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Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX)
Q3 2020 Earnings Call
Nov 5, 2020, 4:30 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good afternoon everyone and welcome to Eloxx Pharmaceuticals Third Quarter 2020 earnings webcast and conference call. [Operator Instructions] At this time, I would like to turn the call over to Barbara Ryan, Eloxx Investor Relations. Please begin.

Neil S. Belloff -- Chief Operating Officer, General Counsel & Corporate Secretary

Thank you, operator. Welcome and thank you for joining us this afternoon for a review of Eloxx Pharmaceuticals Third Quarter 2020 financial results and business update. Joining me this afternoon are Dr Greg Williams, our Chief Executive Officer, Neil Belloff, Chief Operating Officer and General Counsel, Dr Tom Haverty, our Chief Medical Officer, Dr Matthew Goddeeris, Vice President, Research and Steven McDonald, our Vice President of Finance and Accounting.

Before we begin, I would like to remind you that any statements made during the call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as our other reports filed with the SEC. Any forward-looking statements represent our views as of today, November five 2020 only. A replay of this call will be available on the company's website www.eloxxpharma following this call.

It is now my great pleasure to turn the call over to Dr Greg Williams, Chief Executive Officer of Eloxx Pharmaceuticals.

Gregory Williams -- Chief Executive Officer

Thank you, Barbara. And welcome to Eloxx's Third Quarter 2020 earnings webcast and conference call. We are continuing to advance our clinical and scientific programs for our She library. Our highest priority is to complete our Phase two clinical trials for ELX-02 in cystic fibrosis, we expect to report topline data in the first half of 2021 contingent on no further disruptions due to the COVID- 19 pandemic. We believe these proof of concept data will be a substantial value reflection point for our company.

We are pleased to report that the ELX-02 Phase two clinical trials independent safety review committees have conducted several planned meetings and allow dose escalation up to the highest dose. To date no drug-related serious adverse events have been reported. We are delighted to be conducting these trials, a top CF clinical trial sites and are gratified that the Cystic Fibrosis Foundation has contributed to the funding of our US ELX-02 Phase two clinical trial for this patient population.

The expressed level of interest and support from top investigators trial sites and patient advocacy groups has been tremendous. The Cystic Fibrosis Foundation has launched $500 million path to a cure initiatives aimed at finding cures for all CF patients. The Cystic Fibrosis Foundation's message that is that despite the success to date, there is still work to be done, is one that we did Eloxx agree with wholeheartedly. The foundations initiative is prioritizing innovative approaches for individuals who do not respond to currently available treatments. This includes those with nonsense mutations such as G542 times which is the focus of our ELX-02 Phase two clinical trials. Patients with nonsense mediated cystic fibrosis represent 12% of the CF population, according to the Cystic Fibrosis Foundation.

The potential ability of an investigational drug such as ELX-02 to restore functional CFTR protein production in these patients could be a major advance and substantially improve the length and quality of their lives. We believe that ELX-02 has the potential to be an important disease modifying therapy for these patients who feel left behind and how few if any treatment options. We are committed to advancing the development of ELX-02 as quickly as possible. As a reminder, our CF Phase two program consists of two open label trials, one for clinical investigators enrolling patients at sites in Europe and Israel and the second enrolling patients in the United States. Both trials focus on CF patients with at least one G542 times nonsense mutation. As I mentioned earlier, our US trial is being partially funded by the Cystic Fibrosis Foundation and our protocol has been endorsed by the CFF therapeutic development network.

The largest cystic fibrosis clinical trial network in the world. In Europe, our protocol has been endorsed by the ECFS Clinical Trial Network the FDA has granted ELX-02 in orphan designation for cystic fibrosis, which confers certain important benefits to support the development of medicines for underserved patient populations. In parallel, we continue to evaluate additional clinical trial sites in other countries, where patient enrollment may be feasible. We continue to be focused on delivering value to shareholders, while fulfilling our mission to provide treatment options to patients with high unmet medical needs in the most safe and expeditious manner. As our R&D team continues to advance our clinical and preclinical programs across our ERSG library, we've accelerated the pace of publishing our results in important scientific and medical journals.

