Nyrada Inc. (NYR) Earnings Call Transcript

Good morning again to everyone or good evening or good afternoon, wherever you may be in the world. My name is Dimitri and welcome to this Nyrada 3 Quarter financial year 2024 Investor Update. On this call, you may see in front of you our Chairman, John Moore, who has joined us from New York, it's evening in New York; and James Bonnar, our Chief Executive Officer. Following our February 28 stroke study announcement, Nyrada has welcomed many new shareholders, so an important objective for today is to introduce, reintroduce the company and our brain injury program and to give participants the opportunity to ask questions. The full slide deck for today has already been released to the market this morning, so you can download it and review it at your convenience. We're not going to go through all the slides in the deck, but it's available for you to review. I will hand over to John and James shortly, but first, some quick housekeeping. Please note that although not yet, it will be -- this call will not be recorded. My apologies, it will be recorded. And -- the format for today will be a welcome and introduction from John and the presentation from James. We will then open for Q&A. If you would like to ask a question, please indicate in the chat with your name and your question, and I will read it out at the appropriate time. Given John's and James other commitments, we will have to have a hard close at 9:55 a.m. or 55 wherever you are. But if you have any other questions, please e-mail me. I will post my e-mail address in the chat for you to contact me. I would also invite shareholders and stakeholders to subscribe for our market announcements and news alert, you can subscribe on our website. I will also post the link in the chat. Finally, we are having an important Extraordinary General Meeting on Monday -- excuse me, on 16 May at 9:00 a.m. This will be an in-person meeting. No matter your voting intentions, we urge you to please vote and to lodge your proxy. I will post the link to the Notice of Meeting and the Automic who are our registry provider, voting system into the chat also. So -- without further ado, off we go over to John Moore, our Chairman. Here you go, John.

Thank you, and welcome, everyone, to the Nyrada investor. And I'm happy to welcome you all, and I'd like to tell you a little bit about Nyrada. So, Dimitri, if you can go to the next slide. One of the nice things about Nyrada is it combines a Board of Directors and a scientific advisory board, which is used to playing on a very large global stage and it with -- had a history of success in biopharmaceutical development. But we combine the great parts of the fertile soil of the Australian biotech industry, which includes a terrific regulatory regime, which allows early-stage drugs to do Phase I trials without FDA IND approvals. Second of all, a great tax regulatory regime, which it allows very efficient use of capital to do those early-stage animal studies in Phase I trials. And we also have U.S. capital markets expertise with a number of us being from U.S. publicly traded companies. So we know how to make the migration when the time is right to be able to get the company to play on a global stage. So if we go on to the next slide, I'll talk a little bit more about the Board of Directors, which is -- I'm a big believer that a great Board of Directors is a tribute to the power of the ideas of a small company like Nyrada, which has so much promise. So I'll start in the lower right corner, which is I'll start with Chris Cox, who's one of our directors. He was the Chief Commercial Officer of the Medicines Company and which was sold for $9.7 billion to Novartis. And Chris is currently partnered with Ian Read, who is the former CEO of Pfizer in a company called Population Health. And what really attracted Chris to join the Board of Nyrada was I've worked with them for the last 10 years, but he also saw a pattern where the success of the Medicines Company was they had partnered with the British National Health Service to do their clinical trials. And when he understood that we have a partnership with the U.S. Army Walter Reed Medical Center, which is the largest potential customer for our products. He said, "Hey, look, that seems like a winning combination to me." And he really believes in this company. Dr. Rudy Lisa, who is employed at Merck KG, the German Merck, and he's done over 50 business development deals. So eventually, when the time is right for us to license our products or partner, we have a world-class global expert in business development deals and terms. Marcus Frampton is the Chief Investment Officer of the Alaska Permanent Fund, which manages $88 billion. And Marcus really has a reputation as a terrific biotech investor. His involvement is -- this is -- he has invested with the zone personal funds. But among the many companies that Marcus has helped create one is Juno Therapeutics is named after a town Alaska. They've invested $250 million in it, and it was sold to Celgene and then eventually to Bristol-Myers Squibb for $9 billion. So Marcus, his involvement is terrific for a point of view of other institutional investors and as we scale the company up access to the capital markets. Dr. Gisela Mautner is a PhD MD. She is the CEO of Noxipharm and a very experienced he previously was with Amgen and has worked on large-scale global projects like we intend to do as well. Dr. Ian Dixon is a successful Australian based business man, and myself, I've been in the financing biotech start-ups for the last 20 years. So I've had some interesting successes that contribute and can support James' great efforts. So with that, I'll hand the call over to James Bonnar, our CEO.

