Thank you for standing by and welcome to the iBio fiscal year 2022 results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a Q&A session. To ask a question at that time, please press star one one on your touch-tone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to your host, Mr. Stephen Kilmer with investor relations. Please go ahead.
Thank you. Good afternoon, everyone. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements regarding our current expectations and projections about future events that are subject to risks and uncertainties. Reference to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current filings with the U.S. Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ from the results discussed in the forward-looking statements. The information on this conference call is provided only as of today, and we undertake no obligation to update any forward-looking statements made on this call on account of new information, future events, or otherwise, except as required by law. On the call today representing the company are Mr.
Tom Isett, iBio's Chairman and Chief Executive Officer, Martin Brenner, iBio's Chief Scientific Officer, and Rob Lutz, the company's Chief Financial, and Business Officer. With that said, I'll now turn the call over to Tom.
Thanks, Stephen. Hello, everyone, and thanks for joining us. Today, I'd like to focus on our recent acquisition of RubrYc and the potential resulting opportunities ahead for iBio. I'll then turn the call over to Martin to provide a pipeline update and additional color on the RubrYc acquisition, followed by Rob's financial update. We believe the RubrYc transaction we announced last week is transformative for iBio. Broadly speaking, this acquisition will enable us to accelerate our mission to bring more immunotherapies to the clinic faster. Specifically, we've added a proprietary computational biology platform that has a demonstrated ability to more precisely identify molecules that have the potential to address hard-to-treat cancers and other diseases. The RubrYc acquisition includes several components. The first is RubrYc's drug discovery platform, which incorporates machine learning tools or artificial intelligence at its core.
This is a patented system that uses AI to identify, design, and create 3D models of unique binding sites, or epitopes, that may exist on cancer or immune cells. We can then use these unique models to facilitate the discovery of antibody drug candidates for epitopes that have proven challenging for standard screening and development techniques. The second element of the acquisition are all rights to the two candidates we previously licensed from RubrYc. That includes IBIO-101 and IL-2 sparing anti-CD25 antibody for depletion of regulatory T cells. As one of the few companies with such a molecule in development and the data we've published to date, we remain excited for the potential of IBIO-101 as both a monotherapy as well as in combination with checkpoint inhibitors. The other previously licensed candidate from RubrYc is what we refer to as Target 6.
Target 6 was discovered and modeled as part of our joint development agreement with RubrYc. It was identified late last year using the discovery engine and has advanced quickly through the early development stages relative to traditional approaches. The final element of the transaction is the acquisition of four new pipeline assets. These include three promising immuno-oncology candidates, plus a partnership-ready PD-1 agonist designed for autoimmune diseases. In exchange for these assets, we made an upfront payment to RubrYc of approximately $1 million in iBio common stock. Over the next five years, RubrYc will be eligible to receive from iBio up to $5 million in development milestones to be paid in common stock or cash at iBio's sole discretion. I'd like to note that the RubrYc purchase agreement terminates and supersedes the previous agreements between the two companies.
That change eliminates all of iBio's obligations for development milestones, fees, and royalties associated with both current and future licensed candidates. Pairing RubrYc's AI drug discovery engine with our existing platforms creates a biotech company with its own end-to-end discovery capabilities and an expanded pipeline of immunotherapy candidates. We see this as an attractive opportunity to accelerate iBio's transformation into an immuno-oncology-focused discovery and development company with potential synergies with our existing FastPharming and glycan array platforms. Given the significant and attractive opportunities in the immunotherapy space, we have started evaluating multiple options to extend our cash runway past our previous guidance of September 30, 2023. The options we are considering include asset sales, partnerships, cost reductions, and portfolio decisions. Those may include actions such as our decision recently to discontinue IBIO-202 clinical trials planning while evaluating partnership options for the nucleocapsid antigen.
We're reviewing multiple non-dilutive ways to raise additional capital in addition to dilutive financing if necessary. I think it's prudent to point out that while we are confident we will be successful in extending the runway, there's no guarantee of that. Now, I'd like to turn the call over to our Chief Scientific Officer, Martin Brenner, who will provide us with more detailed information on the RubrYc transaction, as well as an update on our pipeline drug candidates in iBio-202. Martin?
Thank you, Tom. Today, I'm excited to share specific details about RubrYc's AI-driven discovery engine iBio acquired last week. I will also provide an update on our lead pipeline program, iBio 101, and our COVID-19 vaccine candidate, iBio 202.
