SanBio Company Limited (4592) Earnings Call Transcript & Summary

Hello, everyone. My name is Keita Mori from SanBio. Thank you, everyone, for attending this meeting, and I'm always delighted to present updates. Today, I am especially delighted because just this week, we completed our company's first-ever filing of our product for product approval. We will talk about this more in detail, but I just wanted to share some excitement at the beginning of this presentation. So next, please. Next please. So Page 4, I'd like to start off by the financials, by going over the income statement. So as you can see, in the past 12 months, our research and development expenses rose due to the increased spending related to manufacturing. And this was part of the preparation for the approval filing of SB623 TBI in Japan. Next slide, please. India last 12 months, this is a balance sheet. And as you can see, our cash recovery and the net assets all declined, as you can see here. And the cash is about $45 million equivalent, taking $1 to JPY 100 assumption. Based on this and based on the future of what we would like to do, we decided and we launched equity finance last month in February of 2022. Next slide, please. Going forward -- this is an earnings forecast. So going forward, our activities will continue so that we will be obtaining approval, product approval for SB623 and prepare the launch of this product. And to do this, our earnings forecast is we are going to spend about $40 million in the R&D expense and a total of about $58 million in total. I'd like to note one thing. In terms of revenue, because of the uncertainty of the drug price reimbursement, we -- in terms of the earnings forecast, we have decided not to include the revenues in this round of the earnings forecast. Thank you. So that's next slide, please. Now I would like to talk about the SB623 approval in Japan and the sales structure of the approval. As I mentioned in the beginning of this presentation, this past week, we have been able to complete the successful filing of our BLA filing to the PMDA in Japan. This is again SB623 for chronic stroke. As you know, we founded this company back in 2001. And more than 20 years, we have been working on this. And this is our company, SanBio's, first-ever submission. And this marks a historical, I think, landmark of what we have done and all of us at SanBio delighted that we have come this far. In this submission, what supported this submission in terms of the clinical trial data is the Phase II clinical study data for TBI. We looked at the motor function improvement in a double-blinded manner, which is a very rigorous way, especially considering this is a regenerative medicine. I also like to mention that this filing we filed under the Sakigake system. This is a very unique system in Japan, awarded for only the promising and innovative products, and we will be receiving a priority review from the agency for a smooth approval. As we are seeking approval on this product for TBI, TBI is a very severe and underserved disease with motor function deficit, many of the patients are having a very difficult time in their daily life. They need a very substantial amount of help from their family members and other helpers to do their daily living. For us to be able to possibly offer a new type of treatment or drug for this TBI patients and help these patients to have an independent life and possibly go back to work, active in our society and reduce the burden of the members that are helping these patients, we feel very privileged to be able to do so. Next slide, please. We have been going through this process of Sakigake. And as I mentioned, we have just completed the filing for approval in Japan. In this diagram, this is the middle box, where it says approval filing. Going forward, there will be a review by PMDA and then MHLW and then approval, drug price listing and then the sales launch of our product. Again, we are very excited, and we need to continue to work to make these things happen. To get ready, I would like to now ask our Head of the Commercial, Mr. Naoki Tsukahara, to present what we are doing to prepare for this success. So Naoki, please.

Thank you, Keita. This is Naoki Tsukahara, Business Head for Japan and Asian market. I joined SanBio last November, and I'm really excited that I have an opportunity to lead the launch of SB623 in Japan. So as shown in this slide, there are mainly 6 areas that we need to be ready before the product launch: price, medical fees, sales and marketing, medical organization, logistics systems, promotional materials and system to ensure appropriate use of SB623. We have already started to work on all of these items. But as we filed the BLA earlier this week, we will accelerate them internally and also with our external business partners. We have skilled and motivated talents in my team, and they are all committed to deliver SB623 as soon as it is approved in Japan.

So next slide, please. Naoki, thank you. We are fortunate to have a very passionate leader like you heading up the commercial readiness and preparation. Now I'd like to go on to the next section. We'd like to -- we are working -- have been working on the maximizing our corporate value. And what this means is we're trying to work towards what we can bring to patients. We like to bring many different, in diseases, new drugs and in different countries. And in this section, we would like to introduce some of the activities that we have been doing. So I would like to now ask our Chief Medical Officer, Dr. Bijan Nejadnik to share with everyone the exciting activities that we have been conducting. Bijan, please.