Based on our continued progress, we expect that there'll be a steady cadence of additional data for ELX-02 in our library of ERSG compounds presented and published over the coming months. Just recently, we presented cystic fibrosis data for ELX-02 in two posters at the 2020 virtual North American Cystic Fibrosis Conference. These data demonstrate the ELX-02 selectivity for read through of premature stop codons, and describe our studies in patient derived organoids across a wide selection of cystic fibrosis nonsense alleles as we continue to identify new responsive genotypes. Globally renowned cystic fibrosis expert, Professor a Tom Terram MD, senior attending physician at the Hadassah Cystic Fibrosis Center in Jerusalem Israel, who recently joined Eloxx as a Senior Medical consultant, published a review in the expert opinion on investigational drugs Journal.

This review details the development of ELX-02 for the restoration of functional protein in nonsense mediated disease in support of our ongoing clinical trials. An additional scientific manuscript published in the Journal of Experimental Eye Research, discusses important proof of concept milestone that we achieved in our ongoing IND enabling studies demonstrating that our ERSG compounds can restore protein production in the eye when injected intravitreally in an animal model. Our screening programs continue to evaluate opportunities to advance ELX-02 and other novel molecules from our ERSG library for new indications. We are the most advanced company tackling the great challenge of developing potential new therapies for nonsense mutations. There is a high level of interest and enthusiasm in the scientific and clinical community for our programs as well as in the business community.

We will continue to pursue partnerships where appropriate, to expand our therapeutic footprint and to accelerate our progress. We ended the third quarter of 2020 with $30.6 million in cash and cash equivalents, and with the realignment of our resources in Q1, our cash runway extends through the end of 2021. We are well funded to deliver top line data for ELX-02 in cystic fibrosis in the first half of 2021 and to advance the pre-clinical activities for ELX-02 and our library of molecules in additional indications. We have a strong and experienced team with expertise in clinical drug development, basic research and regulatory affairs. I'm highly confident that we have the capabilities and the resources needed to deliver on our goals.

I would now like to turn the call over to Dr Matt Gutierrez, our Vice President of Research who will expand on our recent publications and scientific presentations.

Dr Matt Gutierrez -- Vice President, Research

Thank you Greg. We continue to advance our preclinical efforts across our ERSG library of molecules, convert with our research partners to advance our programs. As Greg mentioned, we are pleased to have had several of our scientific manuscripts published in leading peer-reviewed journals and continue to present our findings at scientific conferences. To date in 2020, we have presented at ARVO, the Association for Research in Vision and Ophthalmology, the North American Cystic Fibrosis, Fibrosis Conference and will present at the upcoming Annual Israeli Cystic Fibrosis Society Conference on November 19.

In addition, we have published two scientific manuscripts, one review, one original paper and have three additional original manuscripts under consideration. The accelerated cadence of our scientific communication tracks with the progress of the Eloxx discovery and development team in concert with our research partners. In our cystic fibrosis program, two posters were presented recently at the North American Cystic Fibrosis Conference. The first poster shared our findings published earlier this year in the journal of Pharmacology and Experimental Therapeutics demonstrating that while ELX-02 mediates read through of premature stop codon, the Fidelity of stop codon found at the end of Healthy transcripts is maintained.

This indicates that translational integrity is preserved with Target therapeutic exposure of ELX-02 consistent with a favorable tolerability profile across our preclinical and clinical datasets. The second poster discussed our ongoing effort to identify additional CF genotypes responsive to ELX-02 mediated read through expanding beyond the most common nonsense oils, which account for over 75% of the nonsense population, previously found to be responsive to ELX-02. This poster demonstrated a few key findings with CF patient derived organoids that help us better understand and interpret variability across samples with similar CF genotypes. These data will help us bridge the findings from our ongoing Phase II CF trials to individuals with less common nonsense oil.

