Syntara Limited (SNT) Earnings Call Transcript & Summary

Good morning, everyone. The clock has just ticked past 11:30, so we will get started with today's quarterly investor briefing with Pharmaxis CEO, Gary Phillips, who's going to provide an update on the clinical trial program. My name is Alfred, and I'm from Pharmaxis' Investor Relations team, and obviously online to assist with running the briefing. Just a quick run through the formalities, after the presentation, Gary will be taking questions from attendees. If you do have any questions to Gary, there's a slide bar at the bottom of your screen, it's just got a little speech, by the way, the question mark, if you click that, it'll come up with a box, where you can enter your questions and Gary will address them after the presentation. If you're on a smartwatch, Q&A button is at the bottom of your screen as well. Obviously, the last day of quarterly, so it's very busy down the ASX. But Gary has been very generous for his time to offer this update and take any questions. So Gary, I won't take up any more of your time, let me hand over to you.

Okay. Thanks, Alfred, and thank you. See, we've got quite a few people online. So it's -- thank you for the interest that you continue to show in Pharmaxis, and we have a busy few months ahead of us. So I think this update aims to both review some of the information that we provided in the last quarter and give an opportunity for questions around that, but then also look forward to the next 6 months in particular and what's going to be happening. So the quarter was marked really by 2 big things. I mean the first one was on our 5505 trial in myelofibrosis. Now this trial is an open label. So we put out a first of the data from that from the first 6 patients and also shared that data at the world's leading hematology conference in America, the American Society of Hematology and also with industry potential industry partners at JPMorgan in January. So I'll give you a bit of feedback on the kind of reaction we got to the data that we have, and as I said, happy to answer questions on that. The second thing that happened was that we completed recruitment in the skin scarring study in Perth, that's being run by Professor Wood. And that means that we are now on track to deliver data from that in quarter 2 this year. So that's a second exciting thing that's coming up. And then we ended the year with strengthened the Pharmaxis Board, and I'll talk a little bit about the rationale and the choice of the 2 appointees that we put on to the Board. And then look really to the future and talk about what you should be following next if you do have an interest in us as a company. Next slide, Alfred. So the interim data that came from 5505. Now this study is being run in patients who are ineligible or intolerant for the current standard of care, which is a JAK inhibitor. So as you may remember, myelofibrosis patients who have a rare kind of bone marrow cancer, they are often treated with their first course of treatment is on a JAK inhibitor. And those drugs relieve the symptoms of myelofibrosis, but don't do too much about the life expectancy for those patients. They currently have a life expectancy of around about 5 years. Now a lot of patients find that JAK inhibitor is very difficult to tolerate their side effect profile, and they've actually caused a lot of cytopenia, so drops in cell counts make them quite difficult for patients to stay on. And once the patient comes off of those drugs, they typically have between 11 and 14 months left to live. So these are patients that are going into our study. They're quite rare, which is why it's been difficult to find them. And they are patients who are in a fairly serious way by the time they come on to our drug. So with that as a context, we've enrolled 18 patients into this study, 6 of those completed the 24 weeks of treatment, so 6 months. We've had 6 patients drop out. But pleasingly, none of those dropouts have been due to adverse reactions to the drug. They've all been due to a lack of clinical response, which is the kind of thing that you'd expect to see in this patient group. A lot of them are actually progressing quite quickly at this stage and some of them transferred to become leukemia patients in the first month or so they're on drug. So there's nothing really that the drug can do. So the physician has to take them off that and use a more suitable drug for them at that point. So the endpoints that we presented last quarter and then we took to ASH were, first of all, that this was a drug that was well tolerated. And it's interesting talking to the key opinion leaders at ASH, and you came past and looked at our poster and looked at the data, we gave a further breakdown of the improvements in platelet scores and hemoglobin within the poster. And despite our interest in efficacy and what we're doing to blood cell counts, the first thing that all of them hone in on is the fact that this is a well-tolerated drug. They have got used to in myelofibrosis using drugs which are pretty toxic. And most of the drugs which are in the clinical development pipeline also cause cytopenia in patients as well. So these patients suffer because they haven't got adequate blood counts and they're dropping because of the fibrosis in their bone marrow. And at the same time, the drugs we used to treat them in quite a high percentage of patients are causing those blood cell counts to drop even further. So they really focus on this, first of all, that the drug is well tolerated. So it's kind of almost a free choice for them to add on because they know they're not going to make the patient worse. So that was the first thing. Second thing is the honing in on the fact that we were showing across the board, either patients who were stable or improving. So we had 2 out of the 6 patients showed an important improvement in symptoms, and that's measured on a symptom score that these patients have a sort of a composite score chart that they fill in. 5 of the 6 patients had either stable or improved bone marrow fibrosis of at least 1 grade. So a confirmation that the drug is having mechanistically is doing what we expected it to do and what it did in the animal models that prompted us go into the clinic in patients. Importantly, I think 5 of the 6 patients had stable or improved platelet and hemoglobin scores, and 2 of those patients more than doubled their platelet scores. And in talking to the key opinion leaders, they really focus on the importance of that, that there is a large unmet need still within myelofibrosis, and even when they look at the potential new drugs coming through, that nothing really addresses these patients in terms of their -- when they have low platelet counts, and low platelet counts are a double whammy for these patients. It not only obviously causes them ongoing problems, but it also means that they have to drop the dose of the JAK inhibitor there on very frequently. So they stop getting benefit from that as well. So if you can increase the platelet count in these patients, then that really is something which is a very attractive thing. So I think the overall feedback we got both from the clinicians that we talked to at ASH, and then at JPMorgan in January, I spoke with a number of companies who are active in the myelofibrosis market and have drugs either in the market or in development or interested in the market are that the data thus far is very encouraging. We clearly need to see more data, and we do expect more data in the first half of this year. So we expect to have a major data update before the middle of the year, which we hope will confirm what we saw in these first 6 patients and that the story continues to be one of being well tolerated, which I'm very confident about. And also that we're still seeing those signs of efficacy in this very difficult-to-treat patient group. So that's where we are with that study, really pushing hard to get the recruitment to the end and looking forward to seeing more data from this in the first -- before the middle of the year. Next slide, Alfred. And then moving on to the scarring