre-clinical and professional expenses.
G&A expenses were $5.0 million in the fourth quarter of 2021, and included a non-cash credit of $2.0 million related to the reversal of share-based compensation expense. This compares to $10.4 million for the prior year, which included $2.1 million in non-recurring personnel costs. The decrease was primarily driven by lower share-based compensation expense. The net loss attributable to the company in the fourth quarter of 2021 was $9.5 million compared to $17.6 million for the same period last year. For the full year 2021, R&D expenses were $36.9 million compared to $41.8 million for the prior year.
The $4.9 million decrease was primarily due to lower clinical development expense and non-cash share-based compensation expense, partially offset by higher personnel costs, pre-clinical and professional services expenses, as well as a $2.9 million NDA application fee paid to FDA, which is expected to be refunded during the second quarter of 2022. G&A expenses for the full year 2021 were $30.7 million compared to $22.6 million for the prior year. The majority of the $8.1 million increase was due to higher pre-commercialization expenses for Plinabulin, which we do not expect to continue this year.
There were also increases in personnel costs, administrative expenses, and other costs, which were partially offset by lower non-cash share-based compensation expense. The net loss attributable to the company for the full year was $64.2 million compared to $61.0 million for the prior year. Our cash balance at December 31st, 2021 was $41.6 million, and we had short-term investments of $30.7 million, for a total of $72.4 million, which we believe will be sufficient to support our ongoing operations and clinical programs over the next year. With that, I'll now turn the call back over to Lan for closing remarks. Lan?
Thank you Elizabeth and thank you to everyone who is on the call for your strong support. We are fully committed to bring Plinabulin to market to help many patients in need, and we continue to believe in its great potential. I would like to open the call for Q&A now. Operator?
Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question today, please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Thank you. Our first question is from the line of Maury Raycroft with Jefferies. Please proceed with your question.
Hi good morning. Thanks for taking my questions. I wanted to check on the China approval for CIN. You've mentioned that you're in ongoing discussions with China's NMPA for CIN. What kind of feedback on a potential approval decision have you received so far? And is there an update on what the timeframe for approval could look like?
Thank you so much Maury and thank you for supporting us over the years. The CIN NDA application is currently under independent review with the China NMPA. As you see, actually, I'm currently in China to work with our China team on the review process. We have had multiple positive meetings with CDE, which is the Center for Drug Evaluation in the NMPA, and we remain hopeful of the potential approval in China. As you also know, anything dealing with regulatory process has its inherent uncertainties. However, our optimism is based on the strong data generated in Asian patients in the 106 phase III study. We will provide the progress of the discussions with China NMPA in due course.
Okay. Understood. Well, for CIN in the United States, you mentioned running an additional study. Can you elaborate on conversations with FDA on what the additional study in CIN could look like and when that could start?
Yeah. I would just turn this question to Ramon. Ramon, would you like to answer this?
Yes. Thank you Lan. Yes, this is an important question. We have active discussions ongoing with the U.S. FDA on the design of that study. When we have more clarity, then of course, we will disclose that. We are actively discussing this study.
Understood. Maybe last question for me, just for non-small cell lung cancer, is there still a path forward in the United States? When will you learn more about what that path could look like?
Yes. Also for non-small cell lung cancer, we are in active discussions with the U.S. FDA. Those discussions are ongoing. Obviously, as I mentioned, the data is positive and will remain to be positive. I also pointed out that most of the data was derived from the Chinese population, which is an important topic in our discussions with the U.S. FDA.
Got it. Okay. I get, I guess, would another study be needed there, or could the IO studies potentially expand and would that be more of the path forward for non-small cell lung cancer?
Non-small cell lung cancer, second and third line is still tremendous unmet medical need because you will be aware that most of the IO agents have moved into first line, which in essence creates an opportunity in second and third line. That's where we are positioned. We have positive data with one study, and discussions are ongoing regarding also positioning in second and third line. Separately also as you indicate, our interest also is in first line with a number of IO combinations. We are active on both fronts. Focus on second and third line, but also strong attention to first line with IO combinations.
Okay. Thanks for taking my questions.
Thank you so much Maury.
Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your questions.
Hi good morning everyone. This is Chi on for Jason. Thanks for taking my questions. I guess the first one's on the U.S. non-small cell filing. I just want to confirm if the second half 2022 filing guidance is off the table right now as you continue discussion with the FDA. I'm curious if you have any sort of early feedback from the FDA about, you know, what's the gating factor for the U.S. filing. I understand there's sort of the dynamic of evolving FDA view about the preference for multi-regional clinical trials. I'm curious if that's sort of the driver for that discussion.
I guess certainly there is at Lilly's Innovent adcom, I think one thing the FDA took issue with sort of data generated in China was based on an older report several years ago, I think from 2016, that maybe there's some data compromise in China trials. One of the questions they asked the sponsors there were if there's any overlap with their trial sites compared to, you know, what is documented in the 2016 report. I understand there are like, you know, a few years have gone by, things have changed, but I'm just curious if there's any overlap between your trial sites and that list of China trials listed in that document. Thank you.
