TFF Pharmaceuticals, Inc. (NASDAQ:TFFP) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET

Company Participants

Paul Sagan – Investor Relations

Glenn Mattes – President and Chief Executive Officer

Kirk Coleman – Chief Financial Officer

Dale Christensen – Director, Clinical Development

Chris Cano – Chief Operating Officer

Bill Williams – Professor, University of Texas, Austin

Conference Call Participants

Jonathan Aschoff – ROTH

Daniel Carlson – Tailwinds Research

William Morrison – National Securities

Doug Russell – Brown Harris Stevens

Operator

Good afternoon, ladies and gentlemen and welcome to the TFF Pharmaceuticals’ Third Quarter 2020 Financial Results. I would now like to turn the call over to your host, Mr. Paul Sagan of TFF Pharmaceuticals, Investor Relations. You may begin your conference.

Paul Sagan

Thank you very much, operator. Hello, everyone and welcome to TFF Pharmaceuticals third quarter 2020 financial and business results conference call. With me on the line today is Glenn Mattes, President and CEO of TFF; Kirk Coleman, Chief Financial Officer; Dr. Bill Williams of the University of Texas at Austin; Dr. Dale Christensen, TFF’s Director of Clinical Development; and Chris Cano, TFF’s Chief Operating Officer.

A press release announcing our Q3 results is available on the TFF Pharmaceuticals’ website. Please take a moment to read the disclaimer about forward-looking statements in the press release. The earnings release and this teleconference both include forward-looking statements and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the U.S. Securities and Exchange Commission, including the risk factors section of our 2019 Annual Report on Form 10-K as filed with the SEC.

And now, it’s my pleasure to turn the call over to Mr. Glenn Mattes.

Glenn Mattes

Good afternoon and thank you for joining us today to review the company’s third quarter operations and recent highlights. During his call, I will provide an update on our clinical and corporate progress. And then I will ask our Chief Financial Officer, Kirk Coleman to review the company’s financials. We are also happy to have Dr. Bill Williams from the University of Texas at Austin, who will talk about some of the exciting progress we are making in applying our Thin Film Freezing technology to drugs, vaccines and biologics. And then Chris Cano, our Chief Operating Officer and Head of Business Development will update us on business development and operational initiatives for the company. And then we will open up the lines for your questions.

As you have seen from this afternoon’s press releases, we have had yet another enormously productive and active quarter, culminating this week with two very significant agreements: first, with Augmenta Bioworks, and most recently today, with Felix Biotechnology. I will discuss these two strategic developments in more detail shortly. But importantly, I want to emphasize that these two deals and the continued progress we are making with our clinical programs continue to validate the dual-track business model you have established for the company and demonstrate the technological capability and market potential of our Thin Film Freezing platform. We have also made significant progress in our ongoing work with the University of Georgia working with the renowned virologist, Dr. Ted Ross we have successfully reformulated for the first time a potential universal flu vaccine into a dry powder for inhalation ensuring equivalent advocacy to liquid formulations.

Our three internal development programs have maintained strong momentum despite an extremely challenging clinical environment due to the COVID pandemic. Our lead clinical program, Voriconazole Inhalation Powder, the first clinical study ever in healthy subjects of direct-to-lung dry powder formulation for the treatment of Invasive Pulmonary Aspergillosis successfully completed Phase 1 dosing and will enter Phase 2 trials. These results from the Phase 1 study were outstanding, demonstrating safety and blood level outcomes. Our second clinical trial program, Tacrolimus Inhalation Powder, an important immunosuppressive agent for the treatment of lung transplant rejection has demonstrated no clinically significant drug associated adverse events in its Phase 1 trial and has achieved substantial immunosuppressive blood levels. These results give us a strong belief that TFF Tacrolimus will have a significant potential beyond lung transplant patients to ultimately include heart, liver and kidney transplant procedures. We also think there is potential to study PFF Tacrolimus, examining a survival advantage cohort in transplant patients. And on niclosamide first-in-human trials are on schedule.

Finally, updating our partnership between the intermediary company and PLUS Products is proceeding well. PLUS Products is a working production line, has been testing product now for quite some time with positive reactions from consumers to their concept tests. During the quarter and responding to the needs of our pharmaceutical company partners, we took important steps to expand our manufacturing capacity to help develop and produce products currently under assessment. This expansion with one of our premier CROs gives us a secure third choice for our Thin Film Freezing dry powder inhalation products. We have plans to further expand our capacity at other locations. Dr. Williams and his team at the University of Texas at Austin continue to report progress in their work in repurposing lacosamide, an existing broad-spectrum antiviral agent using the Thin Film Freezing and other techniques to enhance its effect in COVID-19.

So, to sum up briefly, we believe we have a remarkable technology that allows us to rapidly investigate, prototype, and develop a wide variety of compounds. The market and potential partners are recognizing our unique capacity and capabilities. And this is creating a world of opportunities for us.

So now I would like to take a closer look at this week’s exciting partnering developments. Augmenta Bioworks and Felix Biotechnology represent potential breakthrough applications for our Thin Film Freezing platform in monoclonal antibodies and bacteriophages respectively. The time and technology effort needed to succeed with these two complex biologic compounds in our platform was intensive. And Dr. Bill Williams will speak to this later in the call. But it’s important to note that these developments open the door for other potential collaborations in these two new and important drug delivery modalities.

