Analyst Conference Summary

Opexa Therapeutics

conference date: May 12, 2016 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2016 (Q1, first quarter 2016)

Forward-looking statements

Overview: This is a clinical-stage development company has as its most advanced product a potential multiple sclerosis therapy, Tcelna.

Basic data (GAAP):

Revenue was $726 thousand, up from $377 thousand year-earlier.

Net loss was $2.2 million, improved from $3.4 million year-earlier.

Diluted EPS for 2015 were negative $0.31, up from negative $0.95 per share year-earlier.


Believes has cash to last at least until top line results of the Abili-T trial are announced.

Conference Highlights:

Believes topline Tclena data should be in before the end of 2016.

Aim is to restore the function of the immune system in patients with auto-immune diseases.

The Phase 2b clinical trial of Tcelna® (imilecleucel-T) in secondary progressive multiple sclerosis (SPMS) (Abili-T trial) continued to advance towards completion. Top line data is expected in early fourth quarter of 2016. The final dose was administered to the last patient in the last week of February 2016 and approximately 98% of all patient visits have now been completed. In February 2016, the independent Data Safety Monitoring Board (DSMB) recommended to continue the Abili-T study as per protocol. The DSMB also stated that no further DSMB meetings would be required for the Abili-T study.

Merck has an option agreement in place on Abili-T and could exercise that option and move the therapy into Phase 3 if the Phase 2 data is positive.

In March 2016 a restructuring was announced to conserve cash while waiting for the Tcelna results. This should extend the cash runway to Q1 2017.

Research and development expense was $1.8 million. General and administrative expense $1.0 million. Depreciation and amortization was $0.1 million. Leading to a GAAP operating loss of $2.2 million. Interest and other expense was negligible.

Revenue is from gradual recognition of prior milestone payments, so do not add to cash.

Cash and equivalents ended at $10.0 million, down $2.6 million sequentially from $12.6 million. No long-term liabilities.

Opexa believes its cash should last into Q1 2017. By then the top line results from the Phase 2b Tcelna multiple sclerosis trial should be available.

Believes the market opportunity for Tcelna is in the multiple billions. Should the data be positive Merck would likely exercise its worldwide option. Opexa would receive milestone payments plus 8% to 15% royalties.

In the long run Opexa's platform should generate new therapeutic candidates that will add to the value of the company. Already testing OPX-212 for NMO (neuromyelitis optica).


Any conversations with Merck? We are in continuous dialog with Merck Serono. They have been very enthusiastic. They understand the MS market. We discuss the scenarios for moving the therapy to market if trials are successful. We would expect to do just one pivotal study in secondary progressive MS, where there is a huge unmet medical need. We hope to ask the FDA for accelerated approval.

Brain atrophy as an endpoint? Dr. Clyde Markowitz from U. Penn presented at our analyst day. The FDA has been supportive to using brain atrophy as a primary endpoint. In the last 2 or 3 years there has been momentum in that direction. It can be linked to gray matter loss, cognitive loss, and physical issues. There is questioning of the EDSS score by companies including Biogen.

OPX-212 time to clinic? We have taken timing guidance off the table. We will inform you as we actually hit milestones, because we are using such a novel approach. But we are making good progress. One step still needed is to prove out our manufacturing process.

What is the time window for Merck deciding on the option? 45 days from obtaining the data. But Merck is following the trial closely, so they will be ready to interpret the data.

Compartmentalization of inflammation in secondary progressive MS, how does the therapy get to the brain? We create a set of T-cells that can cross various barriers. They are attracted to the inflammation sites. Cells are recruited by signals to the brain. Even a normal healthy brain recruits T-cells. If you cut that off you end up with problems like PML (seen in many MS drugs). We were just talking about the Biogen trial in SPMS and the reason it failed, which may have had to do with the blood-brain barrier, which our T-cells are able to cross.

The EDSS goal in our trial is to achieve a one-point (out of 10) change over three months.

We have a private investor ready to fund $5 million for the NMO study when we move forward, as milestones are hit.

Individualized therapy, is that why Opexa market cap is so low, is it not easy to market? Our assay lets us profile individuals by epitopes the T-cells are binding to. We are expanding out the T-cells that are doing the damage at that point in time. We would assay once per year to keep pace with the evolution of the immune system. So it is a taylored vaccine for each individual. We believe it is scalable, and have educated Merck about that. We believe the cost of goods can be reasonable, with a margin of 80%. But it is novel and may frighten some investors. We believe there is a huge disconnect between where we are and our value in the stock market today.

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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 2016 William P. Meyers