TFF Pharmaceuticals, Inc. (NASDAQ:TFFP) Q3 2023 Earnings Call Transcript

TFF Pharmaceuticals, Inc. (NASDAQ:TFFP) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Good afternoon, ladies and gentlemen, and welcome to the TFF Pharmaceuticals Third Quarter 2023 Corporate Update and Earnings Conference Call. As a reminder, this conference is being recorded. I will now turn the call over to our host, Corey Davis of LifeSci Advisors. You may begin your conference.

Corey Davis: Thank you, operator. Hello, everyone, and welcome to TFF Pharmaceuticals third quarter 2023 corporate update and earnings conference call. With me on the line this afternoon, are Dr. Harlan Weisman, Chief Executive Officer of TFF Pharmaceuticals; Dr. Zamaneh Mikhak, Chief Medical Officer; and Kirk Coleman, Chief Financial Officer. Before we get started, I would like to remind everyone that this call will contain forward-looking statements, including, without limitation, statements about the anticipated timing of achievement of clinical milestones, the potential to see positive effects in our Phase 2 studies, the number of treated patients necessary to make decisions in regards to moving to Phase 3 studies, the market opportunity for our product candidates, and the expected timeframe for funding operations with cash and cash equivalents.

A lab technician in a lab coat and face shield examining a test tube of biopharmaceuticals.

These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in all of our findings with the U.S. Securities and Exchange Commission, including the Risk Factors section of our 2022 Annual Report on Form 10-K filed with the SEC. And now, it’s my pleasure to turn the call over to Dr. Harlan Weisman. Go ahead, Harlan?

Harlan Weisman: Thank you, Corey. And good afternoon, everyone. And thank you for joining us for our third quarter 2023, corporate update and earnings conference call. Last quarter, we detailed the considerable progress that we've made across a number of key areas in our ongoing Phase 2 studies of TFF VORI and TFF TAC. Based on these accomplishments and subsequent progress, we continue to expect initial clinical data from the Phase 2 studies by year end. Assuming results from both trials are positive, we believe these initial data will serve as a major catalyst for our company by providing the strongest evidence to-date of how Thin Film Freezing can improve a drug safety and efficacy in two rare disease patient populations. In anticipation of these data readouts, I'd like to spend most of our time on today's call discussing how TFF defines clinical success for both programs.

We will therefore spend time reviewing what endpoints will be presented and their clinical relevance within the context of these two rare disease indications. Our Chief Medical Officer, Dr. Zamaneh Mikhak, will lead this discussion in a moment. Following her remarks, our Chief Financial Officer Kirk Coleman, will review our third quarter results. We'll then open up the call for quick Q&A. Before turning the call over to Zamaneh. I would like to briefly note, that we continue to closely manage our expenses while prioritizing how we allocate our capital resources. In August, we closed a $5.7 million equity financing, providing us with sufficient funding to reach the initial data readouts, for the TFF VORI and TFF TAC programs and extending our runway into the second quarter of 2024.

Anticipating positive data from these studies, we continue to review our longer term capital planning efforts, as we think about advancing our two clinical programs into registration enabling studies. To that end, our 2023 proxy statement contains two voting items that are critical for executing our corporate strategy over the next several months, including a request to increase the company's stock authorization, and a request to implement a reverse stock split should the Board determined that it's necessary. Respectively, these two initiatives could significantly facilitate future fundraising efforts and ensure that we remain in compliance with NASDAQ listing requirements. We hope to have your support for both of these two important voting items.

With that, I'll now turn the call over to Zamaneh, who will preview our upcoming data readouts for TFF VORI and TFF TAC Phase 2 programs. Zamaneh?

Zamaneh Mikhak : Thank you, Harlan. As Harland mentioned, I'm pleased to review with you the type of initial data we plan to share by year end for the TFF VORI and TFF TAC Phase 2 studies. Focusing on the endpoints, their clinical relevance, and the definition of success. I'll start with TFF VORI. Let's begin with the unmet medical needs and the value proposition for TFF VORI. TFF VORI is being developed as a potential treatment for pulmonary fungal infections, including pulmonary aspergillosis starting with invasive pulmonary aspergillosis, or IPA. IPA is a life threatening fungal lung infection that primarily affects immunocompromised patients such as patients with hematologic malignancies, or individuals who receive solid organ or stem cell transplantation.

