Image source: The Motley Fool.
GlycoMimetics Inc (GLYC 1.09%)
Q4 2019 Earnings Call
Feb. 28, 2020, 8:30 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning and thank you all for joining the GlycoMimetics' call. [Operator Instructions] I would now like to turn the call over to Shari Annes of Investor Relations Group at GlycoMimetics. Please go ahead.
Shari Annes -- Investor Contact
Good morning. Today we will highlight the key developments of 2019, and of course, the fourth quarter of the year as well. The press release we issued this morning on our year-end and fourth quarter financials is available on the Company's website at www.glycomimetics.com under the Investors tab.
This call is being recorded. A dial-in phone replay will be available for 24 hours after the close of the call. The webcast replay will also be available in the Investor Relations section of the Company's website for 30 days.
Joining me on the call today from GlycoMimetics are Rachel King, Chief Executive Officer, and Brian Hahn, Senior VP and Chief Financial Officer. We'll start today's call with comments from Rachel, and after that, Brian will provide an overview of the Company's financial position. We will then open the call for Q&A. Our Senior VP of Development and our Chief Medical Officer, Dr. Helen Thackray will join us for the Q&A.
I'd like to remind you that today's call will include forward-looking statements based on current expectations. Forward-looking statements contained on this call include, but are not limited, to statements about the Company's product candidates uproleselan, GMI-1359, and rivipansel as well as our other pipeline programs. Such statements represent management's judgment and intention as of today and involve assumptions, risks and uncertainties.
GlycoMimetics undertakes no obligation to update or revise any forward-looking statement. For information concerning the risk factors that could affect the Company, please refer to GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics' website.
I'd now like to turn the call over to Rachel.
Rachel K. King -- Chief Executive Officer
Thank you, Shari, and thank you all for joining our call. This morning, I'd like to share my perspective on the achievements of 2019 and some recent events. We ended the year with robust enthusiasm for our uproleselan program in acute myeloid leukemia or AML. Our clinical team worked hard throughout the year to advance our Phase III registration trial in relapsed/refractory AML.
In addition, the team collaborated with the National Cancer Institute to advance their multi-center registration trial evaluating uproleselan in the newly diagnosed patient population fit for intensive chemotherapy, I'll provide more details on the status of both of these trials later in the call.
Turning to rivipansel, with Pfizer's recent decision to return the rights back to us in early April, we can now review the entire clinical dataset, including the Phase II, Phase III and open label extension study to determine if there is a potential path forward for this asset in vaso-occlusive crisis or VOC. We and many KOLs in the sickle cell community continue to believe that the role of the selectins in VOC has been clinically validated. As such, with the asset back in our hands, we intend to evaluate and share the efficacy, safety PK and biomarker data from the Phase III reset trial.
Our primary focus in 2019 was on uproleselan. We had another very productive meeting at the American Society of Hematology or ASH in December. Our research and clinical groups reported on multiple developments relating to E-selectin that accentuate our precision medicine focus and reinforce our understanding of this mechanism, namely, first the E-selectin act as a major driver of environment mediated drug resistance in AML through the up-regulation of cancer survival pathways such as NF-kappa B.
Second that expression of the E-selectin ligand on leukemic blast and leukemic stem cells is a prognostic indicator for poor outcomes in AML. Third, that uproleselan, by breaking the underlying chemo resistance has the potential to selectively disrupt this interaction within the bone marrow micro environment to improve patient outcomes. Interest in disrupting the protective tumor microenvironment continues to grow.
The new data we presented at ASH expands our understanding of the role we believe E-selectin plays in the pathology of AML, namely the tenacity of tumor cells in the bone marrow microenvironment and their survival. Hence the potential role of uproleselan in breaking chemo resistance of AML.
Equally fascinating is the data on the E-selectin ligand's role as a prognostic factor for AML. Together with collaborators from the Fred Hutchinson Cancer Research Center, at ASH, we showed a gene signature that's associated with synthesis of the E-selectin ligand and which is strongly prognostic for poor outcomes in pediatric and young adult patients with AML.
This makes observations from our Phase II trial particularly compelling. The data that we reported at ASH suggests that patients with high levels of E-selectin ligand who are at high risk of poor outcomes did particularly well when treated with uproleselan. This increases our confidence in the potential benefits of using uproleselan in the treatment of AML.
With an ever-growing data set that underscores the importance of environment mediated drug resistance, we believe that many clinicians appreciate the novel mechanism of action of uproleselan and its potential to prolong overall survival. Additionally, our clinical trials of uproleselan have demonstrated the drug's potential to ameliorate some of the serious adverse effects of intensive cytotoxic chemotherapy.
