Navidea Biopharmaceuticals, Inc. (NYSEMKT:NAVB) Q4 2020 Earnings Conference Call March 24, 2021 5:00 PM ET
Jed Latkin - Chief Executive Officer, Chief Operating Officer and Chief Financial Officer
Joel Kaufman - Chief Business Officer
Michael Rosol - Chief Medical Officer
Conference Call Participants
Michael Okunewitch - Maxim Group
Vernon Bernardino - H.C. Wainwright
Greetings. Welcome to the Navidea Biopharmaceuticals Q4 2020 Earnings
Call. [Operator Instructions] Please note this conference is being
recorded. I will now turn the conference over to your host, Jed Latkin,
CEO of Navidea. Thank you. You may begin.
Thank you, Hillary. First off, I want to start by saying this call is
being webcast live on our website and a replay will be made available.
Following prepared remarks, we will be conducting a question-and-answer
segment. Navidea’s Chief Medical Officer, Dr. Rosol and the company’s
Chief Business Officer, Joel Kaufman, will be joining me on the call
today as well.
During the course of this conference call, we will be making
forward-looking statements regarding future events and the future
performance of the company. These events relate to our business plans to
develop Navidea’s molecular diagnostics and immunotherapeutics, which
include clinical and regulatory developments and timing of clinical data
readouts along with capital resources and strategic matters as well as
the impact of the COVID-19 pandemic on Navidea’s business operations.
All of these statements are based on the beliefs and expectations of
management as of today. These statements involve certain assumptions,
risks and uncertainties and could cause actual results to differ
materially. We assume no obligation to revise or update forward-looking
statements, whether as a result of new information, future events or
otherwise. Investors should read carefully the risks and uncertainties
described in – within the Safe Harbor section of our website as well as
the risk factors included in the company’s most recent quarterly and
annual filings with the SEC.
The fourth quarter and beginning of the year marked several key
moments for the company. We were able to successfully complete
enrollment and complete all the imaging in the Phase 2b study. This was
something that I thought we wouldn’t be able to do given the situation
with covet around the country, but I would like to thank the various
sites for keeping the recruiting open and getting all the patients in
the door and image successfully.
Our discussions in Europe are progressing well. And in the meantime,
we will be distributing the product with the assistance of a company
that has excellent distribution capabilities throughout Europe. I want
to thank my transition team for continuing to push forward with what has
been a very difficult transition given the COVID restrictions. It has
been quite the task to set up a network of distribution without being
able to do any face-to-face meetings or market the products to any new
partners. We have had quite a few meetings with potential partners and
are working through some potential arrangements to find the right
partner to agree with to distribute and sell the product. It’s important
that we bite our time and make an agreement that will benefit the
company and its shareholders for the long term. The European market is
much different than the U.S. one, and our previous partner was not
skilled in radiopharmaceutical product distribution, which has created
some unique challenges in finding another partner.
In this past quarter, we completed a $5 million placement with our
largest shareholder, Mr. Scott and continued to receive inflows from
Keystone as they work towards completing their $15 million commitment
under the Series D preferred. Our discussions with Jubilant continue and
we have turned our focus towards the data that we will generate over
the next several quarters in the 3-32 trial. The biopsy data that we
hope to generate as we start to enroll patients will be invaluable
towards increasing the value of the RA product. We feel strongly that
positive correlation results in this trial will enhance the label of the
product right from the get-go.
I am happy that we are able to start enrolling in – at northwestern,
and hopefully, the lockdown in the UK will end soon so that we can start
enrolling over there as well. It’s unfortunate that the COVID lockdowns
inhibited us from starting the trial on time. But the second we got the
green light in Illinois, the paperwork had all been filed, and we were
ready to roll. We are also ready to roll in the UK as soon as the
surgery centers reopen for elective procedures. We expect the next
quarter to be very busy as we continue the dialogue with the FDA and get
ready for the launch of the Phase 3 for RA. We made the decision to
finish as many of the arm 3 patients as we could before submitting the
briefing book and I believe that was the right thing to do in order to
give the FDA as much data as possible as we move towards the Phase 3
Before I turn things over to Dr. Rosol, I want to once again thank my
entire team for all their tireless hours of work in this most difficult
environment. I also want to thank our European consultants that have
been invaluable in helping us move the European partnership forward
since we have been unable to travel over there to do the necessary
face-to-face partnering meetings that would normally get a deal done.
Now I’d like to turn the call over to Dr. Rosol, who will cover the clinical portion of the call. Mike?
Thank you, Jed and hello everyone. As always, I am happy to
participate in today’s call and provide you with updates from the
clinical side. I will begin with the progress on our Phase 2b trial,
NAV3-31 in RA. I am pleased to announce that we have had the last
patient, last visit event in this trial, meaning all of the
patient-related events are completed, including imaging and clinical
assessments. I would like to thank the clinical team as well as well as
all of the PIs and personnel at the various sites for their tireless
efforts to complete this trial during particularly difficult times.
Final data monitoring, validation and analysis are ongoing.
As you know, this trial and the data we have analyzed from it thus
far were critical to moving us forward in RA. As a reminder, this Phase
2b is a three-arm trial. And arms 1 and 2, we have been evaluating the
repeatability, reproducibility and stability of our tilmanocept imaging
readout in both healthy subjects and in patients with active RA. And in
the third arm, we are mirroring the upcoming Phase 3 study to obtain
data to help with sample sizing for the Phase 3 as well as to have a
first look at the ability of tilmanocept imaging to serve as an early
predictor of treatment efficacy and as a monitoring tool.
As we have discussed and presented in the past, the interim results
to date in all 3 arms were very positive. We have data demonstrating
that technetium 99m tilmanocept can provide robust quantitative imaging
in healthy controls and in patients with active RA that this imaging is
reproducible and can define joints with and without RA involved
inflammation and that the tilmanocept imaging readout can provide an
early prediction of treatment efficacy of anti-TNF-alpha therapy, in
some specific cases, using the baseline scan alone. In November, we
presented the positive interim analysis results of arm 3 at the American
College of Rheumatology’s Annual Meeting and we provided an update on
the positive interim news on our last shareholder call.
We have also submitted our briefing package containing interim
results from this study as well as the proposed Phase 3 design and
analysis plan to the FDA and the FDA is currently reviewing these formal
briefing documents. This was a large undertaking with the final package
of information containing over 800 pages, covering our complete RA
development program with an emphasis on the data from NAV3-31. As you
may know, this is a regulated process with guidances recommending
specific time lines for material submission as well as FDA responses.
Based on the guidance, we expect to hear back from the FDA shortly.
Keep in mind, however, that these are guidances only, and so the
response to our materials might take longer than expected. Once we
receive the response, there might be clarification or responses
requested, and we will work diligently to respond in a timely fashion to
any and all questions so that we can initiate the Phase 3 as soon as
possible and we are preparing for that currently. You should also know
that while the strategy we pursued is an aggressive one, we believe
we’re doing it smartly. Usually, this type of FDA meeting would occur
after completion of a Phase 2 or Phase 2b, following full analysis of
the data with the Phase 3 discussed and beginning, thereafter.
