Biora Therapeutics, Inc. beats earnings expectations. Reported EPS is $-1.59, expectations were $-1.75.
Operator: Welcome to the Biora Therapeutics First Quarter 2023 Financial Results Call. [Operator Instructions]. I will now turn the call over to Kristy Grabowski, Director of IR Communications with LifeSci Advisors Biora’s Investor Relations firm. Thank you. Please go ahead.
Kristy Grabowski: Thank you, operator. Good afternoon, and welcome to the Biora Therapeutics first quarter 2023 corporate update and financial results conference Call. Joining me on the call are Adi Mohanty, Chief Executive Officer; and Eric d’Esparbes, Chief Financial Officer. Before I turn the call over to Mr. Mohanty, I would like to remind you that today’s call will include forward-looking statements within the meaning of the federal securities laws, including, but not limited to, the types of statements identified as forward-looking in our quarterly report on Form 10-Q that we filed or will file later today and our subsequent reports filed with the SEC, which are available on our website in the Investors section. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control.
Please note that the actual results could differ materially from those projected in any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements as well as risks related to our business, please see the company’s periodic reports filed with the SEC. With that, I will now turn the call over to Adi Mohanty, CEO of Biora Therapeutics. Adi?
Aditya Mohanty: Thanks, Kristy. And thank you, everyone, for joining us. Since our last call 6 weeks ago, we have continued executing on development plans for our NaviCap-targeted delivery platform, completing much of the data analysis from this tox study in our BT-600 program with results that are encouraging. With our BioJet systemic delivery program, we made excellent progress with device development and began preclinical studies using an autonomous version of our next-generation biogen device. Based on the top line bioavailability results we shared in March that were more than double our target levels, we progressed rapidly to preclinical testing with one of our pharma collaborators. We’re also planning to present detailed bioavailability results from our BioJet platform at an upcoming medical conference.
Finally, we strengthened our clinical team with the addition of Dr. Ariella Kelman as Chief Medical Officer, which is good timing as we prepare to enter the clinic this year. Moving on to the program updates. First, I’ll cover our NaviCap-targeted therapeutics platform with our lead program, BT-600 in ulcerative colitis. Currently available therapeutics for ulcerative colitis, or UC, work by entering the bloodstream and being circulated systemically throughout the body with a limited amount of drug reaching the site of disease in the colon. Our solution is based on the NaviCap platform, which uses an orally ingestible device about the size of a fish oil pill that is designed to deliver drug directly to the colon using our GI track localization technology.
Our lead program, BT-600, is our proprietary liquid formulation of tofacitinib delivered via the NaviCap device. A commercially available version of tofacitinib is approved for the treatment of UC. Today, tofacitinib is administered orally and like other orally delivered drugs, it has taken up systemically with a limited amount reaching the area of disease in the colon. By delivering drug where it is needed at the site of disease, BT-600 has the potential to deliver sufficient drug to the tissue of the targeted area to improve efficacy and also reduce systemic exposure, which may improve safety. Although global sales for UC drugs are approximately $7 billion per year and growing, we know UC patients are still suffering tremendously with a large unmet need.
Photo by National Cancer Institute on Unsplash
We believe we can potentially solve one of the primary treatment gaps which is the inability to achieve high enough drug levels in the disease tissue without systemic toxicity. That’s why we’re excited about the results that we’re seeing from the toxicology study for BT-600. At the time of our last call in March, we had recently completed execution of our toxicology study for BT-600, during which we administered over 600 drug device combinations in canines. Since then, we have received a majority of the data and the results continue to look good. All planned devices were administered, and we observed no adverse events or safety signals. Of particular note, there were no safety findings on histopathology of the colon or on blood safety and chemistry tests, including liver function tests, even at the highest 25-milligram dose of tofacitinib.
With the NaviCap platform, our goal is to achieve high drug concentrations in the colon tissue, and we want to see these levels going down between doses and not accumulating. When we look at drug levels in the blood, we want to see some drug in the blood, but at low levels because it is believed that reducing systemic exposure can improve safety. In our previous 7-day canine study, we measured tissue drug levels at 6 and 12 hours after administration of the last dose and saw tissue concentrations exceeding IC90, which is what we want to see. In this tox study, we measure drug levels in tissue 24 hours after administration of the last dose and saw drug in colon tissues with levels, suggesting that the drug does not accumulate over time, which is another favorable sign of safety.
Taken in the aggregate, we believe these studies support the ability of BT-600 to deliver high concentrations of drug to colon tissue to potentially drive efficacy and then dissipate in a short enough time to support safety. In the recent toxicology study, we continue to see peak drug levels in blood at approximately 1 quarter of what would be expected with the equivalent dose of commercially available tofacitinib using traditional oral administration. This further supports our desired approach of having lower levels of systemic exposure to potentially reduce toxicity. Final analysis is still ongoing, and we anticipate receiving the audited report in the coming weeks. We’re also tracking well on progress with other aspects of the program, and we currently remain on track for our planned IND filing in Q3.