Looking first at our agreement with Augmenta Bioworks, this is a worldwide joint development and collaboration agreement to develop commercial products that incorporate Augmenta’s human-derived monoclonal antibodies for potential COVID-19 therapeutics. We had said after a successful private placement that we would add a fourth product to our internal development portfolio. These products will be developed utilizing our Thin Film Freezing technology to manufacture dry powder formulations of these specific monoclonal antibodies for inhalation delivery directly to the lungs of patients. The agreement also includes the development of formulations for parenteral administration, where our Thin Film Freezing dry powder formulations can be reconstituted, potentially mitigating the impacts of cold chain storage and handling. And we also have the option of developing two additional Augmenta antibodies for indications other than COVID-19. Both companies have agreed to a 50:50 split of all costs and both companies have agreed to the same 50:50 split of all revenues, cash payments and our future cash payments related to the sales or license of the products resulting from the joint development project to a third-party. This is a very synergistic agreement for both companies and we are looking forward to develop these monoclonal antibody therapies along with our Voriconazole, Tacrolimus and botanical programs.

We are also very excited about the prospects of our new relationship with Felix Biotechnology. This firm is on the leading edge in the developing field of bacteriophage therapies. We also have entered into a non-binding Letter of Intent with Felix, pursuant to which the parties have agreed in principle to negotiate and conclude a non-exclusive worldwide license of our Thin Film Freezing technology. They would employ this technology to develop a bacteriophage-based biotherapeutic for inhaled delivery directly to the lungs of patients. And under the proposed collaboration, development and license agreement, which we hope to sign with Felix shortly in exchange for the license of our TFF technology, Felix will provide upfront payments, development and commercial milestone payments and royalties on the eventual net sales of the Felix stage products. The payments exclusive of the eventual royalties could total up to $281 million. It is important to note that a definitive agreement is subject to the mutual agreement of the parties in a number of conditions, including Felix Biotechnology’s successful completion of a Series A financing. We are very excited about the prospects for this deal. And again, it opens up the door for future applications in the exciting and growing field of phage therapeutics.

And now, I would like to turn the call over to Kirk Coleman for a review of our financials.

Kirk Coleman

Thank you very much, Glenn. For the 9 months ended September 30, 2020, research and development expenses for the company were $7.6 million compared to $5.6 million in the same period in 2019. The increase in research and development expenses during 2020 was due to the ramp up of research and development activities following the completion of our IPO in October of 2019. The ramp up includes our preliminary analysis in the testing of dry powder formulations of certain drugs and vaccines we believe have the potential to become a product candidate.

General and administrative expenses for 9 months of 2020 were $5.1 million compared to $1.7 million in 2019. The company reported a net loss for the 9-month period of $12.7 million compared to a net loss of $7.2 million for the same period in 2019. Weighted average common shares outstanding basic and diluted for the 9 months ended September 30, 2020 were 20,810,004 compared with 4.4 million for the same period in 2019. As of September 30, 2020, we had total assets of approximately $43.2 million and working capital of approximately $40.6 million. At the end of the quarter, our liquidity included approximately $41.6 million of cash and cash equivalents.

As of today, November 5, the company has filed a shelf registration statement on Form S3 with the Securities and Exchange Commission for future offerings of up to $100 million of the company’s common stock. The company’s balance sheet and cash position are very strong, with adequate financial resources to continue our near-term and long-term business plans. However, we believe it’s prudent to have an effective registration in place that can help provide the company with access to capital markets, so that we can respond effectively to future business opportunities should they arise.

And with that, I would like to turn the call back to Glenn.

Glenn Mattes

Thanks, Kirk. And now, I want to turn the call over to Dr. Bill Williams, who will talk about some of the groundbreaking work we are doing using our Thin Film Freezing platform in the broad field of biologics, including our efforts with Augmenta, Felix and the University of Georgia. This is an area where our technology is unique in its ability to reformulate these biologics into inhalable dry powders. Bill?

Bill Williams

Thanks, Glenn. Good afternoon, everyone. For the next few minutes, I would like to review at a high level our Thin Film Freezing process, what it does and the significant implications that it provides, focusing mainly on the delivery of biologic therapeutics and vaccines to patients.

Also, I would like to discuss how the Thin Film Freezing process can facilitate and improve in the eventual worldwide distribution of these types of therapeutics by eliminating the resources and prohibitive cost associated with cold chain storage requirements in handling. We have developed the technology that can very rapidly freeze liquids that contain a therapeutic drug at a high rate. We have greatly expanded the types of drugs that benefit from the Thin Film Freezing process, including low molecular weight drugs that are water insoluble and now even more biologics-based drugs, including monoclonal antibodies, messenger RNA, or mRNA, both naked and contained in lipid nanoparticles, small interfering RNA, or siRNA, plasmid DNA, bacteriophages and a variety of antigenic vaccines, both adjuvanted and non-adjuvanted. We have discovered that these therapeutic agents maintain their chemical and physical properties as a dry powder and we have demonstrated this in both in vitro and in vivo studies.

