Good morning, and welcome to the Selecta Biosciences third quarter 2019 financial results conference call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors and Media section of Selecta's website at www.selectabio.com, and it is being recorded. For opening remarks, I would like to introduce Elona Kogan, general counsel of Selecta. Please go ahead.
Thank you. Good morning, everyone. Welcome to our third quarter 2019 financial results and corporate update conference call. The press release reporting our financial results and the 10-Q, which we filed, is available in the Press Release section of our website, www.selectabio.com. Joining me for today's call is Carsten Brunn, our President and Chief Executive Officer, Dr. Alison Schecter, our Chief Medical Officer, and Brad Dahms, our Chief Financial Officer.
As a reminder, we would like to advise that certain remarks that are made during this call, including without limitation, statements about the company's future expectations, plans and prospects, the potential of our ImmTOR platform, the anticipated timing of planned trials, related data readouts, and ability of results to inform future trials, our collaboration with AskBio, the development and market potential for our products, the sufficiency of the company's cash equivalents, and short-term investments, constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of Selecta's most recent quarterly report on Form 10-Q filed with the SEC, which can be accessed at www.selectabio.com.
In addition, any forward-looking statements represent the company's views only as of today, November 8th, 2019, and should not be relied upon as representing the company's views as of any subsequent date. While Selecta may elect to update these forward-looking statements at some point in the future, it specifically disclaims any intention to do so, even if management's views change. I would now like to turn over the call to Carsten Brunn, our President and CEO. Carsten?
Thank you, Elona. Good morning, everyone. I appreciate you joining us today. This was an important quarter for Selecta as we announced several key achievements demonstrating the advancement of both our gene therapy and chronic refractory gout programs. We presented new data at the recent European Society of Gene and Cell Therapy Annual Congress, which demonstrated the ability of ImmTOR to address key challenges in gene therapy, specifically the potential for redosing. Currently, it is not possible to redose AAV gene therapy treatments due to the development of neutralizing antibodies against the AAV capsid. Our Chief Medical Officer, Dr. Alison Schecter, will provide more details on this compelling data in a few minutes. In August, we announced a strategic alliance with AskBio, a proven leader in next-generation gene therapies, to jointly develop, manufacture, and commercialize a broad portfolio of life-changing AAV gene therapies.
This is a key milestone for Selecta, we are thrilled to partner with them to move this effort forward, and we anticipate entering the clinic in 2020. We'll provide further details around the initial indication and timing soon. Our development program in chronic refractory gout continues to make significant progress. We anticipate completing enrollment of COMPARE, the head-to-head trial of our lead product candidate, SEL-212, by the end of 2019, announcing interim data during the first quarter of 2020, and announcing top-line statistical priority data by mid-2020. We're also pleased that we have recently confirmed a meeting with the FDA to be held in January 2020 regarding the phase III clinical development plan for SEL-212. We're excited about the potential for SEL-212 to help patients because chronic refractory gout represents the most severely affected subpopulation of people with gout, impacting approximately 160,000 patients in the U.S.
Based on our data and quantitative market research with 100 rheumatologists, we believe SEL-212 has the potential to address many significant unmet needs in this debilitating condition and represents over a billion-dollar market opportunity. We closed a $5.7 million financing in the third quarter that consisted primarily of the management team and board of directors, which was done at market price. In addition to extending our runway, this financing demonstrates the continued confidence in the broad applicability of the ImmTOR platform. We've also made important advancements as a business. Strengthen the company's executive management team with the addition of Dr. Alison Schecter as Chief Medical Officer and Brad Dahms as our Chief Financial Officer. Alison is a physician scientist with unique experience in both early and late-stage development and translational medicine and has led several assets through FDA and EMA approval.
Brad brings deep financial and strategic expertise from his experience as an investment banker for life sciences companies. I will now turn the call over to Alison to provide some more color on our gene therapy and chronic refractory gout programs. Alison?