We believe the acquisition of RubrYc AI-powered discovery platform significantly expands iBio's ability to identify and develop monoclonal antibody drugs against drug targets that are either undruggable or pose a daunting challenge for traditional monoclonal antibody platforms. Therefore, this marks a significant step toward iBio achieving its strategic intent to become a drug discovery and development-focused biotechnology company. The AI discovery platform is built on a foundation of three modules that seamlessly integrate to solve the challenges of finding medicines against hard-to-drug targets. First, the technology combines computational biology and 3D modeling to identify and optimize stable artificial epitopes. Epitopes are small but important regions of targeted proteins. These artificial epitopes mimic the exact shape and form of natural human epitopes.
By selectively targeting those human epitopes, the most specific antibodies can be identified, which are usually lost or easily overlooked when the entire target protein is being used. The epitopes can be used in two ways to identify antibodies. One is by immunizing animals, which then produce antibody X against them. The other way is much faster and more efficient and uses RubrYc proprietary antibody library called RubrYc Hu. RubrYc Hu is a broadly diverse, fully human antibody library that has employed machine learning algorithms to eliminate sequence liabilities. This means that molecules from this library inherently have a high grade of developability, which should save a significant amount of time in the costly lead optimization stage. Finally, lead molecules are rapidly optimized using StableHu, an AI-enabled antibody optimization tool.
The typical brute force approach to improve a lead molecule is to individually exchange many of the antibody's building blocks to generate a multitude of molecules for characterization, which is expensive and time-consuming. Because StableHu is designed to be able to predict which specific building blocks of a molecule should be exchanged to improve a lead candidate's potency, efficacy, and manufacturability, the lead optimization phase is streamlined, which should save both time and cost. All three modules of the AI platform have already clearly demonstrated their value with iBio's pipeline Target 6, a mutated form of a protein expressed in a number of tumors. The Discovery Engine enabled the rapid identification of antibodies that selectively bind the mutated protein without binding the wild type version, which is more commonly expressed in healthy tissue.
Due to the unique characteristics of the AI discovery engine, the program could expeditiously be advanced from the early discovery to the late discovery stage and could soon be advancing into in Vivo proof of concept. We have also acquired three promising immuno-oncology programs plus a PD-1 agonist program, potentially for serious autoimmune diseases. All programs have been developed with the AI platform technology, and while two of immuno-oncology programs are in early discovery, the PD-1 asset and one immuno-oncology program have already progressed into the late discovery stage, and iBio is preparing to conduct in Vivo proof of concept studies for each program. I'll now turn to an update on our development pipeline, starting with iBio-101, our lead immuno-oncology candidate.
Our pre-IND studies have been progressing and we have recently submitted a pre-IND package for iBio-101 to the FDA. As we continue to evaluate the best strategies for iBio-101's development, we have updated our expected timing of an IND application filing with the FDA to occur in the first half of calendar 2024. Moving now to our COVID-19 vaccine development program. We previously reported that preclinical studies of iBio-202, our nucleocapsid protein directed SARS-CoV-2 vaccine candidate, demonstrated a robust antigen-specific memory T cell response. Unfortunately, data from recent IND-enabling challenge studies in immunologically naive hamsters showed iBio-202 did not provide a protective effect. Given these results, we feel it's not prudent to move forward with the IND submission we had planned for this calendar year.
Despite this disappointing news, we continue to believe there remains a need for a last dose and not a next dose of a COVID-19 vaccine. Interestingly, a recent preclinical study published in the peer-reviewed journal Science Translational Medicine similarly demonstrated that N-only vaccination provided modest protection from SARS-CoV-2. However, the study also showed that combining N with S or N + S induced more robust protection against both Delta and Omicron variants than S-only vaccination. In light of the challenge study data and iBio's prospects to secure non-dilutive funding and/or partnership opportunities for the program, we are evaluating next steps for our proprietary N antigen drug substance.
With the addition of the four new programs to our rapidly growing therapeutics pipeline through the RubrYc transaction and as part of the overall evaluation Tom mentioned earlier, we will also be conducting a comprehensive portfolio review to ensure that we manage our resources appropriately and stay focused on our goal to become a clinical-stage company. With that, I will turn the call over to Rob to discuss our financial results.
Thanks, Martin. I will start by simply speaking to a few preliminary unaudited financial highlights that we announced earlier. Revenues for fiscal year ended June 30, 2022 were approximately $2.4 million and essentially flat versus prior year. R&D and G&A expenses for fiscal 2022 increased by approximately $7.7 million and $12.1 million, respectively, over the comparable period in fiscal 2021. This reflects the company's growing investment in its pipeline, platform technologies, employees, and related infrastructure. iBio's consolidated net loss for the fiscal year ended June 30, 2022 was approximately $50.3 million.
