BioVie Inc. (BIVI) Earnings Call Transcript

Hello. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with BioVie, which trades on the NASDAQ under the ticker BIVI. With us today is Cuong Do. President and CEO of BioVie. We will begin with a brief presentation in a moment and then we will answer your questions. Welcome to everyone joining us today on X, YouTube, LinkedIn and other social media platforms. To submit your question, we invite you to join us on Zoom. Use the link provided. Once in Zoom, click the Q&A button at the bottom of your window and type your question into the text box. Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Cuong, please go right ahead.

Good morning, everyone. Thank you for joining today. My name is Cuong Do. I'm the President and CEO of the company. Give me 1 minute to get my screen share up and running again. Our company has 2 assets. Bezisterim is a novel modulator of inflammation, and BIV201, which potentially has the potential to become the first drug to treat ascites, which is a terrible end-stage liver condition, right? We've had a very exciting August and September. About 45 days ago, we reported out on our Parkinson's Phase II trial. And just within the last week or 2, we've reported out on our Long COVID trial. So we will spend today mostly on these 2 clinical trial results. As we look forward to the remainder of this year, we have a lot more data to analyze from the trial. So we will provide additional clinical updates, and excitingly, we plan to meet with the FDA, end of Phase II meeting for Parkinson's and hopefully get -- and we expect to get formal feedback from the FDA on our Parkinson's Phase III designed by the end of the year, perhaps even by Thanksgiving time. We believe that inflammation is a starting point for a lot of things that go wrong in the body, particularly starting with TNF alpha. And when you have the production of TNF alpha, which is considered to be the master regulator of inflammation, it leads to a lot of the bad things that you see on this page, right? And that's where our drug candidate bezisterim comes in. Bezisterim is a small molecule that's orally bioavailable. So patients take 2 capsules a day, 1 in the morning and 1 at night. It really crosses the blood-brain barrier, so it gets into the CNS. And it's believed to block the activation of ERK and NF-kappa B. And by blocking ERK and NF-kappa B, you block the production of TNF alpha, right? So essentially, when you have TNF alpha, it leads to a forward-feeding proinflammatory cycle, so it just creates more inflammation. When you have TNF alpha, it activates something called IKK and JNK. IKK and JNK binds to the insulin receptor substrate 1 and 2 and blocks insulin's ability to bind to that same IRS 1/2, thereby causing insulin resistance. So by blocking ERK and NF-kappa B with the production of TNF alpha, we reduce inflammation and we've reversed insulin resistance. That's how bezisterim is believed to work. And you can see the impact of that. First, it Long COVID. This is a trial that we reported out on just the last couple of weeks. Long COVID affects a large population. There are up to 20 million adults in the U.S. that are affected with long COVID. Nearly 4 million have it so badly that they are considered to be disabled. They can no longer keep up the physical demands of the jobs because they're suffering from brain fog, fatigue and post exertional malaise. And research has tied these conditions to inflammation that works through exactly the same mechanisms where bezisterim affects. And that's the reason why we believe bezisterim has the potential to become the first therapy for Long COVID because there is absolutely nothing that's available now. All the trials in Long COVID has failed. And first, it's important to recognize that long COVID is not the same as Long COVID. It is the infection caused by the virus. Many of us have had it. Many of us have been able to warded off and life just resumes life goes on. But unfortunately, for the 20 million Americans who have Long COVID, they continue to suffer from these different conditions, right? And it lingers for years after the initial infection. And we believe that bezisterim may have an impact on those conditions. So we conducted the ADDRESS-LC Phase II trial. It is a signal finding trial that's designed to essentially identify which endpoint could show that bezisterim could work to measure how big of an impact bezisterim could afford patients that are on drug and to identify the patients that can benefit from this drug, right, all of this is needed so that we can design the Phase III trial. The Phase III trial was really the critical trial where you have to have a single endpoint or a few endpoints and all you're looking for is statistical significance. Does it work or does it not work? With statistical significant. That is a Phase III trial that we now plant. This Phase II trial gives us the information to do so, the planning. And in this Phase II trial, we evaluated 22 different clinical outcomes. We collect blood samples, and we did all of this with the support with a $13 million grant from the Department of Defense now the Department of War. We have always known that Long COVID is a very complicated heterogeneous situation -- condition. So at baseline, we had 203 patients enrolling in the trial. We have always known that patients that have high inflammation or high symptom burden are the ones that are most likely to respond most quickly and most profoundly. So we always prespecify certain subgroup populations with the FDA before we unblind the study, and we did exactly that here. And one of those ways of specifying subgroups is based upon disease severity, right? And which disease symptoms. So here, what you find is in the trial, we had 112 patients with high fatigue, we have 98 with brain fog and 70 with postexertional malaise. And we always talk of Long COVID in those essentially involving dose 3 symptoms. But interestingly, you see that only 15% of the patients have all 3 symptoms with high severity, right? But yet another 35% have some combination of 2 symptoms and another 35% have some combination of just 1 symptom. But the important thing to recognize here is that if you do not have a symptom, it's not possible for you to improve on it. So here, you see 112 patients with high fatigue. That means all