Thanks, John, and I'd just like to extend a warm welcome to our shareholders, and thank you for joining this call this morning. And in particular, to new shareholders, who just joined the journey fairly recently. So I hope you'll get something out of this call in terms of some more background on the company and where we're going. So by way of introduction, I've been working in biotech since the late '90s. So over 25 years now. My most recent role was on a drug development project with Neuren Pharmaceuticals. There was the development of the debut rett syndrome drug. And it was during that program that really sparked an interest for me in neurology research. And that is one of the key reasons behind me joining Nyrada, when I heard about the work that was being done by Professor Gary Howsley and his team at UNSW and the potential to work on another brain injury program. So just before I sort of start, I just wanted to make a few general comments about the biotech sector in general. The last couple of years have been fairly tough for biotech -- and those who follow the sector will know that sentiment has been fairly poor. There have been lots of layoffs supported programs. dealmaking has activity sort of dried up. But we think that there are -- despite not being economists, there are signs of a turnaround, and we're starting to see some activity in improvement in sentiment. I think one thing I would say is that the companies that have got through the challenges of the last couple of years and come out of it well, companies who are focused on running efficient operations and smart -- using smart allocation of capital. So that brings me to Nyrada and where we are. And I think we're in a fairly fortunate position. First off, I think we're operating in a region that has been shielded to a large degree from some of the headwinds that other companies have faced around the globe. Australia is a very good place to do early stage research and clinical research. And I think if you look at the things that we can control, we've done a fairly good job of that. We're focused on what we believe are two high-value programs. And we've tried to build into our thinking and our strategy, optionality and contingency and balancing the risk of having a backup program should something go wrong and balancing that against spreading ourselves too thinly. So we're going to talk mainly about the brain injury program today. And that follows on from results we announced at the end of February, very positive results. So we'll talk about that. I think the other thing I'd say about Nyrada, and it's helped us weather the storm is that we're a very efficient lean operation. We have very low overhead costs. We maintain a small team of 5.5 FTEs, and we operate like a virtual company. So the operation is adaptable and nimble and easily scalable. I think we'll move on from the Dimitri and maybe talk about the financials.

Sure, sure. So the way we'll run this presentation today is rather than -- James go through a slide deck, we'll pose a couple of questions to James and we'll give them free runs to speak and then investors can ask anything at the end should there be a gap.

So the first question to James is Nyrada has just released its 3 quarterly numbers. What are the highlights?

Sure. Let me just bring up the slide for that. So following on from what I've just been talking about, I think Nyrada is in a good position in terms of its cash situation. In the latest quarterly, we announced $5.6 million in cash -- and that follows a successful fully subscribed placement that was conducted during March. We raised $1.7 million -- and there's a further $200,000 to come in following shareholder approval at the AGM that Dimitri mentioned. We've also received a fairly substantial cash injection in the form of an R&D tax rebate that came in at the end of last year. We're expecting another one to come in at the end of this year. It's difficult to predict the quantum of that rebate, but it's based on 42.5% of R&D spend. And in the last year, we spent about $6.1 million. So as I said, it will depend on how much we spend on R&D in this current financial year. So overall, I think the cash position is healthy, and we're in a good position to take the brain injury drug forward into a Phase I study, which we're going to be running in the second half of the year.

Do you want to change the slide? Okay. The next question. Next question is what are Nyrada's the key development programs.