In conjunction with the positive interim data from the current trial,
we’ve sought guidance from the FDA and have aligned development of our
RA program with the agencies suggestions. In so doing, we have
integrated their earlier suggestions into the proposed design of the
Phase 3. Because of this, we believe we have presented a strong data
package in support of the study design and indications. This strategy
will enable us to begin the Phase 3 with confidence earlier than might
otherwise be the case. Our goal in seeking feedback from the FDA at this
time is to ensure we maintain alignment and that they agree that our
proposed plan, if successful, could be used to make the case for
approval of tilmanocept in RA.
Soon, you will see on the clinicaltrials.gov site that we will have
opened up a healthy control study to establish what is called a
normative database for tilmanocept in RA. An integral part of our
ability to discriminate RA-inflamed joints from those that do not have
inflammation is the knowledge of what healthy joints look like
quantitatively. We use the healthy control data from arm 1 of the Phase
2b to start to set these parameters, and we will use this study to add
to the size of the current normative database. This should enable us to
discriminate RA-involved joints from non-RA-involved joints with
improved accuracy and should have a positive impact on our ability to
predict treatment response. An additional objective of this trial will
be to evaluate SPECT/CT in a number of healthy subjects in RA-involved
patients in order to establish the feasibility and possible utility of
SPECT imaging for these purposes. There are some potential advantages to
using SPECT/CT for this type of imaging, and this pilot arm should put
us in a good position looking ahead to the application of SPECT/CT for
tilmanocept imaging in RA. This trial should open for enrollment next
month and will run in parallel with the Phase 3 as well as the biopsy
And speaking of the biopsy study, as Jed mentioned, we have opened up
enrollment at Northwestern University into this Phase 2b comparative
study of tilmanocept imaging to histology from the joints of patients
with RA. In this study, we aim to recruit patients with each of the
three known subtypes of RA in order to obtain comparative imaging and
pathology results from biopsies of their RA-inflamed joints. In addition
to Northwestern, we are working to open up our first UK site and we are
scheduling a remote site initiation visit to occur in the coming weeks.
As you heard from Jed, there were a couple of rounds of COVID-related
delays in opening up the UK site. But as of this moment, things appear
to be on track for opening up the site and recruitment into the trial.
The reason we have selected this UK site, you might recall, is that our
lead principal investigator for the trial is located there and he is the
world’s leading physician in joint biopsy of patients with RA and he
maintains a laboratory specializing the examination of the pathological
results from these biopsies. Remember that this trial is not required
for FDA approval in the initial indications in RA that we are going for,
but we believe it is critical in order to achieve qualification of
CD206 as a biomarker for RA as well as to engage with pharma for use in
clinical trials of new RA therapeutics. It will also provide
rheumatologists with gold standard information related to our imaging
readout and the fundamental biology of a patient’s rheumatoid arthritis.
For example, results from this study could directly demonstrate that
tilmanocept imaging can be used to determine a patient subtype of RA.
This would have implications for what class of therapies might or might
not work on that particular patient. This could, therefore, have
immediate impact on the management of RA patients.
On the cardiovascular disease front, work is continuing on the
investigator-initiated atherosclerotic plaque imaging study at MGH in
Boston. They are very close to achieving full enrollment after a
slowdown due to COVID restrictions. The data we have seen thus far have
been promising in terms of localization of tilmanocept to sites of
atherosclerotic plaque and have been in line with what was reported in
the pilot study we co-published with them previously. Preclinical
studies of Gallium-68 tilmanocept imaging for our NIH-funded project
with the University of Alabama, Birmingham, are also ongoing.
We have also made important strides forward on the therapeutic front.
I will just touch upon a couple of these here. For indications in
oncology, we have performed preclinical studies that demonstrate
macrophage phenotype change from an immunosuppressive to a
pro-inflammatory state and a synergistic effect on tumor growth
reduction in animal models using our doxorubicin-containing construct
with an approved checkpoint inhibitor therapy. Put more simply, the
tumors grow at significantly reduced rate with our molecule, combined
with an approved drug compared to the approved drug alone. We have now
seen this in different tumor models and combined with different
therapies. These are important mechanism of action and proof-of-concept
studies that need to be done in order to move forward, and we are
excited by these results thus far. We plan to present these results at a
conference as well as in manuscript form in a journal. Currently, we
are preparing to initiate a preclinical dosing schedule study, looking
at different starting points for therapy and are looking to run a
toxicology study this year with an eye towards first-in-human studies.
We also have promising preclinical results related to increasing the
delivery of our molecule whether it be labeled as a radiopharmaceutical
or with a drug for a therapeutic to areas of interest versus off-target
localization. This could have far-reaching positive implications for our
compounds related to efficacy and safety. We continue to make
significant strides towards producing the next-generation of our
molecule that we think will improve performance in both diagnostic as
well as therapeutic applications as well. We believe we have also
improved the methods of synthesis for both diagnostic and therapeutic
constructs and are currently working on and intend to file another
provisional patent application covering a new synthesis protocol.
We have also had positive developments on the IP front. We received a
notice of patent grant from the USPTO for application-entitled
compositions for targeting macrophages and other CD206 high expressing
cells and methods of treating a diagnosis. The main IP here relates to
the linkers we used that deliver our drug payload, whatever that payload
might be, to the cells that express CD206. This is an important and
fundamental protection for our therapeutics pipeline. We have also
received the notice of allowance from the USPTO for the patent
application titled [Technical Difficulty] diagnosis and treatment of
viral infections. This relates to possible therapies for a variety of
viral diseases, including dengue, yellow fever and other diseases caused
by fever viruses. I can assure you that we have an active IP protection
strategy that we believe will provide needed protections and rights to
both our current diagnostic and therapeutic agents as well as to our
next-gen molecules and disease indications.
Those are just some of the highlights of the last quarter that we
wanted to touch on for this update. We remain largely focused on the RA
pipeline, specifically preparation for the Phase 3 enrollment in the
currently open biopsy study and opening of the normative database study
while we also continue to support and push for progress on our other
diagnostic and therapeutic indications, some of which I’ve touched upon
today. As always, I want to thank the team here for their tireless
efforts to keep things moving and our network of clinical trial sites
and academic research collaborators for all of their hard work. I wanted
to keep these remarks relatively brief today. I’m not sure that I did.
But please feel free to ask questions during the Q&A. And thank you.
Now I will turn the call back over to Jed.
Thank you, Mike. I think one of the points that I do want to update
you on, that Michael discussed, was that IP, I think that IP might have
gotten lost since it occurred around the time when I know many of you
were tuned into trial in December. But that IP is really key and that’s
something that we have been negotiating with the individuals at OSU for
many, many years. That was something that at one point in time looked
like would never happen due to some issues in the past, but we were able
to successfully navigate around those issues and get those patents,
which really cover us and protect us out to 2035. And that’s something
that is very, very important as a step towards making some of the
therapeutics a reality. Obviously, in the future, we will talk more
about it. A lot of the foundational work is being done now since it
wasn’t done in the past, and it is being done now. So it’s something
that we are taking those necessary first steps to really make this a
reality, and it will become an increasing focus for us.
With that, I just won’t want to turn it over to Joel to give some of
the financial update and discuss some of the detailed financials from
the K. Joel?
Thank you, Jed. Here are the financial updates for the fourth quarter
and full year 2020. Total net revenue for the fourth quarter 2020 were
$219,000 compared to $119,000 for the same period in 2019. Total net
revenue for the full year 2020 were $914,000 compared to $651,000 for
2019. The increase in revenues were primarily due to increase in revenue
related Small Business Innovation Research grants from the NIH
supporting the Manocept platform, coupled with increased license revenue
from net translational sales in Europe.