Well, thank you so much, Chi. Maybe I can answer this quickly because Ramon has answered a lot on the non-small cell lung cancer previously. First is, yeah, we confirm that the second half of 2022 filing for non-small cell lung cancer is for China. For the U.S., I think the current discussion is around the relevance of the overall patient population to the U.S. patients. Thanks for asking the question regarding the PD-1 agent from Lilly and Innovent, that ODAC meeting. As we know that China do provide good data with GCP qualities, so we do not see any issues with our data as we also use ICON, which is a global CRO, to conduct the study globally. In China, there are study sites there for you know.
They're all very well-respected sites, which has passed NMPA inspections. We are very confident with the quality of our data from China.
Got it. If I may just ask one quick follow-up. Has the FDA sort of initiated conversation that you may need a second trial with some flavor of multi-regional representation, or has that discussion not come up yet?
No, this discussion did not come up.
Thank you.
Thank you. Our next question is from the line of Joel Beatty with Baird. Please proceed with your question.
Hi. Thanks for taking the questions. The first one is on CIN in the U.S., and you mentioned that there will be a second study needed there. For clarity, could you point out which study the FDA considers as the first study for that setting?
Well, thank you so much Joel, and thanks for your support. This is a great question. The first study we'll consider is the 106 phase III study.
Got it.
We're seeking a combination label.
Makes sense. Has FDA explicitly said that they consider that study to be a success?
I think they consider this efficacious data.
Okay. It sounds like maybe they've had a positive tone. Yeah, it would still be a review issue at a future point of time?
Yes, but currently, we use the 106 phase III interim data attribute as the breakthrough, and the final data is consistent with the interim data, which is the positive data from the primary endpoint. We show the relevant clinical benefit in the combination compared to the paclitaxel alone. That is efficacious.
Okay.
Also, it's safe from what we see from the data, Plinabulin in this CIN dose. Ramon, you want to add a little bit more? If not, did I answer your question, Joel?
Yeah. Yeah, that's helpful.
I was-
Oh, sorry. Go ahead, Ramon.
Sorry, I was on mute. No, I would like to add, Study 106 is a combination study with Plinabulin and paclitaxel. We met the primary endpoint. The data is positive. The data is positive in many different directions. That as a study, on its own is a positive study. Obviously, with the new concept, a new paradigm with a combination approach in CIN, the FDA would like to have a level of robustness, what we already have communicated with you. To reach that level of robustness, the second study will be needed. The way the data will be looked at is, of course, in totality, once that data of the second study has been obtained.
Those discussions are ongoing with the U.S. FDA, in particular regarding the design of the second study.
Got it. Thanks for that. Maybe switching to non-small cell lung cancer in the U.S., for a trial to support that indication, would it be a matter of conducting a trial similar to DUBLIN-3, but with U.S. and global patients, you know, or would there be differences in trial design compared to DUBLIN-3?
A second study is not mentioned within our discussion with U.S. FDA. The current discussion point is the relevance of the 1-2 study for the U.S. population. Even as you see from the ODAC meeting with FDA of this PD-1 from Innovent and Lilly, FDA did say there is a certain regulatory flexibility in three parts. Number one is, you know, all malignancies. Number two is rare disease, and potentially our drug is not in the rare disease point. Number three is novel mode of action, and Plinabulin does have novel mode of action, so potentially that's an area of, you know, interest as well.
I see. Got it. Thank you.
Our next question comes from the line of Joseph Pantginis with H.C. Wainwright. Please proceed with your question.
Hi everybody. Good morning. Thanks for taking the question. I wanted to just focus on CIN as well. Let's start with China. I just wanted to get a sense, what's the role that Hengrui is playing in the regulatory filing discussions in China? Maybe a little more detail as you feel is part of your discussions as what you currently view as the rate limiting steps.
Oh, thank you so much Joe. Thanks for the great question. Hengrui is really an ideal partner for us in China because they have many drugs approved in China, and also a lot of them are innovative drugs. Currently, we are working together to prepare the answers for the NMPA review questions and they also do attend the meetings with us with the CDE.
Are there anything to point to as what the key factor is that still needs to be addressed?
Oh, we're still answering some of the review questions from the CFDA, the NMPA. After those questions are answered and then they will have final review.
Yeah. I understand.
It's a stepwise approach.
Sure, sure. Thank you for that. Then, regarding the FDA, I can certainly respect and understand, obviously not being able to provide any guidance regarding, you know, the design or scope of the second study. I guess I'll ask this question, and I'm not sure if you can answer it at this point. You know, what are the chances that BeyondSpring will conduct this study on your own versus someone else or in partnership?
Well, after the design is done, I think we plan to do it ourselves. If there's a partner coming along, I think we'll also be happy to do it together.
Okay great. Thank you.
Thank you. There are no further questions. I'll now turn the call over to Dr. Huang for her closing remarks.
Oh, thank you everyone for joining the call today, and thank you for your strong support. We will keep you posted on our upcoming progress. Thank you, and have a nice day.
This will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time.