of these patients that are red and in green do not have fatigue and therefore, they have no room to improve. That's a critical thing to keep in mind as we go through the data. Because here, as you look at what happens on the results for all 203, you see that 21 out of the 22 endpoint, treatment, you see a favorable treatment effect, right? So it's to the right. The [indiscernible] is positive, meaning that the treatment effect favors bezisterim. But interestingly, none of these endpoints reach statistical significance of p=0.05 or less. And that has to do, we believe, with what we talked about here. Only if you have fatigue, right, so if you look at this fatigue, only this 112 patients can really improve on it, which means that the improvement for these patients, the red and green is 0. And so while you see some impact, some effect favoring bezisterim treatment, you do not get statistical significance. You have because so many of those patients, those that do not have high fatigue do not show improvement. And that's the reason why we prespecify in our submissions to the FDA that we will look at different subgroups based upon the symptoms they have and severity. And by doing so, you see a remarkable outcome. So if you look at patients who have high fatigue, the impact doubles, right? The [indiscernible] doubles. And you see that patients have statistically significant improvement on fatigue and other measures, right? So you see the p values here are less than 0.5 for 5 measures, and you get trending improvements by Method 3. So you need to have fatigue to be able to improve on fatigue with statistical significance. Similarly, if you look at patients who have high post-exertional malaise at the start of the trial, those patients improve on post-exertion malaise, DSQ-PEM, right, with statistical significance. But these patients also improve under cognitive impairment of their brain fog. And this actually is very easy to imagine and to see. Sometimes when I and I'm sure many of us on this call, if we wake up early in the morning, if it's too early or whatever it is, we could be foggy, and so forth. So we're just not thinking clearly, right? So fatigue directly affect our ability to think clearly. But for these patients who suffer from high post-exertional malaise, those patients are suffering from it all the time. And so here, by bezisterim' ability to help patients improve under fatigue, not surprisingly, they're improving on brain fog as well. And like similarly, if you have high brain fog, you improve on brain fog. So this shows that bezisterim has the ability to help patients improve on all 3 of these symptoms of fatigue, malaise and brain fog, but you need to have the symptom to begin with in order to improve, right? And this is the reason why our experts and all of the experts in the field are so excited about this because there's been dozens of trials that have all failed to demonstrate impact on any endpoint, whereas here bezisterim, this is the first trial that has been able to show that have an impact not on 1 but on all 3 often neural symptoms [indiscernible] Long COVID. This is the reason why all 12 of our PIs and our advisers, all 12 out of 12 that we have spoken to so far [indiscernible] strongly recommend that we move quickly to Phase III because this is the first thing that has worked for these patients in the community. And remarkably, consistent bezisterim continues to show that it's a very safe drive. There is 0 serious events and so forth. And the safety profile is incredible because in this population, virtually everybody is taking 1 or more other kinds of medications. So the last thing you want is to add to this mix a drug that potentially could have drug-drug interaction that lead to other problems. And we just did not see any of that in this trial. So this gives us great excitement that bezisterim could become the first therapy for Long COVID, and we're still waiting for some additional biomarker data to come back from the labs in the next 45 days or so. We will analyze that and give additional readouts at that time. And based on when we have the totality of the data, we will then ask for a meeting with the FDA -- an end of Phase II meeting with the FDA later on this year to go and discuss our plans for Phase III for Long COVID. So with that, let me -- excuse me, 1 second. With that, I'd like to move on to Parkinson's. Parkinson's is known as a progressive neurodegenerative disorder that leads to problems with both motor and nonmotor symptoms, right? And there are no disease-modifying therapy out there. So there's a great unmet need for a new medication that can address motor and nonmotor symptoms and hopefully modify the progression of the disease. And when we talk about nonmotor symptoms, I'd ask you to focus on the green part at the bottom of this chart that we found in a great article. So we just shamelessly copied and pasted it here. When we talk about nonmotor symptoms, worth talking about sleep disorders, depression, cognitive impairment, lots of GI problems and constipation. And these symptoms often show up for years before a patient is actually diagnosed with the motor symptoms. And when you have the motor symptoms diagnosed, sooner or later, you will go on to a drug called [indiscernible] or a similar drug right, to help address the motor symptoms, to help you improve your muscle control, but those drugs eventually lead to other complications. And as you can see over time, the progression of the disease only heads in 1 direction, it's only headed up. What we believe is there is the need and the potential to change that. To conceptually display what we mean is if you look at the dash line, this is directly what happens to a patient's symptoms if it goes untreated. It just continues to get worse over time. But as you go into levodopa to address the motor symptoms, you're addressing the motor symptoms, so you're shifting that curve down. But since nothing has been done to address the underlying progression of the disease, it continues to progress at the same pace, but at just at lower level. And what we believe is needed is for a therapy that bends that curve that changes the slope of that curve. And we believe that bezisterim has the potential to do so. That's why we conducted the SUNRISE-PD trial, where we looked at 4 different things. We looked at inflammation, biomarkers