RedHill Biopharma – Edison Open House interview

Hello.

Yes, thanks very much for having us on your program. So RedHill is a NASDAQ-listed pharma company. We're fast-growing, revenue-generating, and as you said, focused on GI and also infectious disease. These are two very important indications that have received a lot of attention from investors recently. On the commercial side of things, we're very advanced for a company of our size. We have three commercial FDA-approved products that are addressing very important areas of unmet medical need. And on the R&D side, we also have several late-stage programs. We have a very strong track record of success. Our late-stage assets include opaganib for COVID-19 infections. We recently announced Phase 2 data that we're very excited about, and we're in the middle of a Phase 2/3 study right now. And in addition, we also have a drug for NTM infections. NTM is non-tuberculous mycobacteria. This is a very serious lung infection that currently has no first-line approved drug by FDA. We could be that first-line product. So we're very excited about it. It's difficult to diagnose. It's a relatively new indication, not a disease that people were aware of until recently when the diagnostic technologies improved and allowed physicians to be able to diagnose it. And therefore, the therapeutic treatment of it has also lagged, and we're right at the forefront. So we have a very robust pipeline and a very active and robust commercial portfolio, and are excited for 2021 and what it might bring for the company.

Yes, thank you. So it's a study, it's a very important study in that it's been given clearance by FDA to be a Phase 3 study and given clearance for a go-ahead, and we have started the study. The study is focused on patients who have NTM disease, specifically MAC, which is basically the major infection relating to NTM. And we're going to be following the patients and looking at two important endpoints. One of them is clinical study endpoints and the other is sputum culture conversion, which is a very important way to measure the disease and whether the bacteria is still in the lungs. So these are two important endpoints that we measure, and we're off to the races with it. It's a very important study as I mentioned because if we're approved, we could potentially be the first first-line product approved by FDA, and that would certainly make a huge difference for the over a hundred thousand, and probably more as you point out, patients in the United States that have to be treated and deal with this disease every year. So very important indication, a very important potential product for this indication. We believe we could have the best drug out there to treat this disease.

Yes, it's a very good question. In fact, we were scheduled to start the study a quarter before we started it, one full quarter, and we pushed it off a little. And the reason is, it's not just with the patients, pulmonologists are otherwise occupied. Yeah, very careful. My mom's husband is a pulmonologist and I hear stories from him all the time in Houston. It's an area where people are very cautious. You have to be very cautious, especially if someone is showing up to your clinic with advanced pulmonary condition of uncertain origin. So people are rightfully very nervous, and as a result, we've postponed this study for a quarter. We believe we're at that place right now where we can start the study, and we've taken all the precautions that need to be taken both to protect the staff that would oversee the study, to protect physicians, to protect patients. We're doing all the right things to the highest standards to make sure that you can conduct this study under the right conditions. And you know, the situation with COVID is in flux. So right now, we have our green light for go in terms of getting this study underway, but of course, we are very cautious and very sensitive to putting safety first, and that's something we'll always keep an eye on. But we're working with the best clinical team out there and we think we can do this study under these conditions and do it safely and under the right GCP conditions to make sure that the data integrity is preserved as well.

A very, very good question. So first, I would preface the answer by saying it really depends on recruitment, and we have to get enough of a track record of recruitment for us to be able to predict the answer to the question with any degree of certainty. So I can throw out rough estimates, but please keep in mind this is not any sort of official guidance, and a lot of the refinement of these timelines will have to happen once we get a pace of recruitment underway and we see how that's coming in. You know, many times a company starts studies and you expect a certain pace of recruitment, it can go faster, it can go slower. Many times it's very hard to predict how the patient flow will come in and will trickle in given the different conditions you might put on recruitment and the availability of other factors that are out there. So it's a tricky one, but you can assume, let's say, if it takes a year for recruitment and then another year or so for the study to go on, you're talking about two years, two and a half years to get some sort of results. But again, that's a very back-of-the-envelope, it's not even back-of-the-envelope, it's just a general estimate based on what similar studies might do. Any precise estimate relative to our study would have to occur again after we get some recruitment under our belt and we have some confidence to give sort of exact estimates.

