Great. Morning, everyone. I'm Charles Higgins, a Partner at Centri, and this morning I have the pleasure of introducing Bob Bitterman, who is the President and CEO of Phio Pharmaceuticals, a Nasdaq company. Bob has a very long and distinguished resume, but I prefer to have him go through his presentation and entertain your questions. Bob, the stage is all yours.
Thank you, Charles. Just make sure I have the right clicker here. Okay. Well, thank you very much for taking a few moments to hear the Phio story today. We are a biopharma company. We are involved in immunotherapy. Our focus is primarily skin cancers. With that, we have a very fascinating technology, which works in a way that actually makes our immune cells more effective in killing our tumor cells. With that, let me start by presenting our forward-looking statement since we will be making a few forward-looking comments. I'll jump right to what I believe is the Phio value proposition, which essentially centers on three things, the size of the market that we're dealing with, and the fact that it is currently unsatisfied. We secondly have a very fascinating technology called INTASYL, which is short interfering RNA.
I'll be talking about that in more depth. Finally, the last piece of this is a very lean, ultra lean virtual organization consisting of eight employees and four subject matter experts. The total development team actually has worked with each other in the past in prior companies, so we're all very familiar with each other. It's a great development team that's had a track record in getting drugs approved through FDA in a past life. With that, talk about the market for a moment. Cutaneous squamous cell carcinoma, it is the second largest incidence of solid tumors in the human body. There's about 1.8 million of them annually. It has a mortality rate that almost is twice that of melanoma, which is something that many people don't realize. It has an addressable market, which is believed to approach $20 billion.
The incidence is rising because the population is getting older. Our technology, called INTASYL, is short interfering RNA. It's a drug-like technology. It is broadly patented into the year 2044, and it has demonstrated just recently in a completed phase I-B trial, very interesting, fascinating, remarkable, if you will, efficacy, as well as having a very safe profile as well. A little history on the company. The company was originally founded or co-founded by a gentleman named Craig Mello. He actually won the Nobel Prize for discovering RNA interference. This became really the core, the basis upon which our portfolio today, which is done with INTASYL, was developed. It's a synthetic version of fragments of RNA, and it's been around for a handful of years now, but with very successful output, as I will describe in the results of the study.
The unique thing about the technology, it has the ability to precisely and selectively target the gene that is basically creating the issue when it comes to skin cancers. There are 10, 15 million-20 million genes in the body. This technology has the ability to basically isolate the one gene that is causing the problem, and it shuts it down, and we're going to talk about that in a minute. What it does is the various genes are instructed with messages from our DNA to basically communicate those messages, and one of them is to produce, in the PD-1 gene, to produce protein, which actually, in a normal, balanced, healthy body, is fine. In the presence of certain tumor cells, the presence of this particular gene called PD-1 actually neutralizes or makes inert our T cells, which are our main body's defense in the body.
What we do is we basically send a message to turn off the production of PD-1 inside the T cell. In so doing, the T cells reawaken, they become reinvigorated, and ultimately go about doing their job, which was intended to kill the tumors. This is a very quick picture of what this looks like. Essentially, we have two asymmetric strands of fragments of RNA that have three interesting characteristics that are the basis upon why the technology works and the basis of our intellectual property, first of which are very specially designed sequenced nucleotides that basically only target the gene that we want it to target. It does not target others, so it becomes very selective. The composition also has a very interesting characteristic with a cholesterol element that allows the drug to be transported intact across the cell membrane.
In so doing, it allows the drug to actually go and do exactly what it's intended to do, which is to silence that gene. The third element of this is that there are elements in the formulation that basically protect the drug from destabilizing through nucleases that normally in the body would break these things down. It is based on these three features that the drug is doing what it's supposed to do, and it also becomes the basis for a very rich and broadly patented patent portfolio. There are 54 patents that are issued with more pending. Majority of these deal with immuno-oncology, and many of them deal with a particular lead program that I'm going to talk about in a minute. The patents extend not only on the composition of matter, but also we patented gene targets.