Thank you, Carsten. As Carsten previously mentioned, in October, we presented new data from four preclinical studies at the ESGCT, which demonstrated the ability of ImmTOR to address key challenges in gene therapy, specifically the redosing limitations, which stem from adaptive immune responses against the AAV capsid. These data demonstrate that ImmTOR enables repeat dosing and enhances first dose transgene expression up to fourfold compared to gene therapy with AAV vector alone. We look forward to the clinical development of our lead gene therapy programs in MMA and OTC deficiency and will provide further updates as these programs move forward. In terms of our partnership with AskBio, this alliance will leverage the unique proprietary technology platforms of both companies with a human proof of concept trial to validate this portfolio of products and their potential for redosing in patients.
Currently, the ability to redose systemic AAV gene therapy is limited by the development of neutralizing antibodies against the AAV capsid. We believe that our platform has the potential to increase the proportion of patients who achieve and maintain therapeutic benefit. AskBio's robust pipeline of potentially curative gene therapies, their extensive capsid library, and scaled manufacturing capabilities will accelerate the development of these gene therapies. As Carsten mentioned, we and AskBio anticipate entering the clinic in 2020. Moving on to our chronic refractory gout program, we look forward to the presentation of three abstracts of additional encouraging data from our phase II dose-ranging study of SEL-212 at the American College of Rheumatology's annual meeting on November 11th. A press release detailing the results of these studies will be issued following the meeting's embargo lift.
Turning to the head-to-head COMPARE clinical trial, we continue to advance the six-month study, which is evaluating SEL-212 against pegloticase, the current FDA-approved uricase. The trial compares the efficacy and safety of a once-monthly dosing of SEL-212, which is a combination of ImmTOR plus our proprietary pegylated uricase, the pegloticase, compared to that of pegloticase. The primary endpoint of COMPARE is maintenance of serum uric acid or SUA levels of less than six milligrams per deciliter at six months. This trial is built upon the phase II dose-ranging study, which showed that in five monthly dose cohorts, SEL-212 maintained SUA levels below six milligrams per deciliter in 66% of evaluable patients, and that only 35% of patients in these cohorts experienced flares in the first month of treatment.
The COMPARE trial will enroll approximately 150 patients, and we expect enrollment to be completed by the end of 2019. We plan to report interim data in the first quarter of 2020 and report top-line statistical superiority data in mid 2020. Finally, we look forward to receiving guidance in our meeting with the FDA in January 2020 on our phase III clinical development plan. I will now turn the call over to our Chief Financial Officer, Brad Dahms.
Thank you, Alison, and good morning, everyone. Our detailed financials are laid out in our earnings press release and will be filed in our 10-Q. I'll just highlight a few key items here. We ended the third quarter with $35.9 million in cash equivalents, restricted cash, and short-term investments, which compares to $42 million as of June 30, 2019. We believe our cash equivalents, and restricted cash will be sufficient to meet our operating requirements through the first quarter of 2020. As Carsten noted, we completed a private financing with participation primarily from the board and management team this quarter, which resulted in net proceeds of $5.7 million. The transaction consists of approximately 3.2 million shares issued at a price of $1.81, the market close price at the time of the transaction.
R&D expenses for the quarter ended September 30th, 2019, were $8.1 million, which compares with $11.9 million for the same period of 2018. The decrease reflects the timing of expenses recognized for our head-to-head COMPARE study, in addition to reduced salaries and benefits resulting from the headcount reduction in early 2019 and the completion of prior work programs. Administrative expenses for the quarter ended September 30th, 2019 were $3.7 million, which compares with $4.1 million for the third quarter of 2018. The reduction in cost was primarily the result of reduced legal fees and professional fees. For the quarter ended September 30th, 2019, we reported a net loss of $12 million, or $0.26 per share, compared with a net loss of $16 million or $0.71 per share for the same period in 2018.
I'll now hand the call back over to Carsten for closing remarks. Carsten?
Thank you, Brad. As mentioned earlier, we had an important and exciting third quarter. I'd like to reiterate that our team is focused on two priorities in the near term: executing on our head-to-head COMPARE study in chronic refractory gout and advancing our gene therapy pipeline. We're pleased to announce that we expect to complete enrollment in the COMPARE study by the end of this year and expect to have guidance from the FDA on the phase III clinical development plan in January 2020. We'll provide interim data in Q1 2020 and top-line statistical summary data by mid-2020. With regards to our gene therapy program, the preclinical data presented at ESGCT show that our technology potentially enables repeat dosing of therapeutic AAV vectors, which currently is not feasible.