How and why have we done this? Well, COVID-19 and the rapid search for vaccines and therapeutics have provided us the quick pivoting start and continued momentum to improve upon the drug delivery systems that are being developed to eliminate this virus. And with this as a driver, we are broadly applying our Thin Film Freezing technology to many other diseases that benefit from similar therapeutic agents. So, why is Thin Film Freezing so relevant to solve these drug delivery problems? The Thin Film Freezing process creates what we call a brittle matrix powder. In other words, a powder that has a high surface area, low porosity and is easily shared all highly relevant and useful properties for drug delivery. These types of powders are extremely well suited for administration by dry powder inhaler delivery. The Thin Film Freezing process is also well suited for providing a chemically and physically stable dry powder to facilitate long-term storage without the need for cold chain storage. Also, the dry powders can be reconstituted at the point of administration to the patient and injected.

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The key to this process and what differentiates it from other powder type formulation technologies is the rapid speed of our freezing. It happens literally in milliseconds. This rapid speed fully maintains the chemical and physical properties of the therapeutic agent and thus facilitates its delivery. For powders intended for delivery by dry powder inhalation to the lungs, our testing indicates that the portion of drug available to be deposited in the deep lungs has the potential to reach as high as 75% to 80%. In other words, these brittle matrix powders made by Thin Film Freezing are highly aerosolisable using conventional, commercially available dry powder inhaler devices.

Why is this relevant? An easily understandable benefit of this type of drug delivery application is to treat lung diseases in which this target site of delivering the drug is to lungs. Conventional oral delivery of the drug to the gastrointestinal tract can mean only a fraction of the drug actually reaches the ultimate target side of action, the lungs, while the remainder of the oral dose of drugs is delivered to other off-target sites in the body, potentially causing adverse systemic effects. In this situation, a high dose of the drug must be administered to ensure that the required amount of drug actually reaches the lungs. An inhalable version, by contrast, will deliver the drug directly to the target site of the disease, the lungs, thus greatly reducing the amount of drug required for administration and thus, less delivered to off-target sites in the body and less related side effects. A lower dose of drug can be used by inhalation, which can enhance the drug safety profile and also reduce the potential for drug interactions.

To better illustrate this, we recently published in the peer-reviewed high impact journal pharmaceutics, a paper on our inhaled remdesivir made by Thin Film Freezing and administered it by dry powder inhalation to animals. Our high loading dry powder remdesivir formulations had excellent delivery to the lungs in the animals and exhibited high levels above remdesivir and its active metabolite in the lungs, exactly where it needs to be administered to exert its antiviral activity against COVID-19. In addition, we have conducted similar studies on our inhaled niclosamide powders made by Thin Film Freezing and we will soon publish our animal study results.

In addition, drug loaded powders made by Thin Film Freezing are not limited just to the use of an inhaler device. These powders can be reconstituted at point of administration to the patient and injected or can be administered internasally or by nebulization for very ill patients on mechanical ventilation. But what is truly remarkable about our Thin Film Freezing technology is that it can be applied to a wide range of biologic compounds as well. And currently, our Thin Film Freezing process is the only technology that can effectively reformulate these large, complex unstable biologics into a dry powder for either direct delivery to the lungs or to be reconstituted back into a liquid form for injection at the point of administration. It’s this capability that is of extreme interest to potential partners and drug companies who are searching for new delivery modalities for their compounds.

As I discussed earlier, the biologics we are currently working with and reformulating, include mRNA, siRNA, plasmid DNA, vaccines and most recently with the announcements from Augmenta Bioworks on their monoclonal antibodies and from Felix Biotechnology on their bacteriophages. Monoclonal antibodies commonly referred to as mAbs are a type of protein made in the laboratory that combined the substances in the body, including cancer cells. There are many kinds of monoclonal antibodies and they are typically made so that the monoclonal antibody binds to only one substance. The interest in the scientific community in monoclonal antibody therapeutics, particularly for the treatment of COVID-19, is extremely high, with the promise that they will harness the immune system’s natural response to viral invaders. We are working to deliver a variety of different monoclonal antibodies as a dry powder for both needle-free dry powder inhalation and injectable routes of administration.

And in the case of Felix Biotechnology, we are applying Thin Film Freezing to the formulation and delivery of bacteriophages. Bacteriophages are bacterial viruses that infect specific strains of a single bacteria species. Bacteriophages are highly relevant and of extreme interest to scientists and researchers as therapeutic alternatives to antibiotics because of the high prevalence of multi-drug resistance to antibiotics. For this reason, it is suggested that they can be used either alone or in combination with antibiotics to treat bacterial infections. The other large complex biologics that we are reformulating include mRNA, which is a single-stranded RNA molecule that is complementary to one of the DNA strands of the gene. We are working with mRNA as therapeutic agents to treat COVID-19.