As Keita-san mentioned, we have passed one of the major milestones, which is submission of our BLA to the Japanese regulatory in view of our first approval. Now of course, this is a dream for any biotech to get there, and we are very happy about it. Now what is this based of? I would like to give you a little bit of the science that all of these activities was based on in order to get the successful submission done. And this is just one aspect of those activities. Now TBI, as you know is traumatic brain injury, has an acute phase and a chronic phase. The acute phase is somebody who gets in an accident, is in ICU and later on in acute award in the hospital then discharged. Unfortunately, some of those patients do not survive. But the one who do, they continue to either improve completely, but a great number of them are going to have deficits, which more often than not, there are motor deficit. Motor deficits will improve for a while but then after 6 months to a year, they start getting stable, fixed. There is no way to change them. There is some physical therapy here and there then the benefits of insurance runs out, some devices that can be used. But there is nothing, nothing that can biologically change the brain, the damaged brain, in order for those patients to be able to recuperate that motor deficit. Now that motor deficit for a younger person, and average patients in our trial was 35, but we could have gone to 70s or a younger person for so long to live, it's going to be really affecting one life and the next and the next and literally millions of life a lot at the same time. And that area of chronic phase has had little attention or has been so challenging that nobody has gotten so close than SanBio has gotten so far. Now what are the challenges in that area? One of them is that the regulatory agencies do not necessarily know how to deal with the end points and the end points are the way to measure the improvement of the change. How would you do that? The most famous one for the motor deficit is Fugl-Meyer Motor scale, which has been very good, extremely, highly used in the clinical trials. But there has not been any approval on that basis and regulatory agencies do not allow you to move forward with that just off the bat. So our work, fundamental work was to connect the Fugl-Meyer Motor scale to improvement in everyday life for the people who are able to do their life better. So the regulatory agencies who are very much thinking about the clinical meaningfulness of things, that means change in real life would have an easier time to look at the data and make that decision. And this study is square right in the middle of where it's supposed to be to explain that to some. The question was how much Fugl-Meyer improvement you need to get to that clinical meaningfulness? Or how much DRS, which is disability rating scale, you need to get to that clinically median point. How do you do that? So this is a kind of a sophisticated way, a sophisticated approach to do that. There are 3 methods that we chose, and we went to the clinical registries with thousands of patients followed over many years, in one hand. We had also our own trial of 61 patients over time that we observe. And we try to look at this end points and make it in a way to add to the science to the field for the people to know a little bit better as to how to move forward with the clinical research on these patients, reduce the anxiety as the fact that there is no -- not enough end points to look at, but also talk to the regulatory. And we have talked to the regulatory, and that has been also some effect on the fact that we were able to successfully submit at this time. Of course, we are going to go to the review and answer all the questions to the satisfaction. Now there are 3 methods which has been used. One of them, and it's in that table on the right lower side, which is very small. And I'm going to go over that with you very quickly. The one method, from the right to the left, is Delphi Panel, independent group of experts, hired by an independent organization, away from us, looking at another independent expert who has provided the scenarios, realistic scenarios to these people with Fugl-Meyer, DRS and connecting also to the GRPC global rating of perceived change by the patient and try to see what are the number of improvement that can help those patients. I'm going to go very quickly from the top and the bottom. The DRS was minus 1. DRS is high, high disability; low is better. So minus 1, losing disability by 1 number, it certainly is thought to be significant. On the lower side, you see the total Fugl-Meyer, it's 10, okay. So what are the study showed. Our study showed the same numbers as for the responders, and that was statistically significant, for example, Fugl-Meyer of 10. Now the reason why is anchor based. You take the patients, they tell you how they feel, and we do that in our trial. And that means that, for example, from 1 to 7: 1 is their worst; 7 is much better; and six is they're better, but meaningfully in their lives; and 5 is better, but not meaningful. So anything below 6, we put it aside. 6 and 7 positive. We compare that to how much Fugl-Meyer this patient have improved their DRS. The numbers here, you have a minus 2 and then 6 and 5 depending on 24 weeks or 48 weeks. And then finally, we have distribution method in which you look at a group of patients and you try to see how much they gather around certain numbers compared to each other. It's a very statistical process. And then DRS here is minus 1.4. And then Fugl-Meyer has been 9.1 and 9.2. Interestingly, in our trial, all of these numbers realized exactly the way they are. And those patients were clinically meaningful as well, was not only a number, that's translated into actual life of a patient an improvement. We are going to use that, use that knowledge in our Phase III trial. So the next slide, please. And then going to the Phase II trial, again, the STEMTRA trial, which was a Phase II clinical trial, which was run in U.S., Japan and Europe, and it was a randomized double-blind trial. And that was a study that was evaluating against the effect of SB623 in the patients I described. That study had 24 weeks data, which was published in the Journal of Neurology, which is one of the most prestigious journals for the field of neurology. And then the 48 weeks is here presented, is sent to the American Academy of Neurology for the meeting in April 2 to April 7, that was accepted for a plenary session at the oral presentation at that meeting in Seattle, Washington. The presenter is Dr. Peter McAllister, who is the Medical Director and Chief Mentor Officer of New England Institute for Neurology and Headache, and that we are very happy that abstract was accepted and we are invited to publish that paper as well. And we are very happy now that in TBI, we had a Phase II trial with the primary end point successful, with follow-up 48 weeks to be safe and the efficacy of the treatment group maintain itself. And then we are moving forward in the near future for the next step of our Phase II. Thank you.