As Greg mentioned, we are happy to announce the publication of a new manuscript on ELX-02 by Professor Eitan Kerem in MD a CFX experts who recently joined Eloxx as a Senior Medical Advisor. The manuscript is entitled ELX-O2 an investigational read through agent for the treatment of nonsense mutation related genetic disease and was published on October 12 in the Journal expert opinion on investigational drugs. The manuscript reviews, the development of ELX-O2 across multiple in vitro and in vivo disease models and the clinical study results thus far representing over 100 trial participants that have received ELX-O2. This review lays the groundwork for our currently ongoing Phase II trials. The other manuscript comes out of our ocular program entitled intravitreal administration of small molecule read through agents demonstrate functional activity and a nonsense mutation mouse model was published in the October two edition of The Journal of Experimental I Research.

This manuscript demonstrates that ERSG compounds from our library of read through molecules can be delivered intravitreally to achieve read through at the back of the eye. This work supports our ongoing preclinical IND enabling work in helping to establish a target exposure range and a sustained release formulation, which would provide consistent compound exposure over a period of time and a suitable for long-term chronic administration. As always, our latest publications and presentations can be found on our website. I would now like to ask Steve McDonald, our Vice President of Finance and Accounting to provide a review of our third quarter 2020 financial results.

Stephen MacDonald -- Vice President of Finance and Accounting, Treasurer

Thanks, Matt. As of September 30 2020, the company reported total cash and cash equivalents of $30.6 million which we believe will fund the company's operations through topline data in cystic fibrosis and through the end of 2021. For the quarter ended September 30 2020, the company incurred a net loss of $6.6 million or $0.16 per share. As compared to a net loss of $12.9 million or $0.32 per share for the same period in 2019. Non-cash stock compensation expense totaled $1.4 million with 1.1 million allocated to G&A and 300,000 to R&D. Third quarter 2020 R&D expense totaled $3.2 million compared to $6.8 million for the same period in 2019.

The quarter-to-quarter R&D expense decrease was driven by lower professional fees primarily resulting from the temporary pause in our clinical trials due to COVID-19 and reduced head count and related salaries for the 2020 in period. G&A expense for the third quarter of 2020 with $3.1 million, which decreased from $6.0 million for the same period in 2019 due to lower head count and professional services costs. Given the realignment effective in March, we expect that our cash burn rate will reach it well in the fourth quarter of 2020 and remain fairly stable throughout 2021 with some quarter-to-quarter variation. Also for your modeling purposes, our total shares of common stock outstanding as of September 30 2020, we're 40 million and 151,000.

This concludes the third-quarter financial comments and I'll turn the call back to Greg.

Gregory Williams -- Chief Executive Officer

Thank you, Steve. It's our highest priority to complete our Phase II proof concept clinical trials in cystic fibrosis and to report topline data in the first half of 2021. We believe that these data will be a major value inflection point for our company. We are pleased that the independent safety review committees for our ELX-O2 Phase two proof of concept clinical trials have allowed escalation up to the highest dose level and that to date, no drug-related serious adverse events have been reported. The patient population we are studying has few if any treatment options and the potential for ELX-02 to restore the production of CFTR protein could meaningfully, improve the quality and length of their lives. We are laser focused on assuring that we, our investigators and clinical sites can accomplish these calls.

We're also gratified that the FDA has granted orphan drug designation for ELX-02 for the treatment of cystic fibrosis, which can for several important benefits for the ELX- 02 program. Beyond cystic fibrosis, we continue to advance our portfolio of novel ERSG molecules. Several of these compounds demonstrate encouraging levels of read through activity and tolerability supporting their further therapeutic development. As we continue to advance our programs, there has been a marked acceleration in the number of scientific manuscripts being published in important journals. We expect this trend to continue as the R&D team has a growing number of manuscripts under review. We thank you for joining us on our third quarter 2020 earnings call and we look forward to continuing to update you on our progress.

Thank you very much, operator. You may now open the call for questions.

Questions and Answers:


Thank you. [Operator Instructions] There are no questions, you may proceed with final remarks.

Gregory Williams -- Chief Executive Officer

Thank you for your interest and attention. It's an exciting time to Eloxx and we look forward to updating you as we continue our progress.


[Operator Closing Remarks].

Duration: 17 minutes

Call participants:

Neil S. Belloff -- Chief Operating Officer, General Counsel & Corporate Secretary

Gregory Williams -- Chief Executive Officer

Dr Matt Gutierrez -- Vice President, Research

Stephen MacDonald -- Vice President of Finance and Accounting, Treasurer

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