Sure. I mentioned we had two higher-value programs. I'll just talk briefly about the cholesterol lowering drug program. We announced in the second half of last year, calendar year. Unfortunately, disappointing results from a toxicology study with our PCSK9 inhibitor. We were hugely disappointed with that result because we really felt that, that drug had huge potential. We still believe that a small molecule PCSK9 inhibitor is the optimal treatment for lowering cholesterol, and we're still working on that program doing low-cost background work, fairly much sort of a paper research exercise. But the key focus of the company currently is the brain injury drug, NYR-BI03. And that was the drug that we recently released results from. Now both the programs we're pursuing, it's based around Australian developed innovation and technology. The brain injury drug was developed in conjunction with the University of New South Wales here in Sydney. And Gary -- Professor Gary Housley, who is the Principal Scientist and Chair of our Scientific Advisory Board. Now what's exciting about NYR-BI03, and I'll come to the data shortly is that, this is a novel molecule. It's never been made or tested before. And we believe it's got the potential to be a first-in-class treatment for brain injury. And when I talk about brain injury, I'd just like to say that the pathology in brain injury in terms of stroke and traumatic brain injury, if you think of blows to the head and falls, motor vehicle accidents, et cetera, is common. So the exciting -- one of the exciting aspects of this molecule is that it has the potential not only to be used in stroke, which we've now got a good efficacy data for, but also to be used in traumatic brain injury and potentially other neurological indications as well. When I say first-in-class, currently, there are no FDA approved drugs to treat secondary brain injury, the indication we're going after. And yes, it's an exciting prospect because we believe we're the only company in the world that's developing a drug that acts on this particular target, which I'll talk about shortly.

Okay, James. Nyrada recently released the results of its stroke study -- a brain injury program stroke study. Can you tell us about that study plan?

Sure. So the study that we've just completed and reported on, it was in a model of stroke in a mouse model of stroke. And just as an aside, this model was actually developed by Professor Junichi Navicure, who is also on our Scientific Advisory Board. And this mouse model of stroke is considered one of the two sort of gold standard models that are used to test potential stroke drugs. And in the study that we just completed, we were able to show that we achieved a 42% neuro protection with the drug versus animals that received vehicle or placebo, if you like. So that was a very strong signal. It exceeded our expectations. One of the key features of this study was that we used a technique for imaging in the brains in these mice using a small animal MRI instrument that the USW have is specifically designed for imaginable brains. And it was using a technique that we developed in conjunction with the Walter Reed Army Institute of Research in the U.S. This is the DoD department that looks specifically at traumatic brain injury research. So we're able to use the findings from that pilot study and apply that technique to imaging the brains of these mice in the study. So it's really cutting-edge stuff. In addition to showing that the drug is efficacious in reducing injury size, we also looked at a biomarker, which is a marker of injury to axons in the brain. Now axons, if you think about the neuron being the computer, the axons is like the data cable that transmits the data around the body. And NFL is a biomarker for injury to those axons. And we've got good corroborating data in this biomarker where we achieved a 41% reduction in this injury biomarker level. So these mice in the study, they were treated for 72 hours by intravenous infusion. And that's the way we intend to administer the drug in the clinic, and I'll come back to that in a little bit. But one of the other outcomes of the study was in addition to showing strong efficacy. We also showed or demonstrated good tolerability. So that bodes well for the safety studies that we're currently undertaking. So I mentioned briefly secondary brain injury, and this is what the drug is being developed to address. And -- if you look at this slide here, you can see on the right-hand panel, a representation. In fact, this is an actual scan of a rat brain showing what secondary brain injury looks like. So if you look at the top image there, you'll see after 30 minutes, you get this what's