This increased loss of $27.1 million compared to 2021 is largely due to an increase in expenses incurred to support the company's business strategy, plus $10.2 million in Fraunhofer U.S.A. settlement income in fiscal 2021 that did not recur in fiscal 2022. This was partially offset by $1.8 million in Fraunhofer U.S.A. license revenue recognized in fiscal 2022. We held cash equivalents, and investments in debt securities of approximately $39.5 million as of June 30, 2022. The company and its auditors have concluded there's substantial doubt about the company's ability to continue as a going concern. We are currently evaluating a number of potential options to expand our cash runway, which were also mentioned in last week's press release.
Regardless of whether we are able to reduce our burn rate or sell or outlet some certain assets or parts of our business, we will need to raise additional capital in order to fully execute our longer-term business plans. We believe it is likely we'll be able to implement one or more options that will extend our cash runway for 12 months or more from today. However, there can be no assurance that we will be successful in implementing any of the options that we are evaluating. Before I turn back to Tom for closing remarks, I'd like to mention our board's approval of our previously announced one-for-25 reverse stock split of our common shares becoming effective on October 7, 2022.
On Monday, October 10th, 2022 our common stock will begin trading on a post-reverse split basis on the NYSE American under the same symbol iBio. With that, I will now turn the call back over to Tom. Tom?
Thanks, Rob. We are excited with what the future holds for iBio, particularly as we created a differentiated technology-enabled drug discovery capability for our business. With a clear focus on achieving our mission to bring more and better immunotherapies to the clinic faster, our evaluation of the business and extension of our cash runway remain critical to our future success. Please note that while it is premature for us to provide any additional color on today's call about our review of cash runway extension options, we look forward to updating our stakeholders as we move forward with our continued transformation into an immuno-oncology focused company. With that, operator, please open up the call for questions.
Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. Again, to ask a question, please press star one one. One moment for our first question. Thank you. Our first question comes from Kristen Kluska of Cantor Fitzgerald. Your line is open.
Hi, everyone. Thanks for taking my questions and hope you're all doing well. First question I had is just from a timing perspective, what led you to this decision now to close on substantially all assets from RubrYc versus the original agreement that you had in place with them? Specifically, I guess what I'm trying to ask here is, was there any new information that came over this past year since that initial partnership or further diligence on the platform that led to this expansion?
Yeah, Kristen, thanks for the question. Indeed, the relationship as we've been running it for a year, we did get hands-on experience with the platform as part of the joint discovery agreement. As part of what we originally established was not only the license to iBio 101, but five seat licenses, if you will. Five additional RubrYc discovery engine opportunities to license over, you know, the coming five years. As we referenced that Target 6 that we've been talking about was the first one that we jointly worked on together and got those very favorable results. We got to see the strength of the platform in our own hands, and I'll let Martin comment on this a little bit further. That certainly informed, you know, our diligence. It was just real-world experience with the platform.
Certainly we saw some of the progress that they were making with their own other molecules as well as with other partners in the space. Martin, any additional color there?
Yeah, Kristen, hi. I think what Tom mentioned is, you know, spot on. We have been working obviously with RubrYc for the last year, and our Target 6 has been progressing really nicely. We have a proof of concept of the technology platform, validating it to at least a preclinical stage, and that gave us more confidence as well to move on.
Kristen, needless to say, you know, the what we've seen in some of the work that we've published on iBio-101 here, especially over the summer, you know, gave us some great confidence with the platform, the development capabilities. The teams have been working well together here over the course of the past year as part of the collaboration. The opportunity to have four of RubrYc's computational biologists join us and advance the work was an attractive opportunity. That was able to come together pretty nicely over the course of the past several months. That, that's why the timing sorted out the way it did.
Okay, thanks for that. Once the first asset, IBIO-101 enters the clinic, how are you thinking about the cadence of the other programs? I understand of course, that you haven't disclosed to us some of these other IO targets, but I guess how much work around this first candidate is going to be able to synergize with the other programs?
Right. Well, that's part of the portfolio review that Martin alluded to. Because of iBio-101 and the significant opportunities that we see for that, there are a number of options that we're evaluating there to prospectively increase the funding for that program as our lead asset. We're doing a review of the others because there are attractive candidates that are in there. We haven't yet made the decision fully on the stack ranking of each one of the candidates and how much, what, we want to allocate in terms of resources. The attractiveness of iBio-101 remains, you know, foremost in the thinking here, and we're completing the assessment and the prioritization.