We created compounds that basically target those various genes, and also therapeutic indications as well. Our strategy basically is pretty much twofold. The first thing is that we have two programs that we internally develop out of our portfolio of compounds, and the rest of them, we're looking to monetize items that we deem to be non-strategic parts of our portfolio through out-license. Because as I said, we have a very small company with eight people, limited cash resources, we have to put the concentration and the effort in the place where we believe we could get the best return. These two focus programs, the first one is called PH-762. It is a PD-1 silencer. In other words, we're shutting down that particular protein in order to make the T cells become reactivated.
That study completed its phase I-B trial in January, which had very interesting results in both safety and efficacy, and I'm going to talk about those in a few minutes. The second program is a silencing agent called PH-894, which silences a different gene, which is implicated in a number of different cancers. That program essentially has all of its IND-enabling studies completed, and once we get the clear focus as to where we're going next on 762, we will basically be identifying an indication for this other program, and we'll proceed with that as well. Why did we choose 762 as our lead program? Well, I mentioned that it's a very large market, and in fact, you can see from here, if we just take out basal cell carcinoma from the equation, this represents over 50% of all the solid tumors in the human body.
There's what? 1.8 million of them annually. Size of market was one of the first things that we looked at in terms of where could we get a return in a medically meaningful space for both advancing medicine and at the same time giving a return for our investors. There were a couple of other things that we looked at in the process as well. In terms of risk mitigation, PD-1 as a gene had already been validated by large pharma companies in their monoclonal antibodies. They were able to attack the PD-1 on the surface of the tumor cell. We, through our animal studies, initially learned that we could turn off PD-1 at its source within the T cell itself. The difference being is that we were turning this off almost like a faucet or a spigot turning off a water flow.
By doing so, prevent the flow of PD-1 from going to the tumor. In contrast, the monoclonals are basically attacking it after it's there. When doing so, they also do so with a rather significant degree of serious adverse events that affect the autoimmune system of various parts of our body. Lastly, the competitive landscape, interestingly, was pretty limited. There were not that many players that were in this space. Part of which is that the databases were never clear because the medical coding never got specified to cutaneous squamous cell carcinoma. It was called other non-melanoma tumors. As a result, most of the databases never captured the real magnitude of this until recently in the last year.
With that as a risk mitigation strategy to find a program to go forward with, we filed an IND with the FDA, and when it was cleared, we had the clearance to study late stages of melanoma, Merkel cell, and cutaneous squamous cell carcinoma, but also to study the very early stages of cutaneous squamous cell carcinoma. These would be stages one and two, where the size of the lesion was three centimeters or less. The interesting thing here is that there is no FDA-approved drug to treat stages one and two. The fallback standard of care is surgical intervention, and if left untreated in its early stages, it will evolve to stages three and four, and as I mentioned, the mortality rate on this particular disease is almost double that of melanoma.
There's nothing wrong with surgical intervention as far as a treatment method, but I think when you look at the surgery, the impact of a wound, and you consider maybe the question, how big a hole do I want to cut into my skin? How often am I going to have to do that? Because many of these squamous cells, they recur. They come back. Depending on the size of the tumor, depending on the location on the body, and the patient's general health, it really calls for an alternative as a nonsurgical option. We embarked on commencing a phase I-B clinical trial with 762. It's intratumoral therapy. We inject directly into the tumor. The treatment phase was completed in January of this year.
It was designed to treat 24 patients in five dose-escalating cohorts with four intratumoral injections over a three-week period. At the end of week five, there was a resection of what would be the residual lesion at that point in time, looking for, obviously, safety, pathology tumor results, meaning histology taken to see how much cancer was remaining, and also a pharmacokinetic analysis. 22 patients completed the trial. 20 of them were cutaneous squamous cell, one Merkel cell, one melanoma. With that, the clinical efficacy here is quite striking, if I must say so. In the dose escalation over five cohorts, in the last cohort, we had four of six responders having 100% tumor clearance at week five. This was with a dose that was 20-fold greater than the doses that we were using in the first cohort.