called the primary injury. This is a penetrating injury, and this work was done at Walter Reed. And this mimics what would occur from, say, a bullet wound or shrapnel wound. You can see the brown area that represents the primary injury. And if you look at the image below that, you'll see that after 72 hours, that injury has expanded out significantly. And that's the phenomenon called secondary brain injury. And that's in essence what this drug is developed to address or reduce. And if we plot it on a graph, you can see there on the left-hand side, you've got the primary injury in blue, you've got the secondary injury in green. And if you reduce that secondary injury, the aim is to reduce the risk of mortality and also the -- limit the level of disability and improved recovery time, et cetera. Now I'm going to spend probably less than a minute on some cell biology here because I know that puts a lot of people to sleep. But this essentially is how the drug works. The drug blocks a family of ion channels called trypsin channels. And what you can say presented here, if you look at the gray dots that represents the surface of a neuron or a brain cell. And what happens following a brain injury, could be a stroke or it could be a traumatic brain injury is that you get a massive release of a neurotransmitter glutamate, and that glutamate, which is shown here as the pink trapezoid, it binds to its receptor, and that causes a chain of events that leads to a condition called cytotoxicity. Now these ion channels, these trypsin ion channels that our drug is -- has been developed to block, they open and let an ion called calcium into the cell. And that is fine under normal circumstances, but following a brain injury, where you've got such a release -- a high release of glutamate, it causes excessive calcium to enter the cell. These channels, which are shown here is the vertical bars, they basically open up and let all that calcium in, and that calcium builds up to toxic levels and it kills the brain cell. So that's essentially. What we're trying to address here. We're trying to keep those ion channels in the closed position to block that calcium entry. So that calcium dysregulation leads to neuronal cell death. And there's also evidence to suggest and this is yet to be shown that it can also lead to neuro inflammation through its action on other cell types in the brain as well. But that's the end of the cell biology. So why do we think this is going to work? And well, we've shown it works. But the genesis of the program really started out in the late 2010s with the key paper that was published -- and in this study that's presented here, there was a study done in what's called a genetic knockout mouse. So these are mice that don't have these trypsin channels that you saw on the last slide. And the study was, again, a stroke study. It was slightly different, but again, it was in mice. And you can see if you look at the brain slices and the left panels there, that -- when those channels are knocked out and the animals have given a stroke, they're protected. So the WT stands for wild type. They're normal standard mice. And you can see that the area of injury, which is shown as the white area, that's dead brain tissue is much larger. And that's been quantified in the graph there in the middle. And so with these knockout mice, you actually get neuro protection and you get about a 50% improvement, as you can see by this bar graph over wild-type mice. So the scale on the left there is injury volume. There's also some additional data that we haven't presented here, which shows that these mice also performed better when they underwent neurological assessment. So there's a score called a neurological disability score. And the trypsin knockout mice performed much better. So this was really what got us started on this program, and the objective all along has been to mimic what happens in a genetically knock out mouse with the drug. I'm just flashing up here the results of the study again. So the 42% reduction is fairly close to what can be achieved when you completely knock those channels out. So that's what's got us really excited, plus also the corroborating data with the injury biomarker. Now there is some further work that we're doing as part of the same study. We are currently imaging the brains of these same mice for other injury biomarkers. It's a process called immunohistochemistry. It's exploratory, and we're not sure what we're going to find, but we're currently doing that work at UNSW, and they will provide us with some more information about the mechanism and corroborate the data we've got here. So we'll be announcing the findings of that work once it's completed.