inflammation because that's how we convince bezisterim works. We conducted a [indiscernible] study looking at different plasma proteins of inflammation and CNS disease. We lift a lot of the neuronal injury, and we looked a lot at clinical outcomes. And in our entire trial of 57 patients, what we see is that patients treated with bezisterim do not worsen as quickly as patients that are treated with placebo. And the way to read this chart is that a positive -- the bigger positive number is greater progression. So you see that those that are treated with bezisterim, shown in blue, do not worsen as quickly as those that are treated with placebo. But we do not see statistical significance at this gross level of 57 patients in the whole population. But again, we know that patients who have inflammation or have higher disease burdens are the ones that will respond most quickly and most profoundly. And that's why we prespecified with the FDA before we unblinded the data that we -- unblinded the data. So what we found is that patients who have high inflammation, as shown by high-level baseline levels of platelets. You see that those treated with bezisterim not only slowed the progression, we saw a reversal, an improvement of something called the unified Parkinson's disease rating scale that comes in 3 parts. Part 1 is the nonmotor, Part 2 is the activities that data living skills and Part 3 is motor symptoms. Part 3 is what is the endpoint that the FDA has used historically to approve Parkinson's drugs. They also use the total score, right? And so here, either Part 3 or total, would you see that we win statistically, right? So we have statistical significance showing that bezisterim-treated patients improved on treatment. But you also see that we win on Part 1, which is the nonmotor endpoints as well as the activities of daily living. So this is the reason why we believe that bezisterim has the potential to become the first drug to address both the motor and the nonmotor symptoms of the disease. And of course, you may note that the nonmotor symptoms are considered to be the biggest unmet medical theme in the Parkinson's population at this point. We also created something called the EPNIC-15, which puts together motor, non-motor and all of [indiscernible] endpoints into a single EPNIC-15. Let me focus your attention to the left chart. And here, on the EPNIC-15, an improvement is a smaller number, a negative number. And here you see, if you focus on the left side of this chart, you see that the majority of the patients that improved are those that are treated in with bezisterim, as shown in blue, and those that are stable, that did not change our those, majority are treated with bezisterim. The fact that you did not improve or did not worsen is a win in our part in our mind because we believe that we prevented these patients from worsening. Conversely, if you look on the right-hand side, most of the patients that worsened were on placebo, right? So you see very, very big statistical significance here when you look at this metric. Another way of looking at the data is you see that 25% of the patients treated with bezisterim meaningfully improved compared to just 4% of those who were treated with placebo. Now conversely, only 14% of those treat of bezisterim meaningfully worsened compared to 46%. So when we look at the totality of this data, we conclude that bezisterim treatment help patients meaningfully and statistically, significantly improved on both their motor and nonmotor symptoms, thereby positioning bezisterim to potentially become the first drug to address both motor and nonmotor symptoms in Parkinson's. Let me move on to look at biomarkers. We looked at 380 different biomarkers in what's called a proteonomic study. In that battery, there were 7 Parkinson's-specific biomarkers and all 7 moved in a beneficial manner. So that's statistically significant. There were 36 biomarkers of neuronal injury. Over 90% of those biomarkers moved in a beneficial direction. So highly, highly statistically significant. There were over 150 different biomarkers of inflammation. Over 75% of those moved in a beneficial manner. So highly, highly statistically significant right? We also dived more deeply in neurodegeneration. I'm particularly interested in looking at something called neurofilament or NfL, and the other is GFAP. NfL and GFAP are well recognized biomarkers of neuronal degeneration. So the longer do you have the neurodegenerative disease, the more that these these biomarkers continue to get -- to increase, right? They get released into your blood, higher and higher levels the longer you have in neural degenerative disease. But in this trial, you can see that those patients that were treated with bezisterim saw a significant decline of their biomarkers, particularly NfL. And the reason I'm interested in NfL is that this is the blocker that's been used as the primary endpoint to get 2 drugs approved, 1 for ALS and the other's for MS, right? And you see a statistically significant reduction in -- with bezisterim treatment. In dark blue here, dark thick blue, we give the composite of all of these different biomarkers and we replotted on the right-hand side. On the right-hand side, we also give the placebo composite and you see that they just moved in a completely different direction. So highly statistically significant, right? So we look at this and we can conclude that bezisterim has the potential when looked in a much longer study as we will -- as we plan to do in a Phase III study, bezisterim has the potential to be become the first drug to slow the progression of the disease, right? And if you're slowing the progression and here's the signs of it, you're slowing the increase of these neurodegenerative biomarkers. And so we have asked for a meeting with the FDA, an end of Phase II meeting with the FDA to discuss our Phase III trial design, right? We have good ideas of of what needs to be done. We've worked on this with our advisers. And we don't believe that we will have any trouble with the FDA on this trial design. So we expect to get formal feedback from the FDA by the end of the year. And if so, we're funding, we believe we can start the Phase III trial by the middle of next year or so. Right. I see that in the interest of time, let me stop it there, and let's open it up for questions.