R&D expense for the fourth quarter of 2020 was $1.3 million
compared to $1.7 million in the same period 2019. R&D expense for
the full year 2020 was $4.9 million compared to $5.3 million in the same
period 2019. The decreases were primarily due to net decreases in drug
project expenses, including decrease in Manocept therapeutic development
costs, decreased Manocept – and decreased Manocept diagnostics
development costs. The net decreases also included decreased regulatory
consulting and travel expenses, offset by increased employee
SG&A for the fourth quarter of 2020 was $1.7 million compared to
$1.2 million in the same period in 2019. SG&A expenses for the full
year 2020, was $6.7 million compared to $6.3 million in 2019. The net
increase was primarily due to increased legal and professional services,
employee compensation European Medicine Agency fees for Lymphoseek and
franchise taxes offset by decreased travel, depreciation and
amortization, losses on disposals of assets, insurance and Investor
Navidea’s net loss attributable to common stockholders for the fourth
quarter 2020 was $3 million or $0.11 per share compared to $2.8 million
or $0.15 per share for the same period in 2019. Navidea’s net loss
attributable to common stockholders for the full year 2020 was $11.4
million or $0.48 per share compared to $10.9 million or $0.76 per share
for 2019. Navidea ended the fourth quarter of 2020 with $2.7 million in
cash and cash equivalents. Since December 31, 2020, the company received
$7.9 million of cash related to the Series D and Series E preferred
stock funding transactions. To date, the company has received over $14
million of proceeds from the issuance of Series C, Series D and Series E
I will now turn it back over to Jed for closing remarks.
Thank you, Joel. Actually, with that, we will open up the Q&A and
we will let – give a little bit of time to fill the queue. Hillary,
please let us know when the questions are ready.
[Operator Instructions] Our first question comes from Jason McCarthy of Maxim Group. Please state your question.
Hey, guys. Thanks for taking the questions. This is Michael Okunewitch on the line for Jason.
Hello, Michael. How are you?
I am doing well. So, I would like to ask what additional analyses we
should expect to see from the full dataset for NAV3-31? Is this just
going to be a larger set or are there any additional data points in
there? And then for NAV3-32, should we expect to see any interim reads
from that study? And if so, when should we expect those?
Yes. So, this is Mike Rosol. So, good questions. For NAV3-31, for the
– in the main, this will be the complete dataset that we will be
analyzing. We will and we are – we remain diligent in looking for
different ways to look at the data to make sure that we are not missing
something. So, it’s possible that there will be a readout that amplifies
or takes us – gives us something that increases our ability to predict
response earlier. But in the main, what we are doing now is just
analyzing the full dataset, but de-emphasis on the just there because
we’re looking at things, any number of ways at all times. And that will
take some time. It takes – to do these things fully in the correct way,
it takes several months typically. We’re hard at work at it, and we will
continue to be as we go. For NAV3-32, it’s an adaptive study in the
sense that as you heard me mention, we’re looking to enroll patients
with all three different subtypes of RA and what we’re doing is we can’t
predict those in advance. We’re hoping to get a certain number of each
subtype. And once we do that, we will then do an interim analysis to
look at the data, once we have a minimal number of each subtype, and
that number is 4, so 4 subjects with each of the three subtypes. We will
then do an interim look, see how those data look and determine if we
need to go further in the study or if we want to. We might have learned
something that would give us reason to go forward in a positive way. And
we will let you folks know then.
In terms of the time line, it’s interesting. I don’t want to make a
promise I can’t keep, so I won’t. We – right now, the main sites that we
– the site in northwestern that is open and the UK sites that we expect
to open shortly, they would predict and they have predicted maybe a
patient or two a month. We’ve been known to exceed, in concert with our
sites, the enrollment projections that those sites have had. Sometimes,
they won’t meet them, right. So it’s hard to predict. So it will take
some months to get to that number. We will be working with those sites
and the PIs actively to try to get those recruitment numbers high. There
is always kind of a hurdle when you first open a trial to recruit
patients kind of logistics need to be worked out and the site, the local
site staff need to figure things out. And so there is oftentimes a slow
open, but then things will pick up. We will keep you apprised to these,
but it’s going to take some time to get to those 4, 4 and 4 subjects,
but we will do our best to make it happen sooner rather than later.
Thank you, Mike. And then I’d also like to ask if you could talk a
bit more about the Phase 2 in atherosclerotic plaques. How does the
TC-Till fit into this market? In RA, it is a pretty clear path of
monitoring a response, subjective imaging and phenotyping for macrophage
activation, but how would it be applicable to atherosclerosis and when
can we expect to see any data? What will be the next step for
Yes. So, also a great question. So fundamentally, of course, one of
the key components of the atherosclerotic plaque is the macrophage. And
what our previous work and what the data are showing to-date in this
trial are that we – tilmanocept localizes to these atherosclerotic
plaques at least in the areas we have looked at. And it looks like it
localizes more to larger plaques, right. So we are still discussing with
KOLs, what best indications might be, but in a general sense, the one
idea would be that if we can detect plaques that may have more of a
propensity to rupture, right, the so-called vulnerable plaques and maybe
– we then might have a risk predictor, right. And so what might be done
if a cardiologist sees this kind of plaque light up in their patient.
Well, you might use this as a kind of determinant of should the patient
be put on a more aggressive treatment regime or regimen, right. So like
high-dose statins versus not being on statins right or maybe there needs
to be an interventional procedure done to Roto-Rooter out to clear out
the pathway where there is a so-called vulnerable plaque. In terms of
those who would be imaged, we might imagine a kind of a medium-risk
cohort at first, those folks where there may be some evidence already
that they might need to be put on some therapeutic regimen that they’re
not currently, but not just the general screening of the general populus
as a whole. So – and they’re also not high risk already where they’re
already put on a high-dose statin. Still though, even in those patients,
we could possibly bring some value because we might be able to
determine if the high-dose statin is working and/or if there is any
particular area of interest that needs to have an interventional
So broadly speaking, it would be as a biomarker for risk, right, so
risk of a cardiovascular event. And there is a need for those. The field
is littered with molecular imaging agents that have had this potential.
I can tell you that in our clinical as well as in some of the
preclinical work we’re doing, the kind of leader in the molecular
imaging domain is FDG, pet imaging. Our results look to be superior to
that and by a lot. So that’s very promising. But again, we need to think
about this carefully what the indications would be and what patients or
population we would think about screening. But with cardiovascular
events being the number one cause of death, overall we think there is an
opportunity here to bring something to the market that could benefit a
lot of people, but we will be meeting and we have been and we will
continue to meet with KOLs to refine the strategy. We have some next
steps planned. I don’t want to talk all day here on this, but we are
thinking about this I think strategically. Is that a good answer?
Yes. And just when do you expect to see data from Phase 2? It’s – I
know it’s investigator-initiated, so you might not even have that?
Yes. So they have been really great about sharing the data with us.
So we just had a relatively recent – couple of months ago, we had an
update from them. And they are – they actually – I don’t want to reveal
too much of their inner workings, but they expect it to be done by now,
but there were a couple of enrollment issues and they should be done
very soon and they have assured us we are on the shortlist of the first
folks they will share the data with and the first outside of their
actual group. So, we should see results – we will see results, I think
in the next couple of months and there will be ongoing analyses of those
results, of course and as we make any decisions, we will keep you guys
Alright. Thank you very much for taking my questions.