Another is siRNA, which stands again for small interfering ribonucleic acid, a class of double-stranded RNA molecules. It is sometimes known as short-interfering RNA or silencing RNA and it’s used to interfere with the translation of proteins. We are studying siRNA delivery using Thin Film Freezing as a disease therapeutic. And finally, we are studying plasmid DNA used for disease treatment as DNA vaccines for genetic immunization. After significant research efforts, we have recently reported results on our collaboration with the University of Georgia’s Center for Vaccines and Immunology, where we applied Thin Film Freezing to UGA’s universal influenza hemagglutinin recombinant vaccines, and studied if our process was affected by and will affect the immunogenicity and efficacy of these vaccines in dry powder form.

Our Thin Film Freezing process successfully converted the liquid vaccine product into dry powders that elicited equivalent neutralizing antibodies and protection against influenza virus infection compared to the non-process liquid formulations. We now have subsequent studies on these dry powder vaccines ongoing. Ultimately, the issues that we are critically addressing with these complex biologic and their formulations are twofold. First, facilitating delivery of the biologic to multiple routes of administration, including injectable, intranasal and inhalation and second, addressing head-on the cold chain storage requirement. Those cost and logistics associated with cold chain storage when these biologics are formulated as a liquid dosage form.

So what is cold chain and why is it important to address? Cold chain refers to the requirement that a therapeutic product must be maintained at cold temperatures during its storage and distribution, all the way to the point of administration to a patient a relevant example of a biologic product that requires cold chain storage, or the mRNA liquid vaccines currently in Phase 3 testing for COVID-19. These vaccines must be stored at controlled temperatures that range from refrigerator temperatures to extreme freezing temperatures as cold as minus 60 degrees C to minus 80 degrees C. Even in the United States, maintaining temperatures as low as this requires significant effort, and in less developed countries that that don’t have the required infrastructure for storage and distribution. This is just not possible. We continue to demonstrate through our studies that we can convert these liquid products that contain biologic space therapeutics, and vaccines into dry powder forms that are stable at room temperature and thus do not require such cold chain storage.

With that, I would now like to turn the call over to Chris Cano, our Chief Operating Officer who can update you on more of the progress the company is making in these exciting areas.

Chris Cano

Thank you. Thanks, Bill and good afternoon everyone. As I have shared previously, the TFF business development team is laser focused on three key areas of growth for the company. These three key areas are: one, growing the TFF pipeline of internal development programs; two, our pharma partnering efforts; and three, our government contracting efforts. We continue to make great strides in each of these key areas.

Before I share with everyone specific examples of the progress we were making with specific projects in each of these areas. I thought it would be a good idea to take a few minutes to discuss the BD process. Last earnings call, I walked everyone through our BD process, as we define it here at TFF. And I received a few follow up questions and specific requests for clarity and insights into each of the BD steps. So I think it will be helpful to walk everyone through our steps again. But this time take a deeper dive into each. First, the TFF BD team has a very targeted exercise where we identify potential partners. These are companies working on certain compounds such as mRNA, SiRNA, phage, monoclonal antibodies, among other complex compounds. These are complex compounds that would benefit from the characteristics of the Thin Film Freezing technology. Each of these compounds have specific challenges. For example, these compounds face formulation issues, stability issues, routed administration issues, such as delivery directly to the lung, where they require cold chain or they require a bulky nebulizer just to name a few.

Once identified, we then strategically reach out to the decision makers at these companies with the intention of engagement and having an introductory discussion upon an introductory discussion, the next step is entering into a confidentiality agreement or CVA. The CVA allows for a free exchange of ideas and facilitate a discussion allowing TFF to create an awareness and to educate the potential partner on our innovative technology, the advantages of utilizing our technology on their proprietary compound and to share the successes we have had with similar partners and or compounds.

Based on the results of these discussions, and identifying a project to collaborate on, we then enter into a material transfer agreement for an MTA along with the Statement of Work, or an SoW. Under the MTA, we are able to receive the partners proprietary materials, prepare initial formulations, perform characterization work, do some aerosol testing, and ultimately perform some optimization work all done in collaboration with our partner. We then select the optimal formulation and/or formulations. We run a batch of dry powder samples, deliver the dry powder samples to the partner – for the partner to perform in vitro or cell culture knockdown testing, to confirm the activity, immunogenicity and/or transfection as the case maybe. All of this work is confirmatory that indeed the dry powder formulation is equivalent to or better than the original complex compound.

The next critical step is planning the in vivo work, which usually consists of a mouse model, where the dry powder will be administered to the mice, along with other control arms to confirm activity by ability and/or immunogenicity. It is after this in vivo work is completed and the results are confirmatory that both TFF and the partner will enter into a collaboration and license agreement. This is the inflection point where our partnership will evolve from lab scale testing to GLP/GMP manufacturing scale testing. This requires a license from TFF.

I would like to spend the next few minutes giving an update on our ongoing projects. As Glenn and Bill discussed, on October 25, 2020, we reported the positive results from our collaboration with the University of Georgia’s Center for Vaccines and Immunology, the CVI Group. This is a very exciting development for the company as we now have animal data that confirms that TFF dry powder formulations of vaccine maintain its high potency. We are in strategic discussions with Ted Ross and the CVI Group on the next potential steps of developing new vaccine, including a potential partnering of these antigens from UGA, working together with UGA to obtain further funding to perform a ferret study, which is the gold standard in influenza. We are exploring all options at this time.