Thank you, Bijan. As you can see, Dr. Nejadnik and his team has been doing very, very innovative initiatives and the pioneer in the field. And I think the 2 initiatives that he mentioned is just a part of the work that's being done but we wanted to make sure that we share this type of information. And as Bijan mentioned, this -- the American Neurology Conference is coming up next month. And I think, again, we are delighted that it's a plenary session out of the many hundreds of thousands of application. I'd like to continue on the -- talking about how we are envisioning to expand the benefits to patients and corporate value. And this is regarding our plan for our SB623. With our approval application filed in Japan, we believe -- with everything that we have worked today, we believe that we have created a solid foundation. And based on this solid foundation, we are going to go after beyond TBI, so that will be ischemic stroke, hemorrhagic stroke, and we have other indications to go after. Also, beyond Japan, we are going to go in the United States, Europe, China, many countries around the world. So we will be extending the benefits that we bring to our patients by going to many, many indications and globally into many, many countries. Next slide, please. Beyond SB623, we have 5 regenerative cell medicine products in total. So in addition to SB623, we have product candidates like SB618 or MSC2 and other products. And again, with the solid foundation we have established, we will be pursuing on these cell products and bring more new drugs to the patients in need. Next, please. Along the line of more benefits and the more value, I'd like to introduce a few of the initiatives that are taking place recently. This one is around the TBI, and this is in the context of the United States of America. What we have done lately is we have formed and joined a new organization called NTRC which is a national TBI Registry Coalition. This is for the U.S. And the idea is to work with the U.S. government and create a registry/database for individuals living with TBI in the United States. We would like, together with all the participants, such as Abbot and Philips and many of the leading institutions in the United States, we would like to make sure that we will be conducting a surveillance of the TBI as well as provide information for the patients that are useful, including the new therapies and services. Next slide, please. Here, I would like to touch base on our initiatives in the ophthalmology and retina area. We -- I believe we are very well known for the brain regeneration. However, the retina and ophthalmology is also a very unmet area of the disease, and we believe this is a very important area. In addition, like the brain, ophthalmology or the retina is a part of a body where there is no immune rejection. Therefore, we can use the allogeneic or scaled-up manufactured cell products to treat older patients by using the same cell product. For the ophthalmology, strategically speaking, we decided to work with an upcoming Chinese ophthalmology company called Ocumension. We signed the agreement with Ocumension in 2020 and working on looking into the development of our SB623 as well as MSC2 for the retina and the optic neuritis indications. Very recently, we are delighted to announce that we started now the preclinical studies. These are in vivo animal studies for the target indication of the AMD, age-related macular degeneration. Next slide, please. As you can see in the previous slides, we are working on many indications, and we are optimistic or opportunistic. And this is an example that we are pursuing some completely new indications. The new indication will be the esophageal implant is the new type of area. And this is something that we have not done in the past, but we found a very good partner called D&P Bioinnovations, and we are working with them by providing our cell product, and they are working on developing this new implant. We have secured a contract and the upside for this joint work to have, for example, commercialization rights in Japan and some rights in Asia as well as royalty payments outside those regions. So next slide, please. Today, I'm again delighted to have been able to announce our filing of the BLA in Japan and also what we have been doing to go above and beyond. I just like to mention one thing that, as Bijan touched a little bit, there are thousands or tens of thousands of biotech companies around the world. And only a very, very few companies make it to the goal of getting approval and commercializing their innovative products. We are very proud that we have come this far and that the approval and the launch of product is coming very close to us in our cycle. Based on this progress that we have made and the solid foundation that we established, we will pursue to bring more and more new drugs to the new patients and new areas and new countries. And as a result, we continue to aim to become the global leader in regenerative medicine. And the most importantly, we need to deliver noble therapeutics to patients as rapidly as possible. That is our mission. Thank you for attending our presentation today. And we like to thank the long-standing support from the many of the stakeholders. Thank you.