Good morning, welcome to the BiomX first quarter 2023 financial results and corporate update conference call. Currently, all participants are on a listen only mode. There will be a question and answer session at the end of this call. I would now like to turn the call over to Marina Wolfson, Chief Financial Officer of BiomX. Please proceed.
Thank you, and welcome to the BiomX 1st quarter 2023 financial results and corporate update conference call. The news release became available just after 6:30 A.M. Eastern time today and can be found on our website at biomx.com. A replay of this call will be available on the investor section of our website. Before we begin, I'd like to review the Safe Harbor provision. All statements on this call that are not factual historic statements may be deemed forward-looking statements. For instance, we're using forward-looking statements when we discuss on the conference call potential market opportunities, the design, aims, expected timing and interim and final results of our pre-clinical and clinical trials, the sufficiency of our existing cash equivalents and short-term deposits, and the potential benefits of our product candidates.
In addition, past pre-clinical and clinical results as well as compassionate use are not indicative and do not guarantee future success of our clinical trials. Except as required by law, we do not undertake to update forward-looking statements. The full Safe Harbor provision, including risks that could cause actual results to differ from this forward-looking statements, are outlined in today's press release, which as noted earlier, is on our website. Joining me in the call this morning is Jonathan Solomon, Chief Executive Officer of BiomX. With that, I will turn the call over to Jonathan.
Thank you, Marina, and good morning, everyone. BiomX continues to make significant progress with the development of our lead product candidate, BX004, for the treatment of Pseudomonas aeruginosa, or PSA, infections in patients with cystic fibrosis, or CF. In February 2023, we announced positive results from part 1 of our ongoing phase Ib/IIa trial. These results were better than we had anticipated, particularly with respect to the notable reductions observed in PSA bacteria burden. Enrollment in part 2 continues to progress well, and we expect to report results in the third quarter of 2023. As a reminder, in part 2 of the study, we're dosing CF patients with BX004 twice a day, but over a longer 10-day treatment period compared to part 1.
Part 2 of the study is designed to provide additional data on safety and reduction in PSA bacteria burden along with other exploratory endpoints. As a reminder, PSA infections are highly pathogenic and represent a leading cause of loss of lung function in people with CF. After a CF patient has been infected with PSA in his or her lungs, it is exceptionally difficult to fully eradicate the infection, even with multiple courses of antibiotic treatment. PSA infections often persist over a period of several years. Unfortunately, treatment with antibiotics begins to wane over time. BX004 as a therapy is designed to directly address the significant and unmet medical need in CF. I'm pleased to note that we had the opportunity to strengthen our balance sheet during this quarter after announcing part 1 results.
On May 4th, we closed the second part of a private placement which altogether raised total gross proceeds of approximately $7.5 million. We would like to thank our existing shareholders, which include OrbiMed and the Cystic Fibrosis Foundation, who led this financing. As a result of this funding, together with our existing cash reserves, we expect that we'll remain well-funded through this time period when we expect to announce part 2 results. In addition to strengthening our balance sheet, we also had the opportunity to expand our board of directors. Last Friday, we announced the appointment of Jason M. Marks and Michael E. Dambach to the board of directors of BiomX. Jason most recently served as Executive VP, Chief Legal Compliance Officer, and Corporate Secretary with Amarin Corporation, and Michael is Vice President and Treasurer of Biogen.
Both of these highly accomplished individuals bring in-depth corporate experience to our boards as seasoned executive leaders within the life science industry. As BiomX continues its plans to grow and expand the BX004 clinical program, Jason and Michael will undoubtedly bring invaluable perspective to help guide our decision-making on a wide range of financial, regulatory, and legal issues. I'd now like to turn the call over to Marina to review our financial results for the first quarter of 2023.
Thank you, Jonathan. As a reminder, the financial information is available in the press release we issued earlier today and also in more detail in our Form 10-Q, which we expect to file later today. I will walk you through some of our brief highlights. As of March 31, 2023, cash balance and short-term deposits were $30.3 million, compared to $34.3 million as of December 31, 2022. The decrease was primarily due to net cash used in operating activities, partially offset by proceeds from the first closing of our PIPE financing. Research and development expenses net were $4.6 million for the three months ended March 31, 2023, compared to $4.9 million for the same period in 2022.
The decrease was primarily due to reduced salaries and related expenses and stock-based compensation expenses resulting from a reduction in workforce as part of the corporate restructuring we announced in May of 2022, as well as deprioritizing pre-clinical and clinical activities related to our atopic dermatitis product candidate, BX005. Partially offset by expenses related to conducting the phase Ib/IIa clinical trial of our CF product candidate, BX004. General and administrative expenses were $1.6 million for the three months ended March 31st, 2023, compared to $2.5 million for the same period in 2022. The decrease was primarily due to reduced salaries and related expenses, stock-based compensation expenses due to reduction in the workforce as part of the corporate restructuring, as well as a decrease in the company's directors and officers insurance premium.