We also recently announced that Dr. Ariella Kelman has joined Biora as Chief Medical Officer, bringing valuable experience as an immunologist and strengthening our clinical team. Ariella’s medical background and broad experience with dozens of early-stage and late-stage development programs for therapeutics over her 15-plus years of Genentech will be valuable as we prepare to file our IND for BT-600 and then progress our program into later stages of development. Moving on to our BioJet systemic therapeutics platform. The BioJet platform aims to facilitate systemic oral delivery of drugs that would otherwise require injection or infusion. The BioJet platform is based on an orally ingestible device that provides liquid jet delivery to the small intestine to maximize systemic uptake.
The platform has the potential to deliver a broad range of large molecules, such as proteins, peptides and nucleic acid without complex reformulation. We believe this platform can help improve disease management and associated patient outcomes and reduce intravenous infusion costs across a range of chronic use indications. Most of all, we believe this will improve patient convenience, which has been shown to affect patient compliance. These improvements could also help injectable biotherapeutics, such as monoclonals, become more competitive with alternatives. During Q1, we announced top line results from preclinical studies with two drugs: adalimumab, a monoclonal antibody and semaglutide, a peptide and GLP1 receptor agonist. In the preclinical study with semaglutide, we achieve more than double our target bioavailability using BioJet platform.
I’m excited to share that data from this study was accepted as a late-breaking abstract at the American Diabetes Association Scientific Sessions. We think the acceptance of this abstract as a late breaker indicates the tremendous interest by the scientific community in oral delivery of GLP-1 agonist and other large molecules. We look forward to sharing detailed results from the study at the upcoming ADA meeting in June. We recently conducted a round of preclinical testing with our collaborator, Ionis Pharmaceuticals using an endoscopically activated BioJet device with an Ionis antisense oligonucleotide molecule. We’re awaiting updates on results of that study, and we’ll share more as soon as we’re able to. In the few short weeks since our last call, we’ve also conducted preclinical testing with an autonomously triggered BioJet device.
We expect testing to continue through the coming weeks, and we remain on track to generate data during Q2 that we believe are necessary to enable our other 2 pharma collaborators to initiate testing with their own molecules. We look forward to progressing these collaborations and advancing toward our goal of achieving meaningful partnerships for our BioJet platform later this year. We continue to see potential for multiple partnerships over time due to the broad applicability of the BioJet platform to different molecules. As a reminder, one aspect of our comprehensive patent position for the BioJet platform is a key patent granted last year, which covers methods for using an ingestible device to treat a condition using Jet delivery of a GLP-1 receptor agonist formulation to the small intestine to achieve systemic uptake.
This puts Biora in a very strong competitive position for providing oral delivery of GLP-1s. With the success of drugs like Ozempic and Mounjaro, we’re seeing analyst projections for the GLP-1 market being revised upward to $100 billion annually within the next 10 years. To summarize our anticipated milestones for both platforms. For our NaviCap platform, we remain committed to filing an IND for BT-600 in Q3, and we anticipate initiating our Phase I trial for the end of the year. For our BioJet platform, we’re continuing development of our autonomous BioJet device with additional preclinical data generation expected during the second quarter of 2023. We also expect to continue to test and initiate new testing of the BioJet device of the molecules of our pharma collaborators.
We also look forward to sharing results for our BioJet preclinical study with semaglutide at the American Diabetes Association Scientific Sessions on June ’23. With that, I’ll now turn the call over to Eric for a review of our financial results and capital market activities.
Eric d’Esparbes: Thanks, Adi, and good afternoon, everyone. During the first quarter, operating expenses, excluding stock-based compensation expenses, were $13.2 million, an increase of $1.6 million compared to Q4 ’22, primarily driven by higher investment in device development and preclinical activities. Breaking this down, G&A expenses in the first quarter were $8.4 million, including $1.5 million in stock-based compensation expenses, while R&D expenses in the first quarter were $7.2 million including $0.9 million in stock-based compensation expenses. While spending will continue to fluctuate from month to month as we progress towards the clinic, we maintain our guidance of an average monthly operating cash burn of approximately $4 million.
We successfully raised $12.9 million in gross proceeds from our ATM program during the first quarter, effectively funding our Q1 operating expenses leading to a stable cash balance of $30.5 million as of March 31, 2023. We also continue to make progress with monetizing remaining legacy assets, which might add incremental funding in the near future. Finally, we continue to work actively on optimizing our capital structure to maintain and enhance our public company profile, and we expect to have some updates before our next call. With that, I will now turn the call back over to Adi.
Aditya Mohanty: Thanks, Eric. Biora continues to make strides with both our NaviCap-targeted oral delivery platform, where we’re focused on entering the clinic with our BT-600 program; and our BioJet systemic oral delivery platform, where we’re focused on completing our next-gen device and progressing with pharma collaborators. We look forward to providing further updates as we achieve our milestones. With that, operator, we’re now ready for questions.
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Q&A Session
Operator: [Operator Instructions]. The first question is from Mayank Mamtani of B. Riley Securities.
Operator: The next question is from Joe Pantginis of HC Wainwright.
Operator: At this moment, there are no further questions. I would like to turn the floor back over to Adi Mohanty for closing comments.
Aditya Mohanty: Thank you all once again for joining us for our Q1 2023 financial results call. We’re really happy with the progress we’re making and look forward to keeping everyone updated as things progress. Thank you.
Operator: Ladies and gentlemen, that concludes this conference. Thank you for joining us. You may now disconnect your lines.