Our partnership with AskBio will allow us to move into the clinic in 2020, and we could not have a better partner to drive this effort forward. I would like to conclude by reiterating our gratitude to the many people who have been supportive along the way, including our patients and their families, our investigators helping us with COMPARE, and our great team at Selecta. With that, we're happy to take questions.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Chad Messer of Needham & Company. Please go ahead.
Great. Thanks. Good morning. Thanks for taking my questions. Just to start off, regarding this update at College of Rheumatology in a few days, is it possible to discuss just how much more data might be in there? For example, how much more follow-up time we've had? Is that something you can tell us?
Thanks for the question, Chad. As we mentioned, we will have three posters there, and it is more detailed data we have shown. I think specifically what is new is a specific analysis on the gout flares, where we see that patients in one month had 35% of gout flares and there were no new initial flares after month two.
Okay. All right. These are more new sort of deeper analyses. All right.
Yeah, exactly. It's a deeper analysis. There's a deeper analysis on the correlation as well between SUA control and use of antibodies. That's the information we show here. It's more detailed information on data we have presented in the past.
Okay. All right. Thanks for that. Then just wondering if there's any update on your collaboration with CureCN, and have they ever released any data about how their single agent gene therapy study is proceeding? They've been dosing for a while now.
Yeah. To my understanding, they have not disclosed. You'll see in our 10-Q that our guidance remains unchanged, waiting to get guidance from the German authorities, as there was no real update, so we kind of took it out of this earnings call, but we're still on track as we guided the last quarter. Obviously, we are very excited about the partnership with AskBio and obviously shifting towards that.
Yeah. No. Understood. We're eagerly awaiting you to be able to say more about that. Thanks. Congrats on all the progress.
Thank you, Chad.
Our next question comes from Derek Archila of Stifel. Please go ahead.
Hi, Bill on for Derek. Thanks for taking our question. Just on the AskBio partnership, can you give us a little more insight into what you're thinking for the human proof of concept, sort of the size and length of that study might be, and then timing and kind of what you think the phasing of your R&D expense might look like as you complete enrollment of COMPARE, think about the phase III study, and then obviously the study with Ask. Thanks.
Yeah. Thanks for the question. It's an excellent question, and we definitely will guide more details in the future. I think for now, as we guided today, we plan to be in the clinic with AskBio in 2020. We have guided in the past that one of our own programs will be MMA. What we're looking at primarily is, can we prevent the formation of neutralizing antibodies? Because we think that's a fast endpoint, and that's something we can measure after 30- 60 days of giving a dose of the AAV captive together with ImmTOR. That's definitely going to be one of the endpoints that we're going to look at. As mentioned in the call, we will give more detailed guidance.
We're obviously working at high speed right now and full steam ahead with AskBio to finalize both the indication, and the clinical development plan. Stay tuned.
So just one-
The second piece is around. Yeah, go ahead.
You may not actually need to do a couple of redoses in that study. You think just showing the NAB should be enough?
Obviously, the ultimate proof will be the ability to redose and express transgene, of course. We think from the studies we've done so far, a good marker is actually developing or can prevent the formation of neutralizing antibodies. We think that's where the fastest readout to have is because the retreatment will take longer.
That makes sense. Thanks.
Just on the R&D expense as well to follow up. Obviously, once we complete COMPARE, those expense will go down significantly. We have not guided on the phase III expenses yet. Obviously, we have also not guided around the expenses in gene therapy. I think the one important note is these are much smaller trials.
Yeah. No, that makes sense. Thank you.
Thank you.
Our next question comes from John Newman of Canaccord. Please go ahead.
Hi, thanks for taking my question. This is Chris for John Newman. For the last ImmTOR poster that you guys had, one thing that was mentioned was that you can overcome low levels of preexisting antibodies. I was just wondering if that also meant that if someone was dosed with an AAV and they had a low level of antibodies, let's say, you could still use this product to circumvent that or if it meant something else.