Net loss was $6.4 million for the first quarter of 2023, compared to $8.2 million for the same period in 2022. Net cash used in operating activities was $5 million for the three months ended March 31, 2023, compared to $7.4 million for the same period in 2022. We estimate that existing cash equivalents and short-term deposits will be sufficient to fund the company's current operating plan into the third quarter of 2024. Now I'll turn the call back over to Jonathan for his closing remarks. Jonathan?
Thank you, Marina. As we enter the second half of 2023, BiomX is well positioned to deliver on key clinical milestones in our BX004 program. We obviously encouraged by the results from part 1 of the trial, which we believe could serve as a positive indicator for the results we hope to achieve in part 2 of the trial. While great strides have been made over the last two decades to significantly increase life expectancies of CF patients, we also know that chronic and life-threatening infections remain the number one cause of morbidity and mortality in this patient population. Our BX004 program is squarely aimed at addressing the significant unmet medical need. We look forward to expanding this program to help bring forward an important new treatment option for the CF community. With that, Marina and I would be happy to take your questions. Operator?
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we call for your questions. Our first questions come from the line of Joseph Pantginis with H.C. Wainwright. Please proceed with your questions.
Hey, everybody. Thanks for taking the questions. Good morning. Good afternoon. A couple questions, Jonathan. First, as we look towards the part 2 data, it's longer dosing. Patients are getting a lot more, phage cocktail as well. I guess how can we possibly link the anticipated bacterial load reductions with potential impacts on FEV? Sorry. Is it long enough for part 2 treatment to be able to see an impact?
Hi, Joe, and good morning. I think you're raising a really important question, right? The part 1 was effectively only 4 days of 2x a day dosing, right? Part 2 is 10 days of 2x a day dosing. Part 2 is definitely longer. I think as you know, we kinda were not expecting much of a signal in part 1 and quite pleasantly surprised. I think part 2 was mostly designed actually to see that bacterial reduction. I think in terms of our expectations, what we wanna see is a replication of the significant effect that we've seen in part 1, and kinda get a robust response of bacterial reduction. In terms of FEV1, it's still a relatively very short period of time and still very few patients, right? I do think the expectations.
Ladies and gentlemen, please stand by for technical difficulties. Please stand by. Okay, everyone, thank you for standing by. We do have the speaker line back in.
Hey, Joe, I'm sorry. I don't know if you missed my answer. Let me know if you wanna repeat it or you wanna go for the second part of your question?
Actually, can you hear me?
I can. Sorry about that.
Okay, great. I lost you when you were talking about the relatively short time of treatment to be able to see a potential impact in FEV or not.
Yeah. I do think, you know, it's longer than part 1. It's still rather short. You know when you wanna see signals in FEV1, patients are dosed for much longer. You look at the antibiotic studies, they're usually months. I do think, you need a much longer period to see the effect. We do know there's strong correlation between bacterial reduction and clinical improvement, but it usually takes longer.
I think we.
You know, kind of moderate expectations on FEV1 .
Of course, that was a key thing I was hoping to ask about.
Yeah, yeah.
You hit it.
Sure.
My second part is certainly in the realm of the forward looking statements. I don't know if you would like to even take potential broad strokes with us today. Assuming part 2 is positive, can you give us a sense of what you might be considering, I'm using my words carefully, with regard to next steps, you know, clinical trial designs, regulatory steps? Would this be a potential candidate for things like Breakthrough Designation, you know, based on the unmet medical need?
you know, it is a forward-looking statement, but I think the key. I'll try to venture where I can go, right, without being, you know, giving dirty looks from the council.
We won't hold you to anything right now.
I think it's, as you said, the key is actually the dialogue with regulatory, right, with the agency, as well as I think our strategic partnership with the CF Foundation, right. I think these are the two key parties, we expect, after the data that we'll receive in part 2 to go, you know, hand in hand with the CF Foundation and talk to the agency. I do think, you know, it is an unmet need, right. Remember, these patients that are on this treatment are already on chronic antibiotic treatment. They don't have any options. I think, of course, a breakthrough orphan indication, you know, Accelerated Approval, these are all the things that we should consider.
Again, we look forward to working hand in hand with the agency, and the CF Foundation to try to pursue anything that gets us faster to approval.
No, completely fair. Then I guess you could call it a logistical question because, you know, especially in this day and age, you know, everything still remains focused on resources, and you guys have been very cognizant of this. With that said, is it still just resource based and when you'd might to look to, ramp up your pipeline assets such as atopic or beyond?
Yeah, it's exactly that. I think we're seeing, right, we're seeing more interest generally in phage, right? It was great to see The Economist run a piece on phage and Nature Biotechnology and seeing data from our peers. It's kind of picking up, and with that, we're getting incomings from patients as well as interest in additional indications, right? I think we're also, you know, we wanna pursue these additional indications because I think there's more interest and, you know, again, more data coming from compassionate use. You know, we need to be disciplined. Hopefully, if we make progress with part 2 and we're better financed, I think we'll eagerly kind of expand the pipeline.
Great. Thank you, Jonathan.
You bet. Pleasure as always.
Thank you. Our next questions come from the line of Michael Higgins with Ladenburg Thalmann. Please proceed with your questions.