study. Now this, again, is a similar drug to 5505, and they blocks all the lysyl oxidase inhibitors. But it's in a topical formulation, so it's applied to the skin. And we're using it in a study of 50 patients. This is a placebo-controlled study of patients who've had a scar of 10 centimeter square or more and they had to have it for at least a year. So these are patients with established scars. And the theory here is that by changing the cross-linking of the collagen and reticulin fibers in the skin, we can change the ongoing scarring process and modify the appearance and the functionality of scars even if they're already they're in there for a considerable length of time. This is the first of a number of studies planned with the group in Perth. And we've been, thus far, very encouraged, and the great milestone that they reached just before Christmas was that they fully recruited the study. So these patients are being followed for 3 months, which means that data will be out in quarter 2, the top line results. And we're working with Professor Fiona wood and her team in Perth to fine-tune the way that we're looking at the data, the analysis procedures that we undertake so that we're all aligned in terms of the data that we will produce in quarter 2. Thus far, last quarter, we did announce that the first 8 patients in this study, who were -- we know were on active drug. We put them on active to check that we were getting the lysyl oxidase inhibition in these patients as that mirrored what we saw in healthy volunteers when we applied them in an earlier study. So we know from that small subgroup that we are inhibiting the lysyl oxidase enzymes in the skin. We can measure that. We also measured changes in the structure of the skin and the amount of collagen that was in the skin biopsies as well. So all things which line up, which suggests that the drug is actually working and changing the structure of the scar. And the clinicians noted positive changes in both appearance and the pliability of the scars as well, which was encouraging. But we do now need to wait and see the results now of the other 42 patients, which were randomized equally 1:1 to placebo and active, which, as I said, we aim to get that in quarter 2. So that's an important study, again, quite a bit of commercial interest in this study. This drug is the only one to my knowledge that's in the clinic that's really dealing with this mechanism and dealing with changing the appearance of scars. And we've had a lot of interest from clinicians as well as industry in terms of the other potential indications we could go into. And then there's a lot of interest in keloid scarring as a potential commercial indication, where there's a really high unmet need, a really big clinical benefit that could be accrued from that from treating patients with more serious scars over larger parts of their body area and even indications such as Dupuytren's, which is a fibrosis of the -- in the tendon sheath in the hand, which causes a trigger finger or a finger that comes at a different angle and can't be extended. So there's lots of potential future for this and a lot of interest in what we're doing because of the mechanism we have and the novelty of this program. Next slide, Alfred. So then just to conclude on the trial front. The company currently has 5 different studies that are either ongoing or planned to start in this year. They're all in significant markets with very large commercial opportunities. 2 of them, we've already seen preliminary data, which suggests that the drug is working, and we're waiting for further data to corroborate that. And we're going to get this -- that data in the first half of this year. So this is a really exciting period when the fruits of many years of a scientific research program start delivering clinical results in patients that really will underline whether these are our strong commercial assets that the company can further develop. Next slide, Alfred. So I just wanted to wrap up this update with a mention of the Board. And you noticed if you were following us that we appointed 2 new non-executive directors to the Pharmaxis Board in the last quarter. The first of those was Dr. Simon Green; and the second was Hashan De Silva. And when the Board sat down and looked at its capabilities, and we reviewed the experience and the skill sets of the Board in the light of the untimely passing of Will Delaat last year, who had been a long-time Board member, we felt that we needed to have additional commercial acumen on the Board and also a more current connection with the capital markets and from an investor relations point of view as well to strengthen the overall roundness of the Board and its ability to look after the interest of shareholders and work with management to make sure that our programs are focused on delivering that value. And in -- obviously, Malcolm has been with us for a long time and a very established and experienced Chairman that covers a wide range of industries and across a wide range of financial -- with a strong financial background that brings -- has brought an awful lot to us and guided us through some periods in the past. Kathleen Metters really brings the early research focus to the Board, given her background in Merck. And Neil Graham comes with a very strong clinical development background. So we felt we really between the existing Board had, the sort of early stage research and clinical development cover, but it was really as we move towards commercializing our assets and looking at partnering and maximizing the value of the company, we felt that we needed these 2 further talents. And I'm delighted with both the appointment of Simon Green and Hashan De Silva. And I look forward to them joining the Board if Simon has had his first Board meeting and Hashan will be joining us for the next one. So yes, we look forward to -- for that coming forward. Next slide, Alfred. So that just brings us to the future and the news flow. So what can you expect in this quarter? We are recruiting in the liver cancer study in Rochester. That's been difficult to get underway, but they're all set up in that clinic, and they are actively screening patients to find their first patient to go in, and the myelofibrosis study, we expect to see fully recruited. In quarter 2, the -- because the 5505 myelofibrosis study is open label, we do anticipate putting out a significant data update before the middle of the year, so sometime in quarter 2. That would depend on the number of patients going through, how many of them complete the 6 months and when we feel there's enough data there to make a material announcement, but we anticipate doing that before the end of quarter 2. From the topical -- LOX topical drug, we expect to see the data from that established scar study and also to start recruiting in a further study looking at one of those other indications that I talked about. As well as that, we've got the 2 major publications that are due from key opinion leaders in other cancers with 5505, one of them is in pancreatic cancer and the other one is in myelodysplastic syndrome. Both cancers with a huge unmet need, where I think the data that they've generated using our compounds in preclinical studies is truly compelling data and they certainly moves the needle with a lot of the people that I presented it to under a confidentiality agreement. And then finally, the 4728, the study that's looking at treating patients with a serious sleep disorder and potentially preventing the onset of Parkinson's. That study will start recruiting in [ 2023 ]. As a reminder, that study is fully funded by Parkinson's U.K. So we're just going through the final stages of set up now with the finalization of the protocol and getting the centers signed up, but that will start recruiting in quarter 2. And then the second half of the year, of course, will be marked by the full data set from the myelofibrosis study and reports on both the safety and efficacy data from that, which we're very excited about. So I think that brings to an end the sort of formal part at this moment. I'm happy to take any questions.