Thank you very much, Cuong. To submit your question, we invite you first to join us on Zoom, use the link provided once in Zoom, click the Q&A button at the bottom of your window and type your question into the text box. Because of the great number of participants today, we can take your written questions only, and we have many of them already. With so much good news on the results, why is the stock getting crushed? When do you expect to put in for the Stage III trials? Well, let's work with that. The first one, please.

I wish I can give you a great answer, right? Unfortunately, what we are experiencing is what other biotech companies are experiencing as well, where people sell and fund the news. And unfortunately, the shorts really had to do it for us, right? Some short sellers made a lot of money by essentially driving our shares down. And they were able to do that because everybody was expecting us to go and raise some capital on the back of the good news. And so basically, they sell some of this, we believe, are just nicked shorts and so forth, which is highly illegal, but there's nothing we can do about it. Just to kind of give you some context. We have about 8 million shares outstanding in the total float. On the day that we announced our Parkinson's result, which are really good results, over 120 million shares were traded that day, right? So it was just like every single share was trade at 15x over, right, which was absolutely crazy. And that ultimately drove our share price down. And because of that, we decided not to do of the race, right? And when we decided not to do the raise, our shares spiked up because of the short coverage diversity classic short squeeze because people had to cover their short positions, right? And it's been lingering in the 2-ish for some time, $2 pressure for some time. I believe that is woefully undervalues our company, right? And I think over time, as people truly understand the results and perhaps as we get formal feedback, from the FDA, I believe our shares will rally, right? And I say that not only because I'm the CEO of the company. I'm also on the [indiscernible] shareholders in the company that's buying shares, right, in the company, right? For the first time in very long time, the lawyers cleared me to buy shares because I no longer have material nonpublic information. So when that became possible, I and other members of our management team bought more shares.