Thanks, Everett. Thanks, guys, for taking the questions. Good afternoon to you, Jonathan. Congrats again on the part 1 results. As we're looking to part 2 coming up here in Q3, you talked a bit on the call here about the longer duration of treatment. Can you walk us back through as to what we saw exactly in part 1 with AdMed? There's still an escalation part there, and how that dose relates to what the patients are getting in part 2. Is that at that highest dose? Any more detail on that? We're getting questions on that from i nvestors would be helpful. Thanks.
Sure. First, good morning, thank you for joining the call, Mike. In part 1, right, the dosing was kind of short. It was a study that was planned for safety. We had nine patients. Seven were on treatment and two were on placebo. Basically, all the patients on treatment got the same regime. They all got on day one, placebo. On the second day, they got a low dose. On the third day, they got a high dose. They got four consecutive days of twice a day dosing, right? If you go back, we knew from the compassionate cases in the past that it was a roughly 10-day treatment twice a day that led to bacterial reduction. That's why I think we had low expectations in the part 1.
Kind of said, "Look, it's only 4 days versus the 10 days, not very, many patients, so the likelihood of seeing an effect is low." In part 2, which is 24 patients randomized 2 to 1, dosed 10 days twice a day, was actually kind of the replication of the compassionate use cases, right? part 1, what we saw, again, was extremely encouraging and surprising, was an average of 1.4 log reduction. That's like a 95% reduction from baseline. We've seen 1 patient with a 3.3 log reduction. That's like 99.96%, reduction in bacterial count. We've seen 2 patients with a 2 log reduction, 99%. 2 patients with log reduction, 90%.
Compared to the placebo, that was around 0.3 log, which is within what's accepted. We know the noise of the assay is up to like half a log. It kind of was a well-behaved placebo, quite dramatic effect in the treatment. I think that's where we're very encouraged, right? That kind of gave us confidence to move forward to part 2, which is a longer duration, and that's where we're expecting, you know, replication, hopefully a more robust signal.
I guess part of the question, too, and thanks for all the detail there, is what you are guiding investors to look for from part 2, where, as you said, it's BID 10 days, and you had, you know, a couple days of increasing the dose, 4 days BID. It's the same dose we're testing in 1 log and 2 log now. How do we look for the efficacy of part 2? More of those with the 2 log , 3 log reduction, less of those with a 1 log or a 0.3 log . You know, we don't wanna get out over our skis, but it's hard not to get excited about this and to see what happens with just 4 days.
Right. I think it is we are dosing for a longer period of time. I think we don't understand completely the phage dynamics and benchmarks and saying, you know, with antibiotics, when they were effective in the nineties before the all the antibiotic resistance, we saw an effect of like 1.5 log to 2 log, right? I think that's sort of what we wanna see. I think we'll be content if we can kinda take back the clock to times where the bacteria and these patients were actually responding well to antibiotics. I think if we get a replication, hopefully with more patients of what we've seen in part 1, we're already pretty happy, right? I think that's where we wanna put the threshold.
Hopefully longer duration can get, you know, even a greater effect.
Fair enough. We'll sit and wait. That was kind of one long question. Apologize. We'll try put this.
No, no, but that's, that's the big question, right? You're.
Yeah. Yeah.
totally spot on. I think that's the big question. Again, we weren't expecting to see this kind of data in part 1. I think we're all kind of surprised and, you know, I think we wanna see that we can replicate the data if we can, right? Extremely encouraging because as we said again, these are patients who have been chronically antibiotics, right? They're not really responding anymore. The opportunity to kind of take back the clock and have such dramatic reductions opens up a lot of optionality and hope for these patients.
Yeah. I'll just add in my color on this is with proper phage identification and approach to the site of infection, which you've got here with this delivery system, it does happen pretty quickly. I don't know if we're gonna see that much of a difference here, but we'll see over time, obviously. In February you mentioned possible changes to part 2. Are there any there? At what points during part 2 are you collecting sputum samples? Thanks.
Sure. So far so good. I think we're proceeding as planned. Patient enrollment is going very well. I think there is broad appreciation in the community of the data that we had in part 1 and in general, I think of the potential of phage therapy. We're keeping our guidance to as planned with data the third quarter.
At what points during the part 2 do you collect sputum samples? Obviously baseline, but then how often and what points after that?
It's a 10-day dosing, so we do before and after treatment. Then we do a week after treatment and 28 days after treatment. Then a longer duration after that, like a follow-up. You know, we're mandated to have a phone call 6 months later after treatment.
Okay. during the 10 days, there's no additional sputum collected, just baseline and day 10, correct?
Correct. I'm, let me be correct. I think we're also looking in terms of comparability, we're looking at day four as well. Just to kind of benchmark the part 1.
Okay. Appreciate all the feedback. Thanks, guys.
Okay. Always a pleasure.
Thank you. There are no further questions at this time. I would now like to hand the call back over to Jonathan Solomon for any closing remarks.
Thank you. I just wanted to thank you all for taking your time this morning and wish you all a good day and good luck to us all. Thank you.
Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.