Voriconazole, is first line therapy for patients with IPA. However, when administered orally or intravenously, voriconazole is associated with high rates of toxicity and drug-drug interaction. The most common toxicities associated with voriconazole resulting in its discontinuation include liver toxicity, visual disturbances and rashes. Other potential serious toxicities or arrhythmias, QT prolongation and photo sensitivity. Drug-drug interactions represent another significant limitation of oral and intravenous voriconazole. Voriconazole can increase or decrease the levels of other drugs needed for the treatment of the patient's underlying illness such as chemotherapeutic or immunosuppressive agents, driving these drugs to sub therapeutic or toxic levels respectively.

Not surprisingly, the high rates of toxicities and drug-drug interactions lead to a poor prognosis. Patients with IPA have a 12-week mortality rate of approximately 30%, which clearly represents a significant unmet medical need for this rare disease. There are approximately 250,000 patients globally with invasive aspergillosis, which we believe represents a significant opportunity for TFF VORI. Thin Film Freezing technology enables us to address this opportunity by delivering voriconazole directly into the lungs where the IPA infection results. Through localized delivery, we hope to drive efficacy, while minimizing the patient's systemic exposure and thus systemic toxicities and drug-drug interactions. Our decision to advance the TFF VORI into Phase 2 testing was based upon acceptable safety and tolerability results in Phase 1 studies and positive efficacy results in two patients with pulmonary fungal infections treated with TFF VORI on a compassionate use basis.

The Phase 1A study with 65 healthy volunteers and the Phase 1B study with 16 mild asthmatics demonstrated that doses up to 80 milligrams twice a day were well tolerated and showed no signs of the toxicities commonly reported for oral and intravenous voriconazole. Results from the two compassionate use patients were also favorable. Both patients had a history of recurrent pulmonary fungal infections and systemic toxicities from available antifungal standard of care therapies. As a result of treatment with TFF VORI lung function stabilized, as shown in the middle chart. Lung lesions improved, as shown on the chart to the far right and fungal infection cleared. Aspergillosis in one patient status for any other patient. In both cases, there was no need for hospitalization, treatment with TFF VORI resulted in no drug-drug interactions, and no adverse events were reported.

Based on the favorable results from the Phase 1 studies and the two compassionate of use patients, a Phase 2 study was initiated in Europe. The ongoing Phase 2 trial is a randomized open label study evaluating TFF VORI versus oral voriconazole. The duration of treatment is 13 weeks, and the trial endpoints include safety and tolerability, clinical radiologic and micrologic response, as well as all-cause mortality. Before entering the 13-week treatment period, patients are screened to establish the diagnosis of proven or probable IPA. During the screening process, we gain an understanding of the patient's underlying condition that renders them immunocompromised and makes them vulnerable to fungal infections like IPA. To confirm, that the patient's infection is indeed caused by Aspergillus, by visualizing Aspergillus under the microscope, or growing it in culture, or by detecting its DNA, or by detecting galactomannan, which is a piece of the cell wall of Aspergillus that can break off and enter the bloodstream.

We document the signs and symptoms caused by the infection with Aspergillus such as fever, chest pain, coughing up blood, and shortness of breath and record their severity. We examined the impact of the infection on lung function, so spirometry, which is a test of how much air the patient can inhale, or exhale, and how fast. For example, FEV1 of forced expiratory volume 1, which measures the maximum amount of air a patient can forcefully exhale in one second, can be decreased in the setting of IPA. Finally, we assess the impact of infection and lung structures to do chest CT imaging and look for abnormalities such as nodules or spots in the lungs, or cavities. The parameters that established the disease status at baseline, such as evidence of infection, signs and symptoms, lung function and lung structure abnormalities on the endpoints of the study.

Overall, treatment response is assessed by mycological response, defined as clearance of Aspergillus infection, like clinical response, defined as improvement in signs and symptoms or lung function via spirometry and or by radiologic response, defined as improvement in lung structure via chest CT. Once through the screening process, patients enter the treatment period of their trial and are randomized in a 3:1 ratio to receive either 80 milligrams of TFF VORI twice a day, or 200 milligrams oral voriconazole twice daily. Patients are followed closely for emergence of adverse events, including all-cause mortality to assess safety and tolerability. In addition, clinical assessments are conducted through this 13-week treatment period for signs and symptoms, lung function and galactomannan.