Excellent. Thank you very much, Gary, for that informative presentation. We have had a couple of questions come in already, which we'll address in a sec. [Operator Instructions] Gary, the first question comes from [ Ret ]. What are the differences between PXS and Constellation's myelo drug? Is the $1.7 billion takeover achievable for Pharmaxis?

Yes. Interesting question. So the Constellation drug, I guess the main difference between their drug and our drug is that their drug is clinically more well advanced. So the takeover of Constellation by MorphoSys happened after they already completed a Phase IIb study, where they had data showing that if you combine their drug with a JAK inhibitor, then you see better outcomes for their patients. And they're in Phase III now. And that -- I think that the $1.7 billion, and this -- that program was their lead asset. So it's not as though they've -- the $1.7 billion is based on a huge valuation in some other drug, they've gotten another disease. It is based on that drug in myelofibrosis largely. And it seems very encouraging to see the amount of commercial value that's put on a clinical benefit being accrued by a drug in development. Now we -- I think we are at an earlier stage. So we're certainly not going to attract a $1.7 billion takeover just yet. But the study that we've got ongoing and the preliminary data we've already presented suggests that we will have a profile, which makes our drug attractive when we get to that stage. And the next -- I think when we talk to companies, when I talk to companies at JPMorgan, clearly, they can see that despite the other drugs in development, the profile of our drug is still very attractive. It fulfills an unmet need. It doesn't have some of the tolerability issues that the Constellation drug has as well as others in the pipeline and the drugs on the market at the moment. So I wouldn't say that the Constellation deal precludes us doing a deal. I think it's highlighted that, in one area, a further benefit has ascribed huge commercial value. And if we continue to produce data along the lines of the first 6 patients that we had that, that kind of opportunity would be open to us in the future as well. So I find encouragement on 2 levels there. One on the commercial value that companies are ascribing to this. And secondly, on the profile that we've got and the fit that we have with the current unmet need that's in myelofibrosis, which was endorsed by the key opinion leaders we talked to ASH around our poster.

Excellent. Thank you, Gary. A question from Chris. How should we think about the potential increase in R&D spend with the ongoing clinical trial pipeline? And what does that mean for the available cash runway?

So the cash that we have at the moment, I think it's about $21 million as a pro forma number at the end of December. That takes us well into 2024. And clearly, the next studies that we have to run in myelofibrosis or myelodysplastic syndrome or another scarring study will require us to have more money to do that. But behind us, we will have a clear set of data, which I anticipate if it's positive, we'll see to a dramatic increase in the valuation of the company and allowing us to move forward confidently to either raise money to do the further studies or to partner one of the assets in order to raise non-dilutive funding to take the company forward. So the options for the company are certainly being kept open at the moment, and we will see how the data develops in the first half of the year to decide how we want to fund the company going forward into the next.

Thanks, Gary. Kind of a follow-up question to that, another one is, what are the options when Parkinson's U.K. funding is exhausted?