Part of this obviously goes to cash management that we talked about a couple times here on the call, and wanna make sure that we're moving aggressively to get 101 into the clinic. At the same time that we're creating you know the opportunities that we see out there for the other assets that we just added to the portfolio.
Got it. Thanks, Tom and Martin.
Thank you.
Thanks, Kristen.
Our next question comes from Roy Buchanan of JMP Securities. Your line is open.
Questions. I guess the first one kind of follow up on the last one. Can you detail what remains to be done ahead of submitting the IND for iBio 101? Are you going as fast as you can with that, or are you capital constrained ahead of making these decisions? Then I guess for Target 6, the PD-1 agonist and the other oncology asset that Martin mentioned could be in Vivo proof of concept soon. Can you put maybe a range on how soon is soon? I kinda wanna benchmark that against these financing options. Thanks.
Right. Thanks for the question, Roy. I think that all goes to the resource allocation for the portfolio altogether. We're evaluating a couple of options. Of course, we only just completed the RubrYc transaction a couple of weeks ago. Resource allocations to the discovery platform itself necessarily. As far as the assets are concerned, there's a couple of opportunities with iBio 101. We are evaluating the clinical strategy. To your good question, are we going as fast as we can? Yes. At the same time, we're seeing opportunities here. As you know, there's a leading major global biopharmaceutical company driving forward and is sort of first into the clinic with their own version of an IL-2 sparing anti-CD25 molecule.
We're learning a lot from what they're seeing in the clinic as well as what we're intending to do. It's important for us to be looking at, you know, the opportunities that we have here for iBio 101 as a monotherapy. Then also taking a look at other options that we have, and do we or do we not double down in looking at perhaps opportunities in combination with checkpoint inhibitors. We're taking the moment here to evaluate that as we recently, you know, picked up the asset and now wholly own it. Then for PD-1, we do think that there's opportunities for that. Now that one you see us make reference to is partner ready.
We do see the immunotherapy in the autoimmune space as being attractive. Prospectively, there may be partners for that. It's well enough advanced, although, you know, albeit these are all fairly early stage. With what we have at this particular moment, we do think that there could be some interest. We'll be looking to see about prospective partners in the autoimmune space for PD-1, as well as doing the portfolio review and seeing if it would make more sense for us to invest ourselves in trying to drive that one forward. Does that make sense?
Yeah, that makes sense. I think maybe reading between the lines, I assume everything's on the table, but maybe ex-U.S. partnerships for 101 are something you're exploring.
Yeah. I think for us, I mean, 101, we're at the moment focused on moving it forward to the clinic ourselves. To your good point and what we said during the call, we're looking for both non-dilutive primarily non-dilutive partnerships for certain of the assets to move them forward and accelerate past the clinic. At the moment, iBio 101, we're planning on moving that forward as a monotherapy ourselves. With certain other molecules, we're exploring the opportunity for partnerships. Like you say, they could be regional or global or, you know, disease state specific as we go. Indeed all those options are being considered.
Okay. Got it. Thank you.
Thank you.
Thanks.
Our next question comes from Philip Barnett. Your line is open.
Thank you for taking my call. While I speak for myself, I think I also speak for a lot of shareholders who are very excited for you to come in and bring new life to iBio, but who have since been really discouraged with the lack of transparency provided under your leadership.
You came in with messages of transparency, and instead we seem to have only received obfuscation, omission and perpetual dragging of goal lines. I really appreciate Mr. Brenner's brief detail on our pipeline. It really feels like the first we've heard in years. Also very interesting to know that we're acquiring RubrYc's portfolio rather than focusing on our own incredible pipeline, which had fibrosis and swine fever and that Rituximab biobetter that you said wasn't worth pursuing. We've had so many collaborations and partnerships that have been announced over the years, and none of them have gone anywhere. We haven't even received updates that they've failed or that they're continuing. There's this wildly suspicious backdoor deal with Jim Pisano that I think you owe the shareholders an explanation of. I mean, that was incredible news. Incredible.
I've never seen anything like it. What I really wanna ask here is, iBio does not appear to be in financially good times, and I wanna be respectful, but I also wanna hold you to the fire here. You've got a very nice salary, and you recently received an options gift of two million shares with a public company that just reported a consolidated net loss of $50.3 million. Like, I believe that leadership should benefit when times are good, but times aren't good right now. If you could speak to that, I'd really appreciate that. Thank you.
