Analyst Conference Summary

Opexa Therapeutics

conference date: August 12, 2015 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2015 (second quarter 2015)

Forward-looking statements

Overview: This clinical-stage development company has been vetted by a $3 million payment from Merck Serono for its potential multiple sclerosis therapy Tcelna, which has also been given Fast Track designation by the FDA. But revenue from product sales is years away.

Basic data (GAAP):

Revenue was $0.7 million, up sequentially from $0.4 million, and up from $0.3 million year earlier.

Net loss was $3.5 million, down sequentially from $3.4 million, but up from $4.2 million year-earlier.

Diluted EPS were negative $0.07, up sequentially from negative $0.12, and up from negative $0.15 per share year-earlier.



Conference Highlights:

In the quarter Opexa raised $13.8 million gross, $12 million net, by selling about 25 million units consisting of a share of common stock and a warrant to buy an additional share.

In March Opexa received a $3 million payment from Merck Serono as part of an amendment to the existing option and license agreement for Tcelna for multiple sclerosis (MS). This was to provide further support for the Abili-T trial. Merck has an option to license global rights, except Japan, at which point they would pay a $25 million milestone and would pay for the Phase 3 trial. Total milestones could total $220 million. If commercialized royalty payments would be between 8% and 15%.

As of today, all patients (190) were enrolled in Abili-T and about 86% of patient visits had been completed. Most are now in their second year of treatment. The independent Data and Safety Monitoring Board towards the end of April recommended that the trial should continue. The FDA granted Fast Track status to Tcelna for SPMS (secondary progressive MS).

An IND submission to the FDA for permission to begin a clinical trial of OPX-212 for NMO (neuromyelitis optica) is expected by the end of 2015.

Research and development expense was $2.8 million. General and administrative expense $1.3 million. Depreciation and amortization was $0.1 million. Leading to a GAAP operating loss of $3.5 million. Interest and other expense was negligible.

Cash and equivalents ended at $18.3 million, up sequentially from $9.6 million. Operating cash burn was $3.3 million. Current liabilities were $5.0 million.

Opexa believes its cash should last into Q4 2016. by then the top line results from the Phase 2b Tcelna multiple sclerosis trial should be available.


OPX-212 items needed to file? We had a pre-IND meeting with the FDA, and with key science opinion leaders. The activities include bioactivity studies in a mouse model, process development and manufacturing runs, and of course paperwork.

What type of treatments are available for NMO? There are no approved treatments, so we typically see off-label use of B-cell therapies like rituximab and Soliris. It is an antibody dependent mechanism, with secondary demyelination of neurons. There are therapies in clinical trials, but they target B cells, while our therapy targets T cells.

The NMO Phase 1 study would likely be a small trial, possibly open label, at 2 or three doses.

Meaning of 86% of patient visits completed? The data would be unblinded in the second half of next year. A lot is based on scheduling patients for follow up treatments, and their compliance. It is a two-year study, with two courses of 5 doses. The last patient and last dose should come in the first half of 2016, but it takes time to analyze the data before it is released.

We have been sharing certain immune monitoring and biomarker data with Merck Serono. We will evaluate the data together, and they get to decide whether to go straight to Phase 3. We also do MRIs on patients every 6 months. The primary endpoint is brain atrophy, and the main secondary one is disease progression.

Cash burn and 2015 R&D expense? As the trial progresses, the expense is lower this year because they are enrolled, not new, patients. Manufacturing of the last patient doses is near completion. So the peak of the burn is behind us. But if we start the NMO trial, that would increase the burn, although it will be a small trial.

NMO partnering strategy? Merck is certainly aware of what we are doing. Other MS companies are aware of the NMO plans. We are not desperate to partner. We have been encouraged by the interactions we have been having with pharma companies. There are not many companies developing T-cell immune therapies for autoimmune diseases like Opexa. We have talked with companies about other diseases besides NMO.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice.

Copyright 2015 William P. Meyers