Chest CT is repeated after 8 weeks and 13 weeks of treatment to detect improvements in lung structural abnormalities. Now I'd like to briefly discuss our Expanded Access Program or EAP. We launched our EAP in July in partnership with Durbin to provide access to TFF VORI for patients in need who do not qualify for ongoing Phase 2 study. The EAP provides 12 weeks of treatment with TFF VORI to patients who have limited or no other treatment options, or who have had an unfavorable response to adequate standard of care therapy. As you can see, our EAP encompasses many forms of pulmonary aspergillosis and also includes patients who have pulmonary fungal infections or than aspergillosis, that are responsive to treatment with voriconazole. Our U.S. Expanded Access protocol was submitted to the FDA late last spring.

And the EAP is now open in the U.S., Canada, Australia, the UK and select EU countries. Together we expect our Phase 2 trial try an EAP will provide meaningful evidence for the potential TFF VORI for the treatment of primary fungal infection. Given the considerable amount of historical safety and efficacy data with voriconazole this rare disease indication, we anticipate data from approximately 10 patients will be sufficient to guide a Phase 3 go no go decision. We plan to share initial data from a subset of these patients by year end, and a more complete dataset by the end of first quarter 2024. The year-end data will include assessment of safety, tolerability, and treatment response. And micrologic response will be defined by no evidence of Aspergillus in the assays performed post treatment for example, decreased or non-detectable galactomannan.

The clinical response will be defined as improvement in signs and symptoms, and or lung function measures such as FEV1. And radiologic response will be defined by improvement in the abnormal findings from chastity, such as the number and or size of nodules or spots or cavities, et cetera. So, how do we define success for TFF VORI? We define success as an overall decrease in toxicities commonly seen with oral or intravenous voriconazole, a decrease in drug-drug interactions compared with historical data and evidence of micrologic, clinical and or radiologic response after 12 or 13 weeks of treatment with TFF VORI in the majority of patients. Now, I'd like to discuss our TFF TAC Phase 2 program. TFF TAC is being developed to address a significant unmet need in lung transplant rejection, by way of background, tacrolimus is a first line calcineurin inhibitor indicated for the prevention of rejection of lung transplant.

However, there are well known significant toxicities associated with the oral and intravenous formulation. TFF TAC has been designed using Thin Film Freezing, to deliver an inhaled form of tacrolimus directly into the lungs, which is the site of inflammation against the transplanted organ, to drive efficacy to immune suppression locally, while limiting systemic exposures and systemic toxicities. Similar to TFF VORI, TFF TAC addresses a high unmet medical need. Patients receiving a lung transplant have an expected five-year mortality rate of approximately 50% due to oral tacrolimus narrow therapeutic index. Two little immune suppression leads to acute rejection or chronic rejection leading to chronic lung allograft dysfunction or CLAD, whereas too much immune suppression leads to infections, chronic kidney disease and post-transplant malignancies.

There are approximately 40,000 lung transplant patients globally, which will present a significant opportunity to introduce a therapy such as TFF TAC, with the potential to improve upon the current standard of care. Similar to TFF VORI, the decision to advance TFF TAC into Phase 2 testing was supported by strong preclinical and Phase 1 data, which demonstrated acceptable safety and tolerability and an attractive differentiated pharmacokinetic profile, compared to the oral tacrolimus. Our preclinical data demonstrated a favorable distribution of tacrolimus showing high concentrations of the drug and demand relative to systemic blood levels. In our Phase 1 study in healthy subjects, daily dosing of up to 5 milligrams in a single dose and 1.5 milligram in repeated doses were generally well tolerated.

Our ongoing Phase 2 trial of TFF TAC tag is an open label single arm study in lung transplant patients who require reduced tacrolimus blood levels due to kidney toxicity. The study is designed in two parts. Part A is a 12-week treatment period, and Part B is an optional safety expansion period. Prior to receiving treatment, patients go through a two week screening period to collect several baseline measurements. Baseline kidney function is documented and bronchoscopy is performed to make sure patients do not have a lung infection. The biopsy samples taken during bronchoscopy is used for genomics analysis, to look for baseline signs of acute rejection. Spirometry is performed to assess the patient's lung function, blood is drawn to measure donor-derived cell-free DNA, which serves as a non-invasive biomarker of stress or injury to the transplanted lung due to rejection.