Excellent. Thank you, Michael. Next question?
Our next question is from Vernon Bernardino of H.C. Wainwright. Please state your question.
Thank you and good afternoon guys. Thanks for taking my question. My
question relates to the Type B meeting with the FDA, I know you can’t
give a timeline because it is the FDA, but just wondering because this
is something I have been surveying from all the companies I cover as
well as just talk to in due diligence. And that is what has been your
experience in your interactions so far? I think generally timely, very
quick in replying to questions that could be easily answered or when
they are involved though, are they taking a little bit of more extra
time that you may have experienced in the past? Then I have a follow-up
Yes, great. So, this is Mike Rosol answering. Good question. So, our
experience and our interactions with this particular FDA group, has been
great. They have been very responsive. They actually, thus far, have
held to the timelines for the most part. It was the response, I think in
April of 2019 that came a little later than we thought, but they were
extenuating circumstances, the government shutdown namely that caused
that, I think more than anything. They have been very responsive, very
engaged with us. And so far in this Type B meeting process, they have
exceeded the guidelines in terms of rapidity of response. So we will
see. I think all of that is very promising. Along the lines of what you
have experienced maybe with other groups is we have – I was speaking
with a colleague from another company who said they put in a meeting
request for a face-to-face or a Zoom-style meeting and they were told
this was 2 months ago and they were told we can schedule the meeting in
August. We think we did a – we took a more strategic approach and did a
written response only. And those are usually – you are able to hold to
stricter timelines, because you don’t have to gather a whole bunch of
people in the room – in a room at the same time. And because of COVID,
many of those formal face-to-face meetings have really dragged on and
been put off. So there is a backlog. So our response is going to be in
writing, which we think is the smart way to go given the circumstances.
Terrific. And my follow-up is related, so along those lines
therefore, you don’t have studies, activities related to RA, the NAV
studies dovetailing all in a specific time point. But there are – a lot
of the things are going on in parallel at the same time and somewhere
down the road is that initiation of the Phase 3. If you could provide
any detail as far as any feedback you have received and this is
something they may or may not want to or have provided as far as e-mail
or written is concerned, what has been their feedback regarding how a
lot of these piece parts as far as the clinical trials are concerned are
dovetailing methods into one time point, but in which there is going to
be a lot of pieces that you may need to consider at some point? And I
know you gave the briefing book, but just wondering if you could
describe what’s their mindset?
Sure. So, all of this has been done in alignment with them all along
the way. So, they knew of our plans to run these trials in this fashion
and in this sequence. And remember as well that the NAV3-32 as I said,
isn’t part of the critical path, but it is critical we think for
development in RA and will provide a great enhancement, as Jed put it,
to the commercial product that physicians, rheumatologists, in
particular are really excited about. But back to the FDA, we have been
in alignment with them. And in fact, in the design of the – I mentioned
this before, the design of the Phase 3, we have taken their comments to
heart and crafted the primary objectives, essentially exactly the way
they suggested we might. So, I think we are in a good place with them.
They have understood our path and our strategic way of approaching this
and the fact that we will, at any one time, might have a few plates in
the air, but we are working our best to make sure those land at the same
time or their cost at the same time and we can do this in a smart, but
expeditious fashion. So we have been in tandem with them is the short
version of all of that.
Terrific. Yes, it sounds like you got a lot of things in place and
that you have – the approach you have taken or the strategy you have
taken seems to be, for the most part, low maintenance. You just need to
hear their feedback and then step on the gas again. Thanks for taking my
You are welcome.
Thank you, Vernon. Thank you. Appreciate it. Next question?
Our next question is from shareholder, Jacob [indiscernible].
Yes, hi. So first of all, I have been a very patient investor here
for a long time with Navidea. Last year at this time, there was a clear
mention that Mastiff, a group was going to be planning on buying – they
were guaranteed to be buying 1 million shares at $5 a share. From
looking at the balance sheet, it seems pretty darn clear that didn’t
happen. Can you explain this, please?
We entered an agreement with them in August of 2020 and they
guaranteed a funding of $5 million at $5 a share. And to-date, they have
not funded, no.
Is there any plans to do anything about that? I know it’s hard to go
after a hedge fund or anything like that, you probably don’t want to,
but is there any plans or we just let that slide?
We are currently in discussions with the Board as to what our options
are in terms of dealing with them and they have acknowledged that they
are still obligated to provide that $5 million and have said that they
intend to fund at some point in time. So we are still in discussions
with them and the Board to evaluate our options with – in relation to
the Mastiff funding.
Okay. Secondly, I think it was about this time last year that we
entered the agreement with Jubilant. It might have been August I might
be mixed up on my time schedule here, when did we first signed the MOI
or when did Jubilant first signed the MOI with us?
The MOU was signed in – the MOU was signed in August 25, 2020.
We have been waiting for that, because it was at the time discussed
as being imminent, the partnership. How much longer do you think we
should be patient as owners of Navidea, as shareholders of Navidea
before we expect some sort of either sign or don’t sign final agreement?
We continued our discussions with them. I think the discussions have
been fruitful. I think from our side as a company, we are comfortable to
see more data from the trials. As I said in my remarks, I think that as
we generate data from 3-32, that will allow us to increase what we
could expect in any final signing of the deal with Jubilant as we
continue the discussions. I think that it’s important that as we
generate more data, we firmly believe here at the company and I think
Jubilant actually agrees with us that the product increases in value.
The biopsy data from 3-32 will set a bar. As I discussed in remarks that
will establish what we feel is an enhancement to the initial label,
which would allow an immediate diversion from the standard of care,
which is the anti-TNF and potentially allow for doctors to move from
that Tier 1, which the insurance companies don’t like to do. But if we
prove within what we have seen in the arm 3 of the Phase 2b as well as
what we hope to see in 3-32 that there is a certain percentage of the
population where a greater than 80% plus part of the time, the anti-TNFs
just won’t work if they have a particular phenotype, then that gives us
a very potent weapon as part of the label. That also makes it a very
convincing argument to start using our imaging agent right away, if we
know that we can eliminate say 35% to 40% of the population from using
an anti-TNF for any period of time [Technical Difficulty] has come with a
lot of side effects, and they don’t work all the time. And if we have –
and we have seen this in the arm 3 and this is something to lead back
to the question that Michael had asked earlier, we see that there is a
population, and it’s a big portion of the population that just won’t
respond to anti-TNFs and once we get that data from 3-32, I think that
that’s going to be something that is very key into the completion of the
final deal with Jubilant, which should also lead to some increased
consideration as well.
Okay. And then one last thing, we talked about funding last year and
that we had enough funding to get us through, I believe the Phase 3
trials. Do you still feel it that way with where we stand right now with
our cash balance?
Yes. We are getting the money from Mr. Scott. As you pointed out,
Mastiff has made a commitment and to-date has not funded. We got terms
that we thought were attractive – were very attractive from Mr. Scott,
especially given that he is a continuing and supportive shareholder. He
is limited. He obviously can’t go above 33% ownership. So, there are
those restrictions in his ability to covert on the Series E preferred
that he subscribed to, but he did fund that upfront. So that money is
there. Keystone continues to fund and so from taking into consideration
the funding from both of those sources, whether we get the Mastiff money
or not, our Phase 3 trial is fully funded.