Thank you, Cuong. Where does BioVie stand on their liver drug at the present time? It was announced in January that I think Equity was going to bring it public under the symbol OPTN?

Right now, the liver drug that the BIV201 is on hold. We have agreement with the FDA and what's needed to perceive to Phase III to get the drug registered, but we need to raise about $25 million in funding for it. And that's why we were planning to take -- put all of the Ascites assets into a new company called Option Therapeutics and go and raise funding for option through an IPO. And market conditions just hasn't allowed us to do that, right? So we're just waiting for market conditions to improve. And the first opportunity, we will proceed down that path.

Given BioVie's current cash position and the recently established ATM, does management believe it has sufficient liquidity to reach the next major regulatory or clinical value inflection points without issuing a substantial amount of equity at approximately today's valuation? And is management's objective to use the ATM primarily as a bridge rather than as the principal source of financing for the next stage of development?

That's a great question. Thank you for that. I've refused to do a raise given our current depressed share price. That would be too dilutive to existing shareholders. And I just don't think that is the appropriate way to go. And I'm not going to use the ATM as the primary mechanism to raise additional funding partly because we're in baby shelf labs. So the -- we're somewhat limited on how much we can raise with the ATM anyway right? So the ATM is there of just good corporate practice. Whenever there's an opportunity to opportunistically raise some cash, we'll do so, right? But we are not doing it in a manner to drive -- that will lead to our share price being depressed. We will have to raise capital at some point in time in the future to fund the trials. But then I've received the feedback from some potential investor who says, they would feel much more confident in the shares of the company if and when they get formal feedback from the FDA about the Phase III design. And we -- and that's why we are so focused on the end of Phase II meeting with the FDA to get formal feedback on the Phase III design. And we believe that will create a catalyst for our shares to rally. And when the shares rally, under the right conditions, we would consider raising the capital then.

With these great results, how close are we to partnering with a large drug company?

We are just now preparing to restart those particular conversations. Pharma companies always want to have the data and frankly, do you want somebody else to go and pay to do the next trial rather than do it themselves, right? So creating the right competitive environment so that a company is forced into taking action is ultimately how you get partnering conversations to really work in our favor. And so we're taking our time to do it the right way. So that takes months, not weeks, right? And so we're initiating the process to have the right conversations with the companies that we've had conversations in the past.

With regard to SUNRISE-PD, are you asking the FDA to consider that one successful adequate and well-controlled Phase III trial, together with SUNRISE-PD Phase II data and the mechanistic biomarker clinical evidence already accumulated provides sufficient efficacy evidence for an NDA?

We do not believe that one Phase III trial was suffice. It will be nice to have that. And then of course, that was always going to be part of our conversation with the FDA, but we're planning on conducting 2 Phase III trials, right? And we have good ideas on what that Phase III trial would be. There will be about 160 patients each. We would conduct 1 in the U.S. another 1 ex U.S., so that we can get global registration for bezisterim in Parkinson's.

In presenting ADDRESS-LC data initially, you mentioned the possibility of breakthrough therapy, fast tracked or other expedited designations within the FDA. Is this still the case?