We believe this could significantly improve clinician and patient interest in uproleselan as part of the combination chemotherapy. This unique profile differentiates uproleselan from other therapeutic approaches. With the belief that uproleselan has the potential to augment deep clinical remissions, enthusiasm for our Company-sponsored Phase III registration trial and the NCI sponsored Phase III trial is high.
After assessing accrual over the past 12 months, we anticipate completion of enrollment in our Phase III trial in relapsed/refractory AML in the second half of 2021. With regard to the frontline AML trial being conducted by the NCI, enrollment was reported at ASH in December to be at 59 patient. If successful, each of the ongoing pivotal trials could potentially be used for registration in a different AML population. This would provide excellent positioning for uproleselan in the market as a potentially foundational therapy in all patients with AML who are eligible for intensive chemotherapy either at initial diagnosis or in relapse.
Lastly, with regard to uproleselan, we were pleased to announce at the beginning of this year a combination -- a collaboration and license agreement with Apollomics to bring uproleselan as a potent subcutaneous follow on compound to the Greater China market. I'll say more about the collaboration in our next call. We believe that Apollomics, an innovative biopharmaceutical company committed to the discovery and development of oncology combination therapies, is the ideal long-term strategic partner.
Incubated by OrbiMed China, the Company has highly experienced leadership team and drug development capabilities that we believe will enable Apollomics to bring these novel therapies to patients in Greater China with AML and other hematologic malignancies. Beyond AML, we believe our ability to inhibit E-selectin activity may also be important in other cancer indications. As a result, in 2019, we worked closely with the Duke Cancer Institute to initiate a clinical study of GMI-1359, a dual antagonist of E-selectin and CXCR4 in breast cancer patients with bone metastases.
The first patient for this study was enrolled in January. Here, we will be looking at a number of biomarkers of pharmacodynamic activity across a range of different dose levels to inform a Phase II program. For some time we've conducted pre-clinical studies to evaluate the potential use of GMI-1359 and osteosarcoma, a painful and debilitating disease primarily affecting children.
In January of this year, we received new patent protection for this molecule as well as orphan drug and rare pediatric disease designations from the FDA. These achievements can provide future marketing protections for the GMI-1359 program.
Our focus on E-selectin and AML is complemented by our work on other molecular targets such as CXCR4 and GMI-1359 and the galectins, where we continue to work to optimize drug candidates. Our work represents a precision medicine focus on specific factors in the tumor microenvironment that play critical roles in disease proliferation, progression and resistance. With an increasing number of relevant biomarkers being identified, we are in a stronger position than ever to capitalize on this opportunity.
In closing, we're confident in pipeline opportunities that are already in place as well as new opportunities. Across the Company, we're dedicated to improving patient outcomes and as a result increasing the value of your investment in the Company.
Before I turn the call to Brian, our CFO, I'd like to say that we are financed into 2022 with the resources to advance our programs through key milestone events. Brian?
Brian Hahn -- Chief Financial Officer and Senior Vice President
Thank you, Rachel. As of December 31st, 2019 GlycoMimetics had cash and cash equivalents of $158.2 million compared to $209.9 million as of December 31st 2018. The Company's research and development expenses decreased to $11.5 million for the quarter ended December 31st 2019 as compared to $12 million for the fourth quarter of 2018. This decrease was due to a reduction in manufacturing expenses, partially offset with an increase in clinical expenses in the fourth quarter of 2019 as compared to the same quarter in 2018.
In the fourth quarter of 2018, the manufacturing expenses were higher due to large purchases of raw materials for the NDA manufacturing batches that were initiated in 2019. The clinical expenses increased in the fourth quarter of 2019 due to the site start up activities related to the Company-sponsored Phase III clinical trial.
Research and development expenses increased $6.9 million to $47 million for the year ended December 31st 2019 from $40.1 million for the year ended December 31st 2018. Clinical development expenses increased by $6.4 million primarily as a result of increased clinical costs related to our ongoing global Phase III clinical trial and the Phase II/III clinical trial being conducted by the NCI which opened for enrollment in early 2019.
Personnel related and stock-based compensation expenses increased due to an increase in clinical head count and stock option and restricted stock unit awards granted in 2019. These increases were offset in part by $2.6 million decrease in manufacturing and formulation due to lower raw material costs in 2019 as compared to 2018.