Another exciting business development effort was our announcement on November 2, where we announced our joint collaboration and development agreement with Augmenta. This opens new doors for TFF as we are collaborating in the development of monoclonal antibodies for COVID-19. As well, this opportunity provides TFF the chance to develop additional mAbs or monoclonal antibody in other key respiratory diseases. We are very excited to progress this collaboration and move this project forward.

As Glenn also mentioned, earlier today, we announced entering into a Letter of Intent with Felix Biotechnology. This collaboration will further strengthen our position in the phage space and further validates the benefits of the TFF technology to formulate complex compounds in a dry powder for delivery directly to the lung to treat specific respiratory diseases. Both the Augmenta and Felix transactions are extremely important to TFF for many reasons. First, these transactions encompass the TFF strategy for partnering. TFF has the flexibility to co-develop products as well as enter into straight technology license. These transactions also reflect that TFF can execute on transactions, both that drive product development and financial upside for the company. These transactions also validate the TFF technology through formulation and activity testing that our TFF technology works. These transactions also provide the opportunity for TFF to strengthen its expertise.

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We are building our experience and expertise in each category of each complex compounds. And we are now the market leader in dry powder formulations of monoclonal antibodies and phage. This is critical as it will allow us to expand into additional collaborations in both the mAb and phage spaces with new partners and it allows TFF to continue to build a concrete foundation in order to utilize our technology and transcend into other areas of focus. We are building this foundation, enhancing our technology and expanding our reach, which will drive strong value for the company and its stakeholders.

Another projects we are working with a top 10 pharma company. Back in July, we entered into an MTA under which we are formulating their proprietary siRNA into a dry powder. We shipped to the partner our dry powder samples and they performed their in vitro testing. The results of the dry powder versus the original liquid solution, was that it was equivalent. Both the partner and TFF are extremely pleased with the results. We are now in the process of planning in vivo testing, which will begin later this month. On another project, we are working with a top 5 pharma company. They initially sent us one of their proprietary compounds. That was extremely challenging to formulate. We were successful in formulating a dry powder version. We completed the in vitro tests, which were confirmatory and we are now planning of the in vitro testing, which will be performed next month. This particular partner was so pleased with the TFF technology and the work being performed that they have now delivered us a second compound. In fact, we are now amending our initial MTA to include a third compound. Since we last spoke, we have entered into numerous new MTA with new partners. We are working with multiple partners on various proprietary products, such as mRNA, SiRNA, plasma DNA, monoclonal antibodies, bacteria, bacteriophage AAV, VSV vaccines and we are formulating their proprietary biologics into a TFF dry powder for inhalation, delivery directly to the lung. We are very excited for the future for these potential collaborations. Well, I have this opportunity, I think it is extremely important to thank our strongest partner, and most valued collaborator. All of these business development efforts are supported by the tireless efforts of our collaboration partners at the University of Texas at Austin. With the support of Dr. Bill Williams and his research team, we continue to expand the applications of the Thin Film Freezing technology into new and innovative areas of drug delivery. In closing, from a BD perspective, we are very excited about the growth opportunities of our technology and our company. We believe that we have only scratched the surface of the many applications of the Thin Film Freezing technology. Thank you for your time. Today, I will now hand it back over to Glenn.

Glenn Mattes

Thanks very much, Kirk, Chris, and thanks to Bill as well. This has been another quarter of remarkable activity in progress for TFF. The marketplace is responding to the promise of our technology. And our team continues to deliver and produce remarkable science. Despite the challenges of the global pandemic, I am so proud of their efforts. As always, we appreciate the support of our investors, and partners as we look to further the potential of our technology and our company. And we look forward to updating you on our progress in the coming quarters. And with that, I would like to turn the call back to the operator and open it up to questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Jonathan Aschoff with ROTH. Your line is open. Please go ahead.

Jonathan Aschoff

Thank you very much. Glenn. I was just curious why do you release the interim Phase 1 SAD dosing data for Tacrolimus rather than await for full SAD results, which in and of themselves would have still been partial Phase 1 data? And I was just curious, what was the significance of that?

Glenn Mattes

Yes, thanks. Jonathan, it’s a good question. So, we were so impressed with the results we were getting in that Phase 1 data that in fact, Dr. Dale Christensen is actually on the line with us who is running all of our studies. It started to make us really look at Tacrolimus and the potential of the compound, beyond even the indication that we are thinking of [indiscernible]. So, we are finishing off the SAD, we are going to be starting the MAD shortly, but we wanted to really be able to say, hey, look, we know we have something really special here, no adverse events, the blood levels that we are getting were so significant. Now, when you look at this compound, from our strategy standpoint, which would be to dissolve to the pivotal trial. And then looking to find a partner that we think the asset itself has even greater value than we originally anticipated. And then I would believe has tremendous potential beyond lung transplant into heart, liver and kidney transplant. And when we look at those indications, Tacrolimus has a very, very significant market share. Secondly, we think that the results could be so positive, because of a lower dose going directly to the lung for at least similar efficacy that the drug has potential to show advantages in survival. So, we thought it was important to get that information out and really reflect sort of an enhanced view and an expectation of what we have for the asset.