Alright. That’s it from me for now.
Thank you, Jacob. I appreciate it. Thank you. Next question?
Our next question is from Mike [indiscernible]. Please state your question.
[indiscernible], we finally got it right last time, [indiscernible].
We are getting there. I do appreciate it. Thanks for taking my
questions. As you know, I will have several of them, so I appreciate it.
Thank you. More on to what I believe Jacob just asked on the funding,
so do you still believe that we have funding for the full 2 years as you
stated last conference call, Jed?
I think that we have a very good runway from here that should allow for a completion of substantially all of the Phase 3, yes.
Okay. And on the – so is the Keystone on track then to finish their conversion funding by the end of May?
They have until the beginning of June to do that. And we have had discussions with them and yes, they are.
Okay. And so just my comment, it looks like they still need to fund
some place between $5 million to $10 million. So anyway, I don’t know if
that’s correct or not, but it’s just my observation. Is there a
milestone payment from Cardinal for the North America rights in reach?
We continue to hear the number of imaging they have been doing. Is there
a milestone payment in reach or not, can you share that?
So, I have not gotten the last year’s data. I mean we got...
I mean, so we should get it on June 30, the data for the full year. I
mean, it’s a possibility. Prior to COVID, we had seen renewed growth in
Lymphoseek. And so there is a possibility that down the road, there
could be that milestone payment and once it passes $100 million a year
Right, okay. Alright. So there is something – there is a possibility, but not a probability. Is that fair?
Yes, I believe so down the road. I mean, there are some other things
that we potentially have. I mean, obviously somebody might have noticed
in the press release that we made an – that there was something about
4694 expenses. Interesting to note, the reason why we said in the press
release that the expenses increased, they actually did increase. In
2019, they actually were negative, because we were able to realize some
gains against it and they were zero for 2020. So on accounting basis,
from a negative to a zero is actually an increase, but given that there
are two treatments out there that do target the beta amyloid, whether or
not they work or not, there is always that possibility that we will
have a $1 million milestone coming from Meilleur at some point in time. I
think that as those treatments get more play in the news, I am not
going to comment on what I think about the Biogen versus the new Lilly,
the path forward, but there is always that potential that without
spending any money, we could see $1 million payment from them. And there
are actually also a couple of other opportunities to get some
milestones on 5001, which we have actually taken in a little bit of
money on that. That is something that we still hold the database on.
That product has actually been moving forward with an undisclosed
partner. And if that does get approved and we think that it might get
approved as an imaging agent, we could see $1 million approval milestone
from them. That is something that we actually signed a contract on to
have. So, that’s something that, that could happen in the future. I
don’t know the timing. It really depends on this company getting the
approval. And then after that, if it actually makes the market, we could
receive up to an additional $2 million in sales milestones over the
next several years once the product starts selling.
In addition to that, in the press release, you mentioned the new grant can you give us more details on that?
No. I mean, we just thought that was the Gallium grants at...
That was the Gallium.
Yes, yes, the Gallium grants that we have been working on. I mean we
do think that there is value there and we hope to really get some very
good data from that, which we can then use. I mean I think as you know,
we have been – there are lot of other things we are working on that we
haven’t discussed. I mean, I think it’s important that we continue to
move the ball forward in many different areas and we will discuss those
areas when we feel there is something really to talk about. I really do
want to stress that I am not going to be talking about things that are
really not fully baked. I mean I think that’s a mistake that had
happened in the past. I don’t want to revisit those mistakes that have
happened in the past when other individuals spoke about potential
things, but I assure you, we are moving forward in a lot of different
areas. And as soon as we have something tangible that we can actually
really talk about we will be talking about that. That’s why we waited a
lot to talk about OSU. I mean, the OSU negotiations were going on for 2
years to finalize those patents. And we didn’t really discuss it or even
mention it until it actually happened, because I want to try to avoid
sending any unrealistic expectations, but I am excited. Like I said,
5001 is something we sort of kept in our back pocket. We did take in
$200,000 in revenues on that. And I do expect with the backing of this
big partner in conjunction with the new partner that has it, they do
think that they can get it across the finish line. And if they do get it
approved, then that will be $1 million that we have never counted on. I
am still not counting that in the budget, but if it does get approved,
that will be something nice to have.
Okay. On Jubilant, a couple more questions on the Jubilant deal, did
due diligence get extended? There has been a lot of discussion on that.
Given what’s going on with COVID and the fact that we have just not
been able to meet face-to-face and all of our discussions have been
through Zoom and we have had many and we continue to have many. We have
agreed on both sides to continue the dialogue. I think that in exchange
for that agreement. We are very much pushing for a rework of what we
think will be the upfront and it’s a rework in a positive manner,
because as more data is generated, the product generates more value. So,
in order to increase and continue the due diligence time, we had to
make sure that any increased negotiations due to the COVID delays would
net potentially more money for the company. And so that has something
that we have agreement on both sides, so as we continue these
negotiations and the due diligence and coupled with the data we hope to
generate with 3-32, we feel that if we decide to go forward and sign the
final agreement, we think that the shareholders hopefully will be
happier with what would be an increased upfront versus what we had
announced in August.
Well, that’s an excellent piece of information. Did Jubilant – in
their due diligence, did they find some excitement in the molecule
itself or can you share that?
I mean, it’s hard for me to comment on what Jubilant – on what they
thought or didn’t think. I think that – and I choose my words carefully,
I think that they were very excited about the predictive power of the
molecule in the arm 3 based on one of our theories. And our theory,
which is really a linchpin, as I discussed earlier, for what we are
working on for a part of the usefulness of the molecule will be backed
up by 3-32. And when that happens not if, but when that happens, we feel
that, that is going to unlock an increased amount of value. But the key
is as we have always talked about in the past, even when we were
discussing the NASH stuff, biopsy is the best way to look at things, but
biopsy is just something you are never going to do. And so looking at
the biopsy that we are going to do on 3-32, which are completely
elective and I want to thank in advance the patients that sign up for
it. I know that we are looking at and we are actively recruiting. So I
want to thank those patients in advance when they step up to do that,
because it will really give us an amount of data that we think is going
to establish a baseline for whether or not a patient is going to get an
anti-TNF right off the bat. And for anybody – and listen, I come from
this from experience as I’ve never made any secret about I suffer from
Crohn’s. I’ve gone through a lot of different medicines over a lot of
different times. Thankfully, as a Crohn’s patient, I have the ability to
get a colonoscopy. It’s not the most pleasant thing in the world. But
certainly, for anybody over 50 out there, I do encourage you to get
But for me, the only way I can get my insurance to pay for my
medicine is if I go for a yearly colonoscopy. And the insurance company
is very, very strict. It’s actually funny prior to this call, the
insurance company actually just called me to get the colonoscopy results
that I just had a month ago because they had not seen it, or else, they
won’t approve the medicine. But with an RA patient, you don’t have that
benefit. And the insurance companies say, treatment number one is
anti-TNF. And the anti-TNF doesn’t work a lot of times. Way back when,
when we started this whole process, Dr. Cope, Dr. Goldberg, we all said
the exact same thing. It is the largest product in the world, and it
doesn’t work 50% of the time. We actually now have a molecule that we
feel that with a certain phenotype, we can spot that early. And the 3-32
will confirm that, and that will create a lot of value because we can
then go to the insurance company and say, listen, we’ve done a full
Phase 3 trial. We know that 35% to 40% of the time, patients with this
phenotype will not respond 80% or greater of the time to anti-TNF, why
bother putting them on it when there is so many other choices. And we
think that will be compelling, and that is really what we’re hoping to
do with the 3-32 trial as well as the full Phase 3 trial and also don’t –
not minimize the effect of the 3-35 trial that we’re going to launch,
where we’re going to get more and more of the normals, so that when we
do launch the product, we really can hit the ground running with a very
fulsome database that will allow the AI really to take over. We’re not
going to cut out the people reading it. We want people to look at it,
but we’re going to make sure that the artificial intelligence, the AI
portion and the algorithm portion really works and is really honed for
when we’re ready to launch. And we’re in active discussions with several
different groups working on that, working through the data. And this
3-35 trial will give us a larger database of images that will really
help make that AI work faster and faster. Similar to the example that I
gave years ago when talking about Alexa, when Alexa – Amazon’s Alexa
first started, it really wasn’t very good because they just didn’t have a
big body of questions being asked to it. But now it’s fantastic, and
everybody has one in every house, and everybody uses it everyday. We
want our product to be used a lot right away. And so by doing 3-35, we
will be increasing that database, and we’ll have more and more images
that we can use as reference points to really make sure that we can get
the doctors to diagnose it, get the doctors to prescribe it, use it to
diagnose and really move through the process, that flow diagram that we
put together that it’s on our website. We really want that to be as
quick as possible.