Okay. James, what is the market opportunity for NYR-BI03?

So I mentioned that we're going after 2 indications. We've got efficacy data in a clinically relevant stroke model. We've also got some work that we're doing with the Walter Reed Army Institute of Research, where they'll be looking for an efficacy signal with the drug in a penetrating brain injury model, traumatic brain injury model. So one of the attractions with this program or what's getting us excited is that it has a potential to move into two indications. Now the first of those is stroke. And stroke presents a huge market opportunity, about 15 million people suffer a stroke annually each year. In Australia, about 100 strokes occur each day. And the treatment options for patients who sustain a stroke are fairly limited. One of the frontline treatment is a class of drug called the TPA or tissue plasminogen activated drugs. And these effectively dissolve the clot following an ischemic brain injury or stroke. Unfortunately, however, there's a very narrow time window that these drugs have to be administered within and it's about 4.5 hours. And so consequently, only about 15% of patients received this treatment. So the other 85% miss out, unfortunately. Just to sort of put into perspective, the market for the current drugs that are available for stroke. The TPA drugs, the per treatment cost is between USD 7,000 and USD 10,000 per treatment. And the TPA market, drug market last year was worth about USD 2.5 billion. So given the relatively small number of patients are treated, it's a sizable market. Now just one thing about the drug we're developing. We don't anticipate that there's going to be this golden treatment window. We believe that as long as the drug is administered within the time that secondary brain injury occurs, which is around 72 hours, patients will see some benefit. The problem with the TPA drugs is that if they are given outside that 4.5 hour window, they can cause what's called reperfusion injury, which can be dangerous in itself. So plenty of potential in the stroke market. The traumatic brain injury market is an interesting one because there are currently no drugs approved to treat traumatic brain injury. So when you look at the current stats on sales, they're really for drugs that are supportive if you think of anti-convulsant incentives and so on. But there is no drug currently available to prevent secondary brain injury. But we know the numbers are very large. And one thing we are doing is to pursue what's termed as moderate to severe traumatic brain injury initially. And there are a number of reasons for doing that. The first is that the dose form that we've developed is an intravenous dose form, and it can be given via infusion over 3 days. We are planning to develop an oral or intranasal dose form for milder forms of TBI like concussion. But for patients who suffer a severe traumatic brain injury, they're usually inpatient and an IV dose form is considered advantageous or preferred. The other thing about moderate to severe TBI as well as it comes under the classification of orphan drug. So there are benefits for developing an orphan drug like an accelerated regulatory pathway. You get tax breaks on clinical trial costs and so on. So that's the approach we're taking. And I would say that the treatment approach, the 3-day infusion would be the same for patients who sustained a traumatic brain injury and for patients who sustain a stroke. So just finally on that, I think the markets for moderate to severe TBI and concussion are quite different. I think the amount of money that you could reasonably charge for a drug to treat a serious and life-threatening condition is in a different ballpark to, say, a drug to treat a mild TBI or concussion. So we've got to make sure that we don't cannibalize 1 market cannibalizes the other.

Before we get to the next question, James, I'd encourage participants to post any questions that we have -- they have. We've got a couple of questions. We'll get to them shortly. But if you have any questions, please put them in the chat, and we'll get to them shortly. Last one, from this end is one of the key coming milestones and the future for BI03, James.

Sure. So following the successful completion of the efficacy study, we are now doing what's called GLP or good laboratory practice studies. Now these are regulatory mandated studies that have to be completed before first-in-human trials can be initiated. And that work is currently underway. It will take 3 to 4 months. And we're planning to have a quick transition from those studies into Phase I. So the Phase I study is planned to start second half of the year. The plan beyond Phase I is to open up INDs or investigational new drug applications with the U.S. FDA and then pursue Phase II development in the U.S. Now the reason we're doing it in the U.S., there are a number of reasons, in fact. It gives you access to a larger patient population. So that is important in terms of recruitment rates, although it would be great to have a couple of sites here in Australia as well. The other thing to -- and this is, in particular, related to traumatic brain injury is that the U.S., there's the potential for attracting nondilutive funding for clinical research from Phase I and beyond. And we feel that we've got a better chance of taking advantage of that if we run those studies in the U.S. But I think the main driver is really just the timelines and getting Phase II studies completed as quickly as possible. The Phase I study, which I'll talk about now -- bear with me second. The Phase I study will be run here in Australia. And this will be a healthy volunteer study. I think what's interesting about the development strategy for this drug is that this Phase I study will support going into a Phase II study for either stroke or traumatic brain injury. So we get a lot of bang for our buck out of this Phase I design. It will be in healthy male and female volunteers. And the design of the study is fairly standard. It's called a single ascending dose, multiple ascending dose study. We will start off giving single doses of the drug in an escalatory fashion. And following that, we'll then give the drug for 72 hours as a continuous infusion, which is the way we intend to dose in the clinical studies, Phase II clinical studies. So like I said, that study will get underway in the second half of the year. And -- once that's completed, we'll open INDs with the FDA and have a quick transition into Phase II. That includes everything I wanted to say, Dimitri.

Again -- we have a couple of questions, which I'll read out in a second. So if you have anything to ask, please do. Just one quick one, James. Is the Phase 1 dependent upon the Walter Reed study.

So the Walter Reed study, unfortunately, there's been a slight delay in getting that underway due to staff -- key staff unavailability, but that's planned to get underway shortly. And it's not on the critical path for Phase 1. It will run concurrent with the GLP studies and the Phase I study is not dependent on that.

Okay. Questions from Paul Hart. When do you expect the TBI program with Walter Reed commence, you've already addressed that? And are they funding the work?