Overall, that's an 85% response rate in cohort five. If you look at this across all the cohorts that had increasing levels of drug concentration, it was still 65%. This was quite striking. It raised the eyebrows of quite a few people. Looking at it from a standpoint of safety, we had no immune-related conditions or any dose-limiting toxicities in any of the patients that were treated through all of the cohorts. That was despite the fact that the dose increase was 20-fold from the initial amount. Why is that? Well, part of this is probably due to the direct injection into the tumor, which essentially eliminates off-target serious adverse events, which are typically associated with monoclonals. Monoclonals are systemically infused throughout the entire body.
They have to travel through a lot of places to ultimately get to the tumor, which is where the PD-1 needs to be knocked off. In our case, we're injecting it directly into the tumor, and it's basically a localized injection. The other factor here is that the formulation of the drug is unique in that it does not have any types of vehicle enhancements that are required to get it across the cell membrane. Our drug is basically transported to the target with nothing other than sterile buffered saline solution. Many of the other drugs that are injected have lipid nanoparticles, or they'll have viral vectors, all of which are locally toxic as well, but our drug does not have those. Couple of other factors about this study, and about 762, there's a convenience factor because it's administered in the physician's office.
It avoids, therefore, the logistics of having to go to an infusion center if you have a monoclonal that's going to be infused directly into the body. It minimizes the aftercare associated with surgery, which can take several weeks and put limitations on the body during the healing period. Finally, it has flexible dosing, so it accommodates the various size of the lesions that you need to treat. From an economic point of view, office visits basically drive physician practice economics, so every time a doctor is making an injection, that's basically good for his practice. There's no capital outlay like some therapies for the physician. Finally, our drug product, as well as the active pharmaceutical ingredient, are sourced in the U.S., so it minimizes any variability that might be associated with changes in tariff laws based on the current economic conditions.
What do we have at this point in terms of positioning? Well, we have a drug that is basically sparing tissue. It provides safety and convenience because it eliminates, if not reduces, the tumor, and therefore it minimizes surgical excision as well as reconstructive surgery, which is often required after surgery. It has a very favorable safety profile. As I indicated, there were no serious adverse events through the highest theoretical maximum dose concentration we could put into the formula. It's convenient in the physician's office for both the doctor and the patient, and it provides a good revenue stream for the doctor as well. What are the next steps? At this point, the next study is being designed as we speak. We believe that we'll be moving toward a phase II-B adaptive phase III trial.
We'll be seeking guidance from the FDA, having accumulated all of the data from this first study. We expect that we'll be seeking information from them in Q2, with input received from FDA sometime in Q3, with the intention then to go and move into a next phase trial in the first quarter of next year. One other program, which I'll talk about just briefly, which is the secondary backup program in the portfolio, is 894, and this is selectively targeting the BRD4 gene, which is implicated in a number of different cancers. This particular drug is unique in that it does two things. It not only kills the cancer directly, but it stimulates the immune cells to go after it and kill them as well.
As I mentioned, we have basically completed the required IND-enabling studies and expect that this program will be addressed sometime after we get feedback from FDA on the first 762 program. Strategy. I talked about monetizing non-strategic assets through out-license. When this company was originally set up, the scientists were quite prolific in terms of the number of different compounds that they were able to, in a sense, confirm that they could silence. Many of them, we're not going to go into these, but many of these could be very applicable to other large pharma companies who can see these as having implications in other forms of cancer. In addition, based on what we saw in 762 with the intratumoral therapy, we basically have developed a proof of concept in silencing the PD-1 gene in cutaneous squamous cell.
PD-1 is implicated in a number of other cancers as well, so there are other potential applications in solid tumors for this particular compound. Here are just a few examples of other cancers that could be opportunities in the oncology area, lung cancer, renal cancer, head and neck, bladder, colorectal, hepatocellular, cervical, esophageal, a number of them. There's plenty of opportunities for companies that may want to become interested in this particular type of intratumoral therapy. Second last point is talk about cash. Our cash on hand extends us into this first half of next year, and with that, at the end of our 10-K, we reported cash on hand at $21 million at the end of the year.