Jonathan Aschoff

And how long do you think it would take a trial to show survival?

Glenn Mattes

Dale, do you want to answer the survival question?

Dale Christensen

Yes. And I did want to add one more thing to what Glenn had said, the other aspect of that release is that we are interleaving the MAD, to the SAD cohorts will be dosed along with the starting of the MAD. And so we have reached a point in the safety data that allows us to start the multiple dosing instead of waiting until the end and that was another aspect of that release. In terms of the survival aspects for the lung transplant patients, the first year it shows the greatest degree of survival and really the key aspect would be to show the survival advantage at that 1 year time point. And so it’s really 1 year survival, where we would expect that and we would start treating subjects early on within the first month after transplant and we would be following them for that full year.

Glenn Mattes

Thanks, Dale.

Jonathan Aschoff

Thank you, Dale. A question for actually first of all, can we have any more Felix financial details or is just that’s a blanket no?

Glenn Mattes

Well, I can give you the structure, Jonathan, where we are doing this as we have been – we are going to do all of our licenses with meaningful upfronts, milestones. So the number you are looking at is the compilation of the upfront development in sales milestones, less royalty. So we haven’t been disclosing the specifics of these dollars, but that’s the structure. And what we have agreed this just to sort of give you the bottom line on what these deals are worth. Maybe as an aside where we have been working with Felix are quite some time had great results as Chris described in our work, getting the formulations done. This also helps improve their IP position with the compound, using the TFF technology gives them great differentiation and a high level of confidence that they are going to [indiscernible] and secure the funds and get this done quickly so we can move ahead.

Jonathan Aschoff

Okay. And what – I joined the call late, what [indiscernible] regular release, what’s Felix going to do with that?

Glenn Mattes

Do with sorry.

Jonathan Aschoff

The phage, inhalable phage?

Glenn Mattes

Chris, I don’t know, do you want to talk a little bit about? We are not disclosing the indication, but I guess I will answer the question, because it’s a respiratory indication.

Jonathan Aschoff

Okay. Last one, for Bill, as I think probably best for Bill, as you are buying against competitors for these transactions. It certainly sounds like you are using quite a few talks. Could you please put your finger as hard as you can on how you differentiate Thin Film Freezing from the technology available from your closest competitors going after the same business?

Bill Williams

Yes, I mean, the differentiating factor for the type of powders that we are able to make with Thin Film Freezing, it’s this freezing rate enables the formation of these brittle matrix powders. So, those brittle matrix powders are then you can do those to where it’s a one step process that can – they can then be delivered to the lungs or as an injectable for reconstitution for kind of the cold chain storage argument. So, that’s the differentiating factor. A lot of these biologics, I mean, they are protein based. They are sensitive to being an illiquid and also they are sensitive to vibrations and pH and all sorts of stuff will cause degradation. And that’s why they in essence have to be in a cold chain environment. And so we are able to have a process that will produce this type of powder and not affect their stability or viability.

Jonathan Aschoff

So, would your closest competitors maybe make a product, but it doesn’t dissolve as readily or after its inhale the proteins don’t function, they don’t fold properly, is there something like that?

Bill Williams

Yes. So a competing technology might be conventional localization. So, it’s very slow freezing. And the issue there is the powder you get, even if the biological stable, the powder, you get is not in a form that can then be administered by dry powder inhalation that you would have to reconstitute and then administer by nebulization. And so a lot of the nebulizers are high energy, you get a lot of shear from the device itself. And that can affect the stability of the protein. The other competitor for some of the biologics could be spray drying, but that also exposes these biologics to significant shear during the process, mechanical shear as well as heat, because it’s an evaporative process. And so we believe, well, we don’t use mechanical shearing and we don’t use heat. So right away, we are – our process is advantageous over spray drying, but that’s how – Jonathan, that’s how we differentiate.

Glenn Mattes

So, Bill thanks and Jonathan thanks. We have a lot of people in the queue. So around kind of follow-up one on one. Thanks, Jonathan.

Jonathan Aschoff

Thank you.

Operator

Thank you. And our next question comes from a line of Mayank Mamtani with B. Riley. Your line is open. Please go ahead.

Unidentified Analyst

Hi, good afternoon. This is [indiscernible] on for Mayank. Congrats on all the progress this quarter and fantastic. Couple of questions from us. Maybe first, piggybacking on some that were already discussed, specific of the Tacrolimus program, good to see it’s kind of progressing as it is. Can you talk to some of the steps before you start to explore some of these other indication that it relates to heart, liver and kidney and maybe in the context of any benefits with the inhale delivery relative to Tacrolimus orall?

Glenn Mattes

Yes. So the thinking strategy remains intact. We plan on developing the drug by doing a pivotal trial and getting the drug to the point where it’s ready for marketing approval. Our business model in terms of resources to take the drug and invest in the drug to that point and at that point find a partner, so that remains intact. However, our outlook and our forecast for Tacrolimus are much higher than I think they were only started the program. And therefore, we mentioned the fact that we think there is great opportunities to develop the drug in other indications. So, we will enter the next step for us from a clinical development standpoint is to do the pivotal trial, ever an interim analysis on that trial and report the results and then take it to the finish line with that specific trial.