Turning now to G&A expenses, the Company's general administrative expenses increased to $3.9 million for the quarter ended December 31st, 2019 as compared to $2.9 million for the fourth quarter of 2018. General and administrative expenses for the year ended December 31st 2019 increased to $14.4 million as compared to $11.4 million for the prior year. These increases were primarily due to an increase in legal and patent expenses as well as labor-related cost and stock-based compensation expense.
Patent expenses were higher due to an increase in the number of patent applications filed in 2019 as compared to 2018. Personnel related and stock-based compensation expenses increased due to additional headcount in 2019, annual salary adjustments and stock option grants. In summary GlycoMimetics is well positioned to carry out its planned initiatives and to advance applications for its unique technology platform.
I'll now turn the call back over to Rachel.
Rachel K. King -- Chief Executive Officer
Thank you, Brian. I'd like to close by saying our clinical pipeline is strong and our specialized GlycoMimetics chemistry platform is providing opportunities to improve the standard of care in AML as well as other cancers and fibrotic diseases. We have a stellar team in place to deliver results and we're financed to take the Company through key milestones.
Operator, please open the call for questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Our first question comes from Stephen Wiley from Stifel. Please go ahead.
Bonnie Quach -- Stifel -- Analyst
Hello? Hi, this is Bonnie Quach on for Stephen Willey. I was wondering if you could provide any more detail around your plans to pursue osteosarcoma. And I know it's early, but can you give us an idea of how you're thinking about the osteosarcoma market and the market opportunity for GMI-1359?
Rachel K. King -- Chief Executive Officer
Sure. Thank you for your question. It is early to say much about osteosarcoma in terms of the market opportunity. But what I can say is that we've identified it as an opportunity in which there is a high unmet need, clinical need and one in which our GMI-1359 has performed very well in preclinical studies. It's also an area where, based on data in the literature, we recognize that both of the targets the GMI-1359 addresses are important potential targets in the progression of that disease. And for those reasons, we think there's excellent biological and clinical rationale to potentially pursue osteosarcoma.
But let me take a moment and say a bit more about 1359 generally and what we're doing in the current clinical trial to position us a bit further. We're currently doing a dose escalation trial in breast cancer patients who have disease that has metastasized to the bone and that's a study that we expect will enable us to identify an appropriate Phase II dose. And once having done that, then to position the drug to be able to then be expanded into Phase II trials. And so, at that time, we would be looking at potentially moving into osteosarcoma or potentially target indications within breast cancer.
So now we're getting the initial clinical data in terms of pharmacodynamic activity in patients and that in combination with the other preclinical data would direct us toward the final selection of the indication for the next Phase II trial.
Bonnie Quach -- Stifel -- Analyst
Great, thank you so much. And I wanted to know a bit more about the biomarkers that you've chosen to measure in your breast cancer with bone metastases patients?
Rachel K. King -- Chief Executive Officer
Sure. I'm going to actually turn that question over to Helen Thackray, our Chief Medical Officer, she could comment a bit more about that particular study?
Helen Thackray -- Senior Vice-President, Clinical Development and Chief Medical Officer
Good morning. So in that study, we are assessing dose escalation and pharmacokinetics to support dose decision making pharmacodynamic assessments are particularly important and also assessing that. We're looking for items that are -- biomarkers that are supportive of proof of mechanism for the molecule in patients who have bone metastases with breast cancer tumors. For example, circulating tumor cells to demonstrate mobilization of the tumor cells from the bone metastases for administration of GMI-1359.
We're also looking for markers that are relevant to the disruption of the tumor microenvironment in the bones or markers that assess bony disruption and we're looking at markers that, of CXCR4 activity on the bone marrow such as mobilization of stem cells, measured by CD-34 positive.
Bonnie Quach -- Stifel -- Analyst
Great, thank you so much for answering my questions.
Helen Thackray -- Senior Vice-President, Clinical Development and Chief Medical Officer
Sure. Thank you.
Operator
Thank you. [Operator Instructions] I show no further questions in the queue. At this time, I'd like to turn the call over to Rachel King CEO for closing remarks.
Rachel K. King -- Chief Executive Officer
Thank you, operator, and thank you everyone for your questions and for taking the time to listen to the call.
Operator
[Operator Closing Remarks]
Duration: 17 minutes
Call participants:
Shari Annes -- Investor Contact
Rachel K. King -- Chief Executive Officer
Brian Hahn -- Chief Financial Officer and Senior Vice President
Bonnie Quach -- Stifel -- Analyst
Helen Thackray -- Senior Vice-President, Clinical Development and Chief Medical Officer
Transcript powered by AlphaStreet
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