Finally, lung imaging is performed to look for infection, inflammation and damage from chronic rejection. Once screening is completed, patient’s oral tacrolimus is stopped, and patients enter the 12-week treatment period with TFF TAC. Clinicians than monitor tacrolimus blood levels and adjust the dose of TFF TAC as needed to achieve tacrolimus blood levels that are approximately two-thirds to one half of the patient's blood levels on oral tacrolimus. These blood levels are expected to be high enough to avoid rejection, but low enough to reduce toxicities. Following the treatment period, the same endpoints measured during the screening phase are reassessed including spirometry for lung function, bronchoscopy and biopsy for genomics analysis, and donor-derived cell-free DNA for signs of stress or injury to the transplanted lung.

Safety and tolerability are assess this study including assessment of kidney function through glomerular filtration rate and creatinine level, patients are have been given the option to enter the trials open label extension. Similar to oral voriconazole, there exists a significant amount of historical patient safety and efficacy data for oral tacrolimus. We therefore believe that clinical data from approximately 10 patients will be sufficient to help us determine a Phase 3 go no-go decision. We plan to share initial data from a subset of these patients by year end, and a more complete dataset by the end of the first quarter 2024. So again, how do we define success for TFF TAC at this stage? Because TFF TAC delivers tacrolimus directly into the lungs, we expect to achieve a higher concentration of tacrolimus in the lungs relative to the systemic circulation.

As a result, we expect to provide immune suppression sufficient to prevent rejection of lower systemic exposures that is at lower cost of systemic toxicities. We define success as the ability to transition patients from oral tacrolimus to TFF TAC, achieve to crawl on this blood levels that are approximately two-thirds to one-half of the patient's blood levels on oral tacrolimus, prevent rejection at these diminished tacrolimus blood levels while stabilizing kidney function. As mentioned, bronchoscopy and biopsy will be repeated at the end of the treatment period. Genomic analysis of the biopsy sample will inform presence or absence of rejection. Blood will be obtained and assessed for donor-derived cell-free DNA to look for injury and stress to transplanted lungs and other potential signup impact rejection.

Lung function will be assessed as well as glomerular filtration rate and creatinine to understand kidney function. That concludes my presentation on the upcoming data readouts for our TFF VORI and TFF TAC programs. I'll now turn the call over to Kirk, to review our third quarter financial results, Kirk?

Kirk Coleman: Thank you very much, Zamaneh. Our cash and cash equivalents as of September 30 2023 were $9.7 million, based on gross proceeds of $5.7 million received from the financing transaction that closed on August 17. Our current cash runway is expected to fund operations into the second quarter of 2024. We remain mindful of our capital resources and continue to monitor our expenses to ensure we are only spending on our core activities. Research and development expenses for the third quarter of 2023 for $2.4 million, compared to $4 million for the comparable period in 2022. The $1.6 million decrease year over year is primarily results of reduced clinical and manufacturing expenses. General and administrative expenses for the third quarter of 2023 for $2.3 million, compared to $3.3 million for the comparable period in 2022.

The $1 million decrease year-over-year is primarily related to decreased professional fees, patent expenses, insurance, consulting, market research, payroll, and related expenses. The net loss for the third quarter of 2023 of $4.4 million, compared to a net loss of $7.3 million in the comparable period in 2022. And now I'll turn the call back over to Harlan.

Harlan Weisman: Thank you, Kirk. I hope today's call has provided you with a clearer understanding of our TFF VORI and TFF TAC Phase 2 trial designs, clinical endpoints, and most importantly, with the value we hope to bring to patients who are suffering from these two rare diseases. I think it's also worth mentioning once again, that relative to clinical programs involving new chemical entities, we believe that development risk associated with the TFF VORI and TFF TAC programs is significantly reduced, given the well-established historical data available for these molecules. Generating positive results in our Phase 2 studies will further validate our technology and demonstrate how our lead pipeline assets, TFF VORI and TFF TAC represents significant improvements over the current standard of care.

I would like to thank our shareholders for your continued support and confidence in TFF Pharmaceuticals, and we look forward to updating you on our progress throughout the rest of the year. That concludes our formal remarks. And I'd now like to open the call up for the question and answer session. Operator.

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