Thanks for the question, Chris. I think I would say at this point, that's speculation. I think we have shown this in animal experiments that you actually can overcome lower levels of neutralizing antibodies. We'll have to see how this translates into human studies, obviously. Yeah. That's as far as we can say right now.
Got it. I just wanted to get the gene therapy programs in a row. Could you talk about the timing of the gene therapy programs and when they're going to be going into the clinic from first to last, just so I can get the timing straight?
Yeah. We have, as you heard on the call, we do have two programs in MMA and OTC. We previously guided that MMA will be part of the collaboration with AskBio. Around OTC, we're still in the pre-clinical phase and have not guided when we go into the clinic. As I said, we plan to take MMA to clinic. There's other indications in the collaboration which we have not disclosed yet and haven't guided to. As I mentioned earlier, once we have more clarity on which indication to move forward and what timing, we'll guide to that.
Got it. Just for the last question on SEL-212. For the interim readout in first quarter 2020, is there anything more specific you could tell us about what data we'll see? Will it be, for example, SUA, gout flares, and other things?
Yeah, that's a good question. We have not guided in detail. The question comes up, of course. I think what I can say is that we're going to look at numerical difference between SEL-212 and pegloticase at month three and month six. I think that's as far as we've guided. We'll provide more of an update once we get closer to the data readout. I think for now, we're happy that we're able to announce that we plan to complete enrollment by the end of this year.
Got it. Thank you.
Thank you, Chris.
Our next question comes from Difei Yang of Mizuho. Please go ahead.
Hey, good morning, guys. This is Alex on for Difei. I was just wondering if you could comment a little bit on the COMPARE trial in terms of the timeline, shift in the timeline there.
Yeah, thanks for the question, Alex. As every recall, we guided last quarter that we have a quarter delay, which is driven by the fact that we had extremely aggressive timelines to recruit 150 patients in the orphan disease, with completely new sites, which always takes a bit longer to get those sites up and running. We're very pleased with the recruitment rates we're seeing right now. We're not guiding to a different time for the readout. We're just looking out obviously to provide investors and all of you a meaningful interim readout. You need a certain number of patients for that. That's why we kind of moved this into Q1 next year. Otherwise than that, the timelines have not shifted or changed, and we're guiding that we're going to complete enrollment by the end of this year.
Okay. Thank you. On the gene therapy front, I was wondering if you had an update on the collaboration with Spark and then opting into additional indications?
Yeah. Around the Spark collaboration, as you recall, Spark licensed ImmTOR for the treatment in combination hemophilia A, and they have the additional right to opt into four additional indications, by the end of this year. We will hear and we'll guide to this towards the end of the year once we hear from them.
Okay. Thank you.
Thanks.
Our next question comes from Yun Zhong of Janney. Please go ahead.
Hi. Thank you for taking the question. On the meeting with the FDA in January, I guess, most likely you will not be able to have the interim data before the meeting when you meet with the FDA. If I remember correctly, have you ever had an end of phase II meeting with the FDA? If that's the case, what would be a different information that you will be able to provide to the agency?
Yeah, good question. Just to remind you, we had an end of phase II meeting in December of last year. We obviously are not disclosing our planned discussions with the FDA. I think what is important is that the COMPARE trial is independent from the phase III. I think that is very important. What we plan is as Alison mentions, to get final guidance on the phase III.
Okay. Thank you.
This concludes our question-and-answer portion of the call. I will now turn the call back over to Selecta's CEO, Carsten Brunn, for closing remarks.
Thank you, operator, and thank you to everyone who joined us this morning. We've made significant progress this quarter as we have achieved critical benchmarks in advancing the ImmTOR platform across chronic refractory gout and gene therapy. We're extremely excited about the continued growth of our company and its technology, and we look forward to continuing development to unlock the broad potential of the ImmTOR platform. That concludes today's call. Thank you.
The conference is now concluded. Thank You for attending today's presentation. You may now disconnect.