Sure, Mr. Barnett. You know, I'll say first, I mean, in terms of transparency, you know, the premise there, I would dare say I think we've been quite transparent. A lot of our peer groups, in fact, don't even have conference calls. We've put out frequent updates and I think versus many of our peers, we certainly attempt to be quite transparent. You know, that being said, with regards to stock options and compensation and some of the rest, and also we'll mention with regards to transparency, when I came in with the company, you know, we initiated our first conference call. iBio did not have those in the past. We've certainly made the effort to be transparent, forthright.
When there's bad and/or disappointing news to report like we have today, you know, there's no doubt we're extremely disappointed by how things played out with IBIO-202, and I'd like to talk about that a little bit more in a moment and invite Martin to comment too. As you've undoubtedly heard on previous calls, Martin's given updates each and every time on the portfolio, and we've published around those in all of our documents. That said, with regards to stock options, of course, that's incentive compensation for any executive at any company. You know, we want to benefit from those. If we're not adding value and driving things forward for our shareholders, well, then obviously the stock price is affected.
Everybody at iBio has been working very hard to transform the company. You're probably aware of its status back in 2019. Our efforts to move it forward and create a vibrant, growing business and bring real value to shareholders, patients, and the rest is our focus. We took an organization that had a CDMO business that did not generate much in the way of revenues and made this attempt to go ahead and transform it and move it forward. With that, we started a couple of programs. We didn't have anything advanced in the clinic, so we decided to use some of the organization's capacity and capability to begin producing our own pipeline of products.
Or therapeutic candidates, I guess I should say. As those opportunities came forward, we invested behind them. In the case of, you know, I'll just come back to 202 to round out the response to your fine question. We'll note that we had put ourselves in position to get in front of the FDA, filed the pre-IND. We did, somewhat unexpectedly, get feedback that required the challenge study back in January. If you'll recall, at that time, I suppose one could say, well, should the company invest its time, money, and resources in a COVID vaccine when you had a couple of players out there already, in the form of Moderna and Pfizer, who were doing just fine, thank you.
I think a good case could have been made to say, "Well, why did we spend that money?" It was a pretty daunting challenge. The FDA was now requiring an extra step, and we had to try to move things forward with an animal model that may not be ideal for what we wanted to do. If you'll recall, that's a fair criticism, but if you'll recall, at that time, Omicron was raging, and it didn't look like, and we still don't believe. Well, I'll speak for myself. I still don't believe that it's the case that, you know, a spike, a frequently mutating spike vaccine is the greatest solution here.
Nevertheless, our team was able to do, I think, really excellent work in a supply-constrained environment for contract research laboratories and some of the rest. We were able to quite quickly pull together a study that would allow us to test out our nucleocapsid antigen, and we thought that on its own, it could provide some of the protective effects. You know, quite honestly, in a primate or a human, it's possible that an N-only vaccine could work. However, our data came back, and in the animal model in which we tested, we did not get the protective effect that we were looking for.
As we signaled back in August, even if it had been excellent, if one takes a look at the requirements to go into the clinic, how the market is shaping up, where the pandemic is and the rest, combined with the technical data that we got back, we needed to make a business decision on behalf of our shareholders and the company. We're certainly very disappointed because we did see a nice opportunity prospectively with government funding. There was a call, in fact, for plant-based vaccine manufacturers, too. I don't wanna go on too long in response to your question. There was a lot in there. Just wanted to make the point that, you know, we're making both business and technical decisions on behalf of our shareholders.
Unfortunately, sometimes the biology doesn't work out, and we have to make a tough call, which is what we did with two-o-two. I hope that addresses some of the points in your question, and thanks for it.
Thank you. Our next question comes from Juan Angel of Ally Bridge Group. Your line is open.
Mr. Barnett's sentiment, what do you suggest for, to somebody that's down 80%?
Well, I think in terms of the markets, it's in the macroeconomic environment that we're seeing, there are many biotech stocks and others that are down that percentage. You know, the macroeconomic situation for biotechs generally for the better part of the year, as I'm sure you've read and we've all seen, has been somewhat challenging. I think, as always, investors should do their due diligence and take market conditions into effect. I think in the case of iBio, as an individual investment decision, we remain excited about what we're doing in the field of immuno-oncology and in particular with the iBio one-o-one lead candidate. We think that the space, pharma tech or AI-driven drug discovery, remains an attractive one.
We, you know, intend to build value for our shareholders with a end-to-end discovery capability that includes that technology and capability.
Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your touch tone telephone. Again, to ask a question, please press star one one. One moment, please. One moment for our next questions. One moment. Okay, I'm showing no further questions at this time. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a