And how many sites have been contracted to start in the RA P3? You
said it will take some point between 25 to 50 sites. Have you actually
firmly contracted sites and if so, how many?
No. We’re in the process of doing that. This is Mike. It will be 25
to up to 50. As you said, we are on the works. You’re actually right.
Jed gestured right next to us here in the Board. The conference room is a
giant, and our whiteboard is the list of the sites. So we’re in the
process with all of those to get them ready to go. And as heard me
mentioned several times, some of the key sites from our currently
running trial that have recruited especially in arm 3 are anxious to be
sites for the Phase 3. And so likely, those – they have a running start,
and likely, those will be the first ones that we open up. So we are
preparing to open up as quickly as possible. We don’t have contracts
specifically signed for that yet. It’s part of a – there is – the reason
for that is because that’s the way it’s done, right? So we need to
finalize protocol, IRB approval, all sorts of things before you then
move to that stage. And all of that is happening behind the scenes. And
once the FDA gives us their feedback will hit go as soon as possible.
Well, how many sites have tentatively agreed? Are you over the 25 with tentative agreements?
Yes. So we have 50 who are interested, yes.
Okay. So, that’s important. Now with what you are talking to the FDA
about your preliminary package, are you still looking at a 12-month
trial around that?
Yes. We have mapped out a number of different scenarios depending on
how many sites we can open and looking at our average recruitment rate
from our currently – the trial that just completed, as you’ve heard me
mention before, in that trial, we actually enrolled at a more rapid rate
than the typical Phase 2 or Phase 3 study in North America for
rheumatoid arthritis, which I think is a great testament to the hard
workers in the clinical team as well as me aside as well as in the sites
themselves. So there is a 6-month follow-up for these patients in this
study, right, because as you know, the standard of care is to put a
patient on an anti-TNF alpha and then bring them back 3 to 6 months
later, to do clinical assessments. For our predictive capacity, we
really need to target the 6-month time point as well as the 3-month, and
that’s, again, in agreement with the FDA. And so there is that tail,
right. So our goal will be to recruit as many subjects as rapidly as
possible in order to make the trial run as efficiently but also as short
as possible, right? So I don’t want to promise a year. It depends on
how many sites we can open and what the recruitment rate is, but we are
going to do our level best to make it as short as possible. And we have a
track record showing that we do a really good job of that.
My last question is more on the scientific side. So, on your two last
patent applications, the one on method for altering the macrophage
phenotype and then the other one was the more recent one in February on
the ablation of the M2 macrophages. In there, in those two patent
applications, it was indicating that three human blood samples were
taken to run some of the tests. Can you share any more on what those
three human blood samples were and what actually transpired on those
Yes. No, these are samples that are available from – in working with
our contract research organization, collaborators or companies that we
contract with, who are expert at some of these in vitro assays. What you
can do is you can get these samples and take out the macrophages and
then grow them up and culture the way – so that you can then perform
tests on those macrophages derived directly from human subjects. Now we
haven’t done those just from the work we’ve done with contract research
orgs. I just want to elaborate on that a little bit. We also did this
work in collaboration with UCSF on separate samples. So now we’ve
actually taken data from more than three, at least six. And actually, at
this point, I think it’s nine different human subjects taking their
macrophages out from the peripheral blood, growing them up in culture
and shown that we can flip the phenotype or drive the phenotype to
different types of macrophages, depending on what kind of construct that
we’ve generated, we pour on top of them, right. So the two patents
you’ve mentioned are, we refer to them internally as flip the TAMs or
flip the tumor-associated macrophages to – and by that, I mean the
phenotype flipping; and then kill the TAMs, and that is to ablate them.
And we’ve shown in vitro as well as in vivo in tumor models in rodents
that we can change the phenotype to a more pro-inflammatory state to
enable the body’s own immune system to attack tumors as well as
therapeutics that we approve therapeutics that we introduce. And we can
also kill those as well if we want to. But the main – we think the main
benefit is from the flipping them, driving their phenotype to a
pro-inflammatory state. But basically, the short version of my answer is
that these are samples from humans, not specific with – to oncology
cases. We’ve taken their blood. You can isolate their macrophages grow
them up in vitro and then do things to them to see if you can moderate
them in different ways. In parallel, we’ve done these tumor models in
different rodents, different tumors and shown that those in vitro
results can be replicated in vivo and that they also have an impact on
the tumor growth.
So is that the myeloid-derived suppressor cells impact?
Yes. Yes. So we saw that, and that’s a really cool finding. So it
turns out that in order for cancers to – many cancers to grow and
metastasize, there are a group of cells called the myeloid-derived
suppressor cells that seem to play an important role in that, and I
won’t get into the literature there too much. But it turns out that
those myeloid-derived suppressor cells are one very important
subtype-expressed CD206. And we actually can impact those, and we’ve
been shown to reduce them by about a half. And we think that we’ll have
implications for reducing the possibility of certain cancers to
metastasize. So that was kind of an added bonus, if you will, of our
therapeutic constructs. And we’ve shown that in vivo, indeed, we reduced
the numbers of those myeloid-derived suppressor cells by about a half.
And long-term, we think that’s going to be very important.
Well, from a layman’s observation, that’s kind of a by-targeting,
isn’t it? Because you’re targeting the tumor microenvironment or the
TAMs and you’re changing those. And then also at the same time, you’re
seeing an impact to the cancer cell itself. I call that a by-targeting, I
guess, but how would you phrase that?