Thank you very much for the question. So we are actually at the forefront of developments for therapeutics. We've seen a lot of success out there on the vaccine side. Unfortunately, there's been very little success for any company out there on the therapeutic side, and that goes for some, including some of the big names that many of your listeners would be familiar with. When you look at the data and you look at the recommendations of the WHO and other similar bodies who are looking at the data that's generating, there really isn't anything that's making a big difference for patients, if at all. So our drug really is at the forefront. Where we are, as we've recently announced right at the end of the year, Phase 2 data where we showed some very nice signals of efficacy. We also showed safety for opaganib, which is our leading product for COVID. This was in a patient population that had a serious COVID infection, they were hospitalized, and they required oxygen support. We were very excited about that data. In parallel, we are conducting a Phase 2/3 study that we're significantly underway in terms of recruitment. That's a global study, and we believe that study will be enough to submit Emergency Use Authorization applications. So we're very excited about this study and where we are. A little bit about the drug: it has some very unique advantages to it. Number one, it has a dual mechanism of action, so it works both as an anti-viral and anti-inflammatory effect, and that really sets it apart from almost all the drugs out there that are out there for developments. We work both on the cause and the effect of COVID, so that's very important. Number two, it's an oral pill. You see in the United States that even with these monoclonal antibodies that are being distributed, hospitals, physicians, they're having a big challenge in terms of the administration of these drugs to patient bases. By being an oral pill, we have a unique advantage of that. Number three is that it can overcome the potential challenges of mutations with the virus. That's obviously something that everybody's concerned about with the UK mutation, another South African mutation, these other mutations we're hearing about. Our product works on the host, and therefore, we believe it can cast a much wider net in terms of being able to positively affect the outcome of COVID-infected patients. We can work on, potentially be effective on many, many variations. In fact, we've seen some very exciting pre-clinical data on other viruses that are similar but not exactly the same as COVID. So we think our net could be very wide and there could be a huge advantage there. So we have many potential unique advantages, very exciting Phase 2 data, backed up by the way from compassionate use data in COVID patients and also some pre-clinical data which showed that we're able to completely inhibit COVID viral replication. So all of this together is painting a very nice picture of a product that could be one of the leading treatments for COVID-19, and now we're just waiting for this Phase 2/3 data to come out.

Sure, an important question. So right now, under the current design of our study, we've enrolled almost 70 percent of our patients, and the data could come out this quarter. We are considering, one of the things that's happening in COVID treatments is that it's a very fast-evolving field in the way that physicians treat seriously infected COVID patients who are hospitalized. The medical standards are changing, so studies have to sort of keep up with those standards because that affects how you design and how you define success with your clinical studies. So one of the things we're doing is considering changing the primary endpoint of that study. And if we do that, then it will take a little bit longer because we'll have a bigger patient base for that study. So the earliest it will be is this quarter, it may be pushed out a little bit if we change that primary endpoint, but we're talking here about months. It's a very, very short time frame to get very significant results for our study, which we're very excited about.

So right now, the way it's designed right now, it's 270 patients. We might increase that to 400, 450 patients. That's generally the numbers that we're considering as we look to make this change. But the 270, we've recruited over 70, around 70, close to 70. So that gives you a rough sense of how many patients we've already recruited. And fortunately, as you say, many, many patients out there, not just in the United States but also in Europe, Russia, and many of the other countries where we're doing, where we're recruiting the study.

We've looked at that, and we're always happy to have our drug be involved in all sorts of clinical studies to better understand it and how it can be effective. We are very excited about our current study because we think even as a standalone therapy it could have a huge advantage because of that dual mechanism of action, both working on the cause and the effect. And to distinguish that, many of the monoclonal antibodies out there are either anti-inflammatory or they're antiviral. So, you know, in the case of COVID, because both of those factors play such a significant role in the outcome of the disease, just affecting one and not the other really is a limited approach to treating, which might explain some of the mixed results we've seen. We believe that by treating both the cause and the effect, we will see potentially very significant results from our product as itself. And when I mean as itself, the drug is administered on top of standard of care, whatever that might be. But that's the way you have to run these studies because the patients are hospitalized. And we're looking to do that, but we think that even on top of, as a standalone on top of existing therapy, we will have significant results and that will be very meaningful clinically.