Unidentified Analyst

Great. That’s really helpful. And then kind of given everything that’s going on across internally on programs and then some of the other partnerships that you have recently entered and may enter in the future, can you talk to kind of what the recent manufacturing agreement with Experic does in regards to production for both clinical trials and commercial scale that should get you capacity for each?

Glenn Mattes

Well, we are constantly looking at expanding our contract manufacturing partnerships, to be prepared to do the work and be able to satisfy all of the potential opportunities we have. So right now, the strategy is focused on CMO partnerships. And as we – so when we go and we discuss, for example, phages or mAbs or vaccines, we know where we are going to go. So, we haven’t put a capital plan or intend to put a capital plan in place to do our own bricks and mortar. But there are enough potential partners out there that we are engaging and talking to them. So we will have capacity to satisfy all of our internal needs and future needs with the transactions that we are going after.

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Unidentified Analyst

Great. And then if I can squeeze in one more, maybe for Dr. Williams. Just wanted to kind of understand it was really helpful to hear the process on kind of how the business development goes on. But further Augmenta sort of collaboration and some of the in vivo studies that are done, could you talk to what you are seeing in terms of neutralizing or binding assays and how that compares to what was observed with remdesivir?

Bill Williams

On – so Augmenta on the monoclonal antibodies, Dale, you want to – you think you are closer to that. Hey, Dale?

Dale Christensen

Yes, sorry. Could you just for clarity, repeat the question, so I’m answering exactly what you were asking?

Unidentified Analyst

Sure. Just wanted to know kind of what you are seeing in some of the neutralizing and binding assays that were conducted with some of the Augmenta monoclonal antibodies using a TFF formulation?

Glenn Mattes

Yes. So, again, generally, Augmenta has isolated a number of different antibodies. They are testing in a variety – in a panel of different neutralizing assays, starting with pseudovirus then progressing all the way to the active virus. And we are working and will work to formulate the dry powders and deliver dry powders to in vivo as part of the progression to the clinic, but these are fully neutralizing and potent as well.

Unidentified Analyst

Understood. Fantastic. Thanks for taking our questions and congrats on a great quarter.

Glenn Mattes

Thank you.

Operator

Thank you. And our next question comes from the line of Daniel Carlson with Tailwinds Research. Your line is open. Please go ahead.

Daniel Carlson

Thanks guys for taking my questions and congrats on all the progress. First question is just do you guys intend to undertake any new offerings from the shelf registration in the near future?

Glenn Mattes

Yes, thanks, Daniel. So, the filing of the shelf registration, I guess you would categorize it as procedural. We were not able to do that and so the 1 year anniversary of the IPO, so we did that. However, we have – if you look at our statements, we have a lot of working capital, that capital is substantial enough to support what we are doing now. So we have no plans right now to raise additional funds. So it’s there. And I think it’s good business to have it in place. It gives us an opportunity to be opportunistic should we need to be, but right now, our capital is sufficient to support the business as we go forward.

Daniel Carlson

Okay. That’s great. Thanks. And then about your Voriconazole program, I mean, with the number of COVID associated after [indiscernible] cases that have been seen. Is there any chance that you guys with the excellent Phase 1 data you had could be looking at some sort of accelerated approval process on that program?

Glenn Mattes

Dale, could you answer that, please?

Dale Christensen

Yes, thank you. It’s a very good question. We have been talking to both to the FDA or to get information both from industry leaders in that space. We certainly think there is the case to be made. The question is exactly how to define that study and optimize it. And so, we are consulting with some of the industry leaders and the academic KOLs to look into that going forward.

Daniel Carlson

Okay, thanks. That’s great. And then the last question just about the vaccine program with the University of Georgia, it seems to me that there is a lot broader implications of the success you have shown there. And I am just wondering if the other vaccine manufacturers, are you in contact with them? Are they reaching out to you? Does this have the potential to go far beyond Georgia?

Chris Cano

Yes, thanks, Daniel. Our practice is not to discuss transactions that haven’t been consummated. So yes, there is a lot of activity in the vaccine space, both new vaccines, right we are doing with the influenza vaccine at UGA. We are working on some government programs and we are talking to companies about utilizing the technology in a number of different areas. I think at this point, if you were to conjecture, our opportunities to partner with vaccine manufacturers, potentially will fall into second generation. But clearly as we do more and more of these deals and now it’s more and more of these data, which is building a great foundation, strong first and second floor as those deals and opportunities will come.

Daniel Carlson

Okay. Thanks guys. I will jump back into queue. Appreciate it.

Operator

Thank you. [Operator Instructions] And our next question comes from the line of [indiscernible]. Please state your company name and your question.

Unidentified Analyst

Hello, Glenn, it’s Steve [indiscernible]. Congratulations again on such a wonderful quarter. The progress you have made is really exciting. I have one question and that is when might we see some data from USAMRIID?

Glenn Mattes

Chris, can you handle the question on the USAMRIID?

Chris Cano

Yes, sure. Thank you. And thanks Steve for the question. So that work is ongoing. So we are – we have delivered, we have formulated and delivered the monoclonal antibodies. And so that in vitro work is ongoing, the VSV, we are in the process of formulating. So to answer your question probably within the next month or so we will get some immediate in vitro data, but the next step from there would be to seek additional funding to advance those programs.