Yes. Well, well, to be clear, we’re not targeting the cancer cells
directly, although there might be indirect effects from the whatever
payload we are bringing. But the primary action of our construct is on
the TAMs, as you mentioned, the tumor-associated macrophages getting rid
of that so-called force field that my predecessor here had referred to
it as and others as well in the field. So we kind of eliminate that
force field and actually ramp up the body’s immune system to enable it
to attack the tumor as well as increase the efficacy of other
therapeutics that have been prevented from reaching the target by that
so-called force field. The myeloid-derived suppressor cells themselves
aren’t the cancer cells. But they support the cancer growth as well as
metastases. And we do target those, and that is a direct targeting. And
we are ablating those or at least reducing their numbers. I say that
because there may be different reasons that’s happening, but we’re
reducing those numbers. In that sense, if you’re referring to those as
cancer cells, they are really cancer-support cells. We are indeed
targeting those and having a direct activity.
Okay. The last comment that I have, there was a Tuskegee University
study in the NCI and the NCATS also participated in it in middle of
2020. And they clearly identified the CD2 macrophage as probably the
ancient entry point into the body, the MR – the CD the ancient entry
point in the body for the original bacterias and viruses. So however we,
Navidea, got to this point that seems like an exciting observation as
part of a tool to educate people on the potential here, particularly as
these preclinical evolve. Was that fair or not?
Yes. No, that’s fair. I actually saw that article that you
referenced. And indeed, I mean, this is an ancient system that evolved
in order to – for the body to fight off the invasion of different
attacking agents. And it’s been co-opted and used by the body’s immune
system for many different purposes. And the fact that we target it and
it plays such a crucial role in so many different disease processes is a
great advantage of our molecule, and it gives us the ability to
possibly impact a really great variety of diseases, both from a
diagnostic perspective as well as therapeutic. So, absolutely, yes that
was a good find, yes.
Yes, the point on that is our CD206 MR’s evolved over the last 10
years. It looks like an opportunistic target, that the market hasn’t
recognized yet. And I think that’s a fair statement. The market just
hasn’t given any credit to it.
Yes, you’re right. This molecule was ahead of its time in many ways.
And now the world is waking up to it. And the scientific literature is
growing that that marker and these macrophages play a role in so many
diseases in a fundamental way that again, this is an exciting time for
the technology and the company, all else aside for the reasons that you
are mentioning. So I agree.
I’d like to finish by thanking the Board and Jed and everybody for
getting the financial position of this company back. It’s been a long
time. Many years since the balance sheet has had cash on it and of this
sufficient amount. So, thank you for strengthening the balance sheet and
keeping the company liquid. And lastly, I would like to thank you for
all the fights you did for – to get back MT to the shareholders and the
rights to that science. That’s a big success that I don’t think much
credit is given for. So thank you for getting back to that therapeutics
right. It was a good win. That’s all I had.
Thank you, Michael. I appreciate that. So I guess move on we to any other question?
Yes. Our next question is from Michael Lowe. Please state your question.
Yes. Hi, I appreciate that. I have an overarching comment and then a
couple of quick questions, all of which derived from that comment. And
the comment seems to – the comment is that, in my opinion, it seems like
for whatever reason, which I can’t, frankly, figure out, there seems to
be a strong reluctance on the part of the company to make disclosures
that are positive and that might do things to increase the stock price
of the company in no particular order. For example, I noticed in the
press release, and Joel reiterated this on his comments that since
December 31, 2020, the company has received $7.9 million of cash. So I
saw the press release that Mr. Scott invested $5 million. Could you guys
please explain to us where the incremental $2.9 million came from and
the price per share, etcetera, and the timing of that investment?
That’s the continuing funding from Keystone on the Series D preferred. And that...
So why was – I got to believe that $2.9 million to a company of
Navidea’s current financial status is a material amount. Why was that
not disclosed or did I just missed that press release?
We disclosed that in August when they signed the agreement that they
would be funding $15 million at an average price of $2.915 per share.
Wasn’t there a floor of $5?
No. It was – this is the Keystone Series D preferred that was
disclosed in August, I believe, was when we signing the agreement, and
the funding is for a 9-month $15 million guaranteed funding with a floor
price of $2.915.
So what – so we’ve had some off-line conversations about the – one of
the press releases back then about the $5 million – I’m sorry, the $5
per share floor in the $5.75 or whatever cap, what was that in relation
That was the Mastiff funding.
Are Keystone and Mastiff not affiliates?
They have signed a document that they are not affiliated. Mastiff is
run by an individual named Dan Weinstein, and Keystone, the portfolio
manager is somebody Fred Zaino.
Okay. So they are not affiliated entities in any way?
They have signed agreements disclosing that they are not affiliates.
Okay. A couple of minutes ago in response to one of the questions,
you made a comment that the Jubilant due diligence is ongoing and has
been slowed down a little bit by COVID. The MOU was signed in August,
right, 2020, so we were smack in the middle of COVID. There the Jubilant
press release says they made a $1 million equity investment in exchange
for a limited exclusivity period. Obviously, limited is in the minds of
the beholder, but we’re not going on 7 months here. And to my
knowledge, the company has not disclosed what that exclusivity period is
to the extent that results keep coming in and are positive. I would –
it seems to me they are getting basically a free look, right?
They are not getting a free look. So as more data is generated, the cost of them goes up.
So if we decide to sign an agreement, a final agreement on it, the
cost would increase based on the amount of data that is generated by the
But the MOU has been described as binding. Is that binding from start
to finish? Or only certain provisions of that MOU binding, like cost
and expenses and exclusivity and certain other terms?
There are certain provisions that are binding and certain that are not. Yes.
Okay. With respect to the IP, and I think it’s terrific to hear about
some of the progress that the company has made, and I think we might
have also had a off-line discussion about this. But I think in one of
your fireside chats previously and one of the prerecorded videos, there
was mention of some press releases relating to patents. And I
understand, obviously, I understand the reluctance of the company to
discuss these prior to filings with the USPTO, etcetera. But it seems to
me that once filings have been made and/or granted the company is
protected. Why are disclosures not made regarding these?
We made – we actually did do a press release on OSU to discuss the IP
and the filings of that. So that was press released, and it’s been
discussed on multiple presentations since then.
Well, I have asked you and Joel in e-mails for copies of those and
you said, there were no press releases. You couldn’t point me to any,
but okay. And I guess my last question is, I think it was last week,
possibly 2 weeks ago. Mr. Scott filed another amendment, I don’t know,
3-45 to his 13D about a scheduled conference call. Has that conference
call happened? If not, when is it scheduled for? And if it has happened,
can you please disclose what if anything was discussed there to the
extent that it’s not MNPI?
We had a conference call with Mr. Scott, and we’re just discussing –
he’s made suggestions, and we’ve had some open dialogue, but that
conference call has taken place. I would say that nothing material was
discussed on the call.
When you say suggestion, are you free to discuss what those suggestions were?
Okay. I tried. Thank you.
Thank you. Okay, thank you. Next question?
Our final question comes from Edward English. Please state your question.
Hello Jed, this is Eddie English. Thank you for taking my questions. I
have about three or four, if you would indulge me. I think you probably
have some insights into what these are. My first question is around the
marketing of the RA product. If we assume next year, we’ll have an
approved product. I’m interested to know how you will be marketing that
to the rheumatologists to the RA patients. Will you be using or planning
to use TV advertising like other pharmaceutical companies do to sell
their RA drugs? And lastly, informing the insurance companies of the
benefits of this product from their perspective. Can you shed some color
or details around those strategies?