We recently set up an ATM, which has shelf capacity of $6.3 million. We also had done previous financings going back into last year where there was a number of warrants, basically straight vanilla warrants, no ratchets, no other tricks to them to adjust the value. They're exercisable at $2.05. That does provide, potentially, with a couple of maybe successful inflection points in the near future, the opportunity to basically pick up additional cash from that. Currently, we sit with 11.6 million shares outstanding, and the warrants are in total 13.4 million, and we have no debt. With that, I will come to a summary and say Phio Pharmaceuticals is a fascinating company given the INTASYL technology, short interfering RNA that gives us precision silencing technology to only target the gene that we want to target.
It's now been established in terms of its safety and efficacy in this phase I-B trial. It has extensive intellectual property that runs out through the year 2040, and it has a leadership team that is validated by its track record over the years, having received approval in prior companies for drugs, maybe five or six of them in fact, that are small molecule dermatologicals. Lastly, this is a market that in and of itself could be as high as $20 billion in terms of its revenue. With that, I think we go to kind of our tagline at this point, which is INTASYL and Phio, making immune cells more effective and killing cancer cells. With that, I have five minutes and 20 seconds left on the clock if anybody wants to ask me any questions.
I am known to answer just about anything you want to throw at me, so it's up to you. Yes.
Bob, when you look at the data from the cohort studies.
Mm-hmm
Ahead of the FDA meeting, is there anything that you didn't expect, things that were more effective or safer than you expected? Anything you think the FDA will find positive or negative?
Well, from a safety point of view, the FDA's always trying to find where there is a dose-limiting toxicity. Originally when the study was designed, there were a number of other intervals. There was more than five because we thought we might have to go in half steps, and we never had to do that. Each cohort, those patients emerged. It was unremarkable from a standpoint of safety other than some transient needle point or needle site injection points, which were basically transient and went away within a day or so. From the efficacy point of view, we were very pleased to see the results, and especially it appears that as the dosing concentration is increasing, that the efficacy appears to increase as well.
With that and with the fact that it still appears to be the fifth cohort was as safe in the highest dose as was the first cohort. That gives us pretty good target in terms of where we're going to be setting the dosing for the next trial. Other things, no, right now there's a lot of data being looked at. Where are the lesions located? What was the response based on a size between one centimeter and three centimeters? Is there a difference in terms of males versus females? All that stuff, but there's really nothing that remarkable in that data that we see at this point. We'll have it analyzed six ways till Sunday before we give our response to the FDA. Yes.
Just on the capital markets. So with your cash extent, maybe to already 2027, and your FDA second phase comes second quarter of this year, how you think about the next capital raise.
I think about it every night, probably between 3:30 A.M. and 5:00 A.M. That's really the biggest challenge that small biotech companies have is the ability to continue to raise capital as needed. Right now, I'm probably worrying about it a little bit sooner than I need to. We're looking at different options that could be available to us, and with certain inflection points that may be on the horizon, such as getting a definitive response from FDA in terms of exactly what they want to see in this next study. That probably would be kind of a concrete measure of taking uncertainty out of the minds of certain investors. I would say at this point, any and all things are on the table with an emphasis on trying to minimize the dilution of existing shareholders.
Well, right now we do have an ATM in place that we set up last week, and that has $6.3 million available if we want to tap into that. We're not going to tap into it at these prices. We don't need it, and I'd much rather look at that maybe 200% on the share price ahead of where we are now when we get there, hopefully. A PIPE is feasible. Past financings did have warrant inducements, and that did create a certain amount of activity in hedge funds, which did create a bit of volatility at different points in time in December as well as in mid-February. To the best of our knowledge, most of the hedge fund activity, except for their warrants, I think they're basically out of the stock at this point.
We'll know for sure around May 15th when they have to file their next 13Gs, but I think they're essentially gone. Okay.
Anything else with 56 seconds to go? Well, I try to do my best to stay within the time zone here, and I haven't failed on this yet, so I've got my track record going. Okay, well, thank you very much. I appreciate you coming and hearing the story.