Glenn Mattes

Thanks.

Unidentified Analyst

Alright. Well, thank you very much. I will get back into queue then.

Glenn Mattes

Thank you.

Operator

Thank you. And our next question comes from the line of Keith Gill. Please state your company name and your question.

Unidentified Analyst

Yes, Keith Gill, [indiscernible]. Excuse my voice, but I had to get on the phone. Congratulations, Glenn and to the entire TFF team, really appreciate all your efforts. I have a question for Dr. Bill. Doctor, is there one area that excites you the most in using the TFFP technology?

Bill Williams

Yes, great question. What excites me the most is applications biologics and it’s something that we have worked on for a few years, but really with COVID as I said few minutes ago, with COVID, it really caused us to pivot and explore in depth, just how useful Thin Film Freezing is to biologics. And so that’s what excites me and we have got a lot of resources geared towards biologic as we speak. Thanks for the question.

Unidentified Analyst

Thank you and congratulations.

Glenn Mattes

Thanks, Keith.

Unidentified Analyst

Thank you.

Operator

Thank you. And our next question comes from the line of William Morrison with National Securities. Your line is open. Please go ahead.

William Morrison

Hi, guys. Congrats on all the progress in the quarter. Quickly on Union Therapeutics, how are the milestones going and they come in and stretched out or how are you executing on that? And then on the larger pharma potential JDAs, where are the timelines on those? Thanks.

Glenn Mattes

Yes. Hi, Will. Thanks. So, we are really doing very well with the Union products where we have taken both the oral and powder. We are going to have a pre-IND meeting for an IND and as quickly as we can get into our first-in-human trials. So, things have been progressing well there. And on the collaborations that we are working on, Will, as Chris described, now we are really entering into the green zone or the red zone to kind of getting a football analogy here, we still got to get him over the goal line. But once you transition into in vivo testing and these companies can actually now that they have got a formulation that they like and we have been able to do things that frankly they didn’t even expect us to be able to do from a formulation standpoint. We cross over into in vivo testing. So we are getting we are at that stage on a number of really important fronts, like all of our deals are important and they are all going to be very positive for us. But as Chris described what we are really approaching that point on an siRNA platform, on mRNA platform and some others. So I don’t want to give you specific date, because we are frankly not sure and I would rather under-promise and over-deliver, but what we are really getting into the red zone, I am very, very excited about it. Look, just to maybe address all of you on the phone, I am sure you can sense the enthusiasm of the team here. Personally I am extremely bullish about our future. We have incredible potential for short, mid and long-term value creation as we advance our internal pipeline and we expand our partnerships. I believe this is really the tip of the iceberg. And we were just working on these opportunities and paying really, really close attention on the execution to our internal opportunities for [indiscernible] niclosamide and now the Augmenta monoclonals.

William Morrison

Great. Thanks a lot. Great work, guys.

Operator

Thank you. [Operator Instructions] And our next question comes from the line of Doug Russell with Brown Harris Stevens. Your line is open. Please go ahead.

Doug Russell

Hi, Glenn, I want to congratulate you and thank you on an amazing first year as a public company. You have done a hell of a job and we appreciate it. My question is about I think you were talking about doing a three product deal with DARPA. And I am wondering how that is progressing, if it is?

Glenn Mattes

Yes, we have alluded to DARPA partnerships in the past. And for those of you that have worked with the government before that it takes a while to get these things finished. That’s a T crossing and I dotting before you get a signature. So we are in that process, again, no new percent guarantee that the signature will come. But we are also again waiting pretty much on the goal line with that one. So hopefully that gets done. And we are able to make an announcement about that opportunity in the very near future.

Doug Russell

Okay. And one other question, I know at some point, you were in discussions with Bill Gates and his team about vaccines. I am just curious if you are still talking or dancing with them?

Glenn Mattes

Yes. So we have talked to Gates about a lot of things. There is mutual interest. I would say that at this point, those are still at the discussion stage, nothing has really moved forward to where I can say something is in the immediate offing, but there is lot of interest certainly in what we can do. Gates is focused on a lot of things right now that makes their bandwidth a little bit limited. And frankly, so are we. So we stay in touch. And hopefully, one day something will come of that, but again, we are staying in touch.

Doug Russell

Thank you. I really appreciate it.

Operator

Thank you. And this does conclude our Q&A session for today’s conference. And I would like to turn the conference back over to Glenn Mattes for any further remarks.

Glenn Mattes

Yes, I am sorry, if we didn’t get to answer your questions. You all know how to get in touch with me. And if you do have questions, please do that. I also just want to conclude by thanking all of you for the support again the company and all the people that work here are doing an amazing job. We are really excited. It has been a great year, but it’s only the beginning for us. So, I would ask all of you to please stay well and hard to believe in this 2020 year but we are actually getting into the holiday season. So, I want to be one of the first to wish all of you a very happy and healthy holiday season. I hope we all get to enjoy the holidays in a positive way. So, please enjoy and call me if you want to have any questions and stay well, happy and healthy. Bye.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.



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