Sure. So on the commercial side, we have a full R&D pipeline of GI products that we've advanced and we've had successful clinical results for RHB-104 for Crohn's and also the Talicia for gastroenteritis and IBS-D. On the commercial side, which I think what you're asking about, is a big focus for ours. We have three FDA-approved products. The first one is Movantik. This is a product for opioid-induced constipation that we acquired from AstraZeneca. AstraZeneca launched this product in 2015, spent a big amount of time and resources to make it the number one drug of its class for OIC, really established a nice product, and we were able to acquire that product from AstraZeneca and build on the efforts that they've done and now make it a RedHill product and grow the product beyond that. So that's the first one. The second product is Talicia. This is a product we developed in-house. It's for H. pylori infection. This is an indication that's been pretty much neglected by the pharma world unjustifiably because it's an area of huge unmet medical need. H. pylori infection has been identified both by the WHO and FDA as a top priority pathogen for developing new drugs because of the problem of resistance to the current standard of care. We have what we think is the new gold standard out there, and we're launching that product right now on our own with our commercial team. And then the third product is Aemcolo for traveler's diarrhea. This is a product we acquired from Cosmo, a leading European GI company that I'm sure many of your followers are familiar with. They entrusted us with this product to be their U.S. home for it. And well, traveling has stopped, so traveler's diarrhea has obviously not been a significant indication last year, but this year with travel, we expect travel to return and we think this will be a significant product. So we have three important products. We have a commercial team based in Raleigh, North Carolina, 100 sales reps, and a very experienced commercial team that's helping lead the effort. So we are very excited about our commercial team and what we could potentially do with these products.

Yes, absolutely. But it's classified by the WHO as a carcinogen on par with asbestos and smoking. So if you get, unfortunately, gastric cancer, it's almost certainly that you have it because you have an H. pylori infection. It's a very bad bacteria. It needs to be eradicated when it's diagnosed. And that's the reason why this is potentially a very large market. We estimate 2 million, maybe even as much as 3 million Americans get treated for it every year. Big market, big problem with resistance, and a significant health issue as you mentioned because of the issue of the link with gastric cancer and peptic ulcer disease as well as other problems that H. pylori causes. And also significantly under-diagnosed, as your NTM product is.

Yes, so a few key ones to pay attention to. Number one are commercial operations. We're seeing fast-growing scripts for Talicia, we're seeing growth in Movantik, and we expect Aemcolo to start growing this year. So three products that we hope will contribute significantly to our commercial operations there for the company and bring us to profitability sometime this year. So investors should follow our earnings call every quarter just to get our updates. We try to give a lot of transparency on those calls regarding what we're seeing from everything from scripts to managed care and how COVID is affecting everything. So those are very important earnings calls to track, and of course they happen every quarter. Number two is opaganib. As we're in the middle of a very important Phase 2/3 study, readout will be happening in the coming months, and that's as I mentioned could be very significant. We know that some of the drugs that already have received Emergency Use Authorization are selling for hundreds of millions if not billions of dollars just simply because there are so many patients out there and very few treatment options. So this could be a very meaningful product for us if we're successful. So the opaganib readouts, and also by the way, RHB-101, this is our second product for COVID. We're also starting a clinical study for that product that is in the more milder COVID population, and also a very important drug. So that's another milestone that investors should follow. And then the last one that I would keep in mind is NTM. As I mentioned, we're starting that clinical study and we'll be having updates over the course of the next six months regarding how that study is going because we could potentially be the first product to market as first-line treatment following our progress with that. But that drug is very important and I encourage investors to do so.

Yeah, thank you for the question. So 2020, as you mentioned, has certainly been challenging not just for RedHill but for everybody. On the other hand, it's also given us as a company an opportunity, and that is to make a difference with this terrible pandemic. We're fortunate to have opaganib, which is probably the right drug at the right time to make a difference. It's backed by extensive pre-clinical data and safety data, so we've been comfortable to take it directly into late-stage clinical studies, which we've done, and generated some very promising data right at the end of 2020. So the best way that we think we could end 2020 is on positive, promising pre-clinical data, and hopefully that will lead into successful Phase 2/3 data in 2021, and opaganib will be an important product for helping patients with this terrible disease.

Thank you.