Edward, that’s actually an excellent question, and that’s something
that I think that people have like – have missed repeatedly,
unfortunately, with this company that we – when we signed an agreement
years ago, and I really – I don’t like to dwell in the past, so I’m not
going to. I’m going to say briefly, we signed an agreement with a great
partner in Cardinal. Although we find an agreement that didn’t really
require any of that, and you really hit the nail on the head. This is a
product that we feel strongly will do very well. But it will need to be
marketed, and it will need to be pushed. And that’s why in our
discussions, that’s one of the things that we really worked on with
Jubilant. There is a minimum spend involved in terms of a marketing
budget, which will be – which once the agreement is finally signed, when
we decide to proceed with that will be extensive, will include a lot of
marketing dollars. I can’t guarantee TV advertising. That will be their
discussion, but we are going to be guaranteed minimum spend per year on
a rollout, and that’s something that is really, really key for the
product. Doing a deal for a diagnostic like this isn’t just, okay, how
much money you’re going to give us upfront. There is so many different
parts of it. There are so many different things to it. And marketing is a
very big part of it. That was part of our discussions. That continues
to be part of our discussions. And that’s something that, yes, there
will be, in conjunction with a partner, very heavy marketing spend. And
we looked at some of the other products in the market for diagnostics.
Since this will be the first of its kind. We didn’t really have direct
comps, but we looked at a spending level, and it’s going to be tens of
millions of dollars that will be spent by our partner on the marketing.
And we need to make sure that it’s money that’s spent, that they spend
it, that it’s part and parcel of the agreement. That’s something that we
didn’t have in the past with Lymphoseek in either Europe or the U.S.
And those are things that we are making sure that are included in any
agreement that we do now. And that’s actually also part of the diligence
because as you’re going through the discussions with rheumatologists,
the KOL panels, you have to set a bar and figure out what needs to be
spent, how much should be spent and how it should be spent. And so your
question was really fantastic, and there will be a significant spend,
but that will be targeted and will be included in any agreement that we
make. And that will be spent by a partner that we bring into the fold.
Okay, thanks. Thanks for that. The second question is around revenue
projections. I’m wondering if you plan to start giving us any more
detail in advance around your revenue projections, considering that we
have a new emphasis on tilmanocept in Europe for revenue of 2021. And
then perhaps any details you can give us or estimates you can give us on
a breakeven considering the possible revenue from the RA product in
Well, we would expect revenue from the RA product in 2023, probably.
And so I would say, as we get further along into the Phase 3, and we get
a very good sense of when we can expect the last patient, last visit,
we can start really start going through the revenue projections. And
once again, that would also be something that would be done in
conjunction with our partner. We will get to that point, but I still
think we’re at least a year away from that before we can start talking
about those projections. But we have looked at some third party. There
have been third-party consultants hired by our potential partner that
have gone through some of the revenue projections. They seem consistent
with what we projected, which is we feel as an initial label, up to $500
million product; and with an expanded label, over $1 billion a year in
revenue. But once again, those are things that will take time. So I
would expect that the ramp-up will be similar to what you see with other
diagnostic products. So you’re not going to – it’s not going to be – I
said originally, a few years ago, I try to compare it to what you see
with a therapeutic where you had Sovaldi and Harvoni, which was a
product to cure hepatitis went from zero to $8 billion in one year. You
don’t see that with a diagnostic. I think with us, you’ll see a nice
increase, a nice ramp-up over time. The good thing about our product is
we feel that its utility is going to create lifetime value patients. So
unlike Lymphoseek, where we want to only see the patient once, we want
to hope that we find the sentinel lymph nodes. They do the biopsy. Their
cancer is cured. And hopefully, they live long, healthy lives, and we
never have to see them again. With RA, unfortunately, since there is no
cure, each patient we bring in is a patient we’re going to have for
life, similar to – that’s why Humira is a $20 billion product. Because
it doesn’t cure anything, it just hopefully puts patients in remission.
And our diagnostic agent will monitor these patients to make sure that
they are on the right care. So as the sort of – as it builds, you get
one patient and then you have them for life, then two, so on and so
forth. So the revenues build upon themselves. But that’s something that
we will really start fine-tuning and start disclosing more and more of
as we get further along into the Phase 3, but I would not expect any
revenues until 2023.
One added comment, this is Mike Rosol. So of course, on the clinical
side, what we’ll be doing along the way is as we will be publishing and
getting a word out to meetings or at meetings where rheumatologists
congregate. So there will be a growing awareness, and that onus is on
us, of course, to disseminate these – the results that we’ve achieved so
far as well as the ones that we predict we will achieve going forward.
So there’ll be – we’ll be playing a role in the educational process of
the rheumatologists as well as the new med docs, by the way, who are
also excited in general to have another tool that they can use in their
toolkit. So we will be doing that as well. So, back to you, Jed.
Okay, thank you. You said you had another question, Edward?
Excellent. Yes. Actually, I have two more, and I’ll try to wrap this up pretty quick.
Yes. No problem.
I am interested in maybe Dr. Rosol will want to comment on this, but
I’m interested on any more detail you can give us on the work you were
doing with IMV. There was a collaboration announced some time ago with
them. And I am wondering what can you share with us about that?
Yes, great question. So we on – they actually essentially shut down
all research activities due to COVID for a very long time. And then when
they opened up, they opened up and focused solely, it seems on COVID.
And so we have been this isn’t – I’m not disparaging them in any way.
I’m giving the facts. So we’ve been checking in with them every couple
of months saying, what’s the time, what’s the horizon look like? And
just recently, we did this yet again, and we should be proceeding, knock
on wood, with our first preclinical studies with them, where we’ll be
evaluating our construct in concert with their so-called cancer vaccine.
Although I think, actually, they themselves don’t like that terminology
anymore, although they were using it. So anyway, we should start
studies in the next several months with them preclinical, finally. But
really, we’ve been ready and waiting in the wings and anxious to get
going with them. But we – of course, we haven’t been sitting on our
hands. And so, we have been doing our own studies with different
therapeutics, as I mentioned, looking at tumor models ourselves, to show
that our drug can work synergistically with already approved compounds
to reduce tumor burden.
Excellent. Thank you. My last question is with the WorldCare Clinical
agreement regarding the imaging workflow for RA, I was curious has that
agreement been finalized. And are you using WorldCare with the existing
RA studies? And will they be a part of the upcoming Phase 3 studies?
And so they will be prepared to hit the ground running if and when the
product is approved.
Yes. So we’re working with WorldCare on our NAV3-32 trial as well as
on the normative database trial, they will be working with us as well as
on the Phase 3. And we’re preparing with them behind the scenes to have
them be ready for all of those and to be ready for the longer term play
if and when we finalize that for the commercial product. And that we’re
evaluating still, internally, for – because there are a number of
options we might pursue, but we are working with them on the upcoming
trials. And we are very excited about it. And they have great expertise
in imaging in general as well as in nuclear medicine research, and I
think it’s a good relationship.
Excellent. That’s all I have. Just close to say thank you Jeb to the
entire team. You have done a lot of good work in the last year or so.
Thank you very much.
Thank you, Edward. I really appreciate it. With that, I apologize, we
have gone a little bit over time, but we are always available for
questions. As Michael pointed out, I mean you’re always welcome to call
or e-mail and we will be there to answer any questions that you might
have. So I just want to close the call, say thank you everybody for
being shareholders. I look forward to hopefully some announcements in
the near future on the FDA and some of the trials and some other stuff
in the future. Thank you so much.
This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.