Analyst Conference Summary

Opexa Therapeutics

conference date: August 11, 2016 @ 1:30 PM Pacific Time
for quarter ending: June 30, 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, flat sequentially from $726 thousand, and flat from $726 thousand year-earlier.

Net loss was $2.1 million, sequentially from $2.2 million, and improved from $3.5 million year-earlier.

Diluted EPS was negative $0.30, sequentially from negative $0.31, and up from negative $0.56 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, maybe early in Q4.

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 almost all patient visits have now been completed.

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. Milestone payments if Merck does exercise their options could total $220 million. The milestone if the option is exercised is $25 million.

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 $2.1 million. Interest and other income was negligible.

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

Cash and equivalents ended at $7.85 million, down $2.15 million sequentially from $10.0 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 in preclinical testing OPX-212 for NMO (neuromyelitis optica). If funding becomes available could rapidly advance OPX-212 to a Phase 1 clinical trial.

Opexa has over 160 patents.


Brain atrophy endpoint range as a signal? We are encouraged by the ocrelizumab data in primary progressive MS, a different indication than we are going after. They see that as a valid endpoint. Their 17.5% reduction is, similar to us, they see it as a valid endpoint. their approach validates our approach. The FDA sees this as clinically relevant. We have powered our study based on our historical data thinking we might see a 37% reduction in brain atrophy. It should make our data look better. The links between atrophy and progression are becoming stronger. Our mechanism of action may be better by suppressing localized of the inflammatory response in the central nervous system.

Altering the course of disease rather than acute cures? Our therapy gets to the root cause of MS. We are trying to restore the function of the body's immune system.

Recent discussions with Merck? Discussions have gone well. We have discussed both manufacturing and clinical trial plans, should the data be positive.

NMO anything? Our company has 20 people. So we have slowed down on NMO. We have mostly overcome the challenges around peptide manufacturing.

Made comments on Biogen's definition on secondary progressive populations, and their trial failed. From the Tystabri mechanism of action, we believe the trial was set up to fail.

The MRI interpretations are done centrally by a specialist, by a global leader.

Placebo reduction in atrophy? Typically 0.5% per patient per year.

Discussed the stem cell treatment for MS published in the Lancet. Two patients dies, whereas Opexa has never had a single serious adverse event in its trials. Tcelna appears to be very safe, including safer than the current MS therapies.

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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