John M. Viglotti: Hello and welcome to Virtual Investor Conferences. On behalf of the Life Sciences Investor Forum and our co-host, Zacks Small Cap Research, we’re very pleased you joined us for our quarterly conference. Our next live presentation is from Cocrystal Pharma. Cocrystal is a clinical-stage biotech company developing novel antiviral therapeutics. Please note you may submit questions for the presenter in the box to the left of the slides, and you may also view a company’s availability for one-on-one meetings by clicking Book Meeting in the top toolbar. At this point, I’m very pleased to welcome Dr. Sam Lee, the co-chief executive officer and president, and Jim Martin, the co-chief executive officer and chief financial officer of Cocrystal Pharma, which trades on NASDAQ under the symbol COCP. Moderating the Q&A session is David Bautz, a senior analyst with Zacks Small Cap Research. Over to you, Jim.
Jim Martin: Well, thank you, John, and thank you Zacks for hosting this Virtual Life Science Forum here. I’d also like to say thank you on behalf of Cocrystal to all the investors that have attended and everyone watching this short presentation. What we’ll do is we’ll jump right into some slides. The first one is forward-looking statements to remind people to look at our SEC filings on our website to get the latest and current information on the company. We’ll start with the first slide, which is really an overview of the company and talks about our advanced programs, which are high-value programs. We have norovirus, which is a virus that has an unmet need. There are no antivirals available, and there are no vaccines available. The market’s huge. We also have influenza, which I’m sure everyone’s aware of or had at least once or twice in their life. It’s very difficult, like most viruses, to come up with a good vaccine because it’s constantly mutating. Then there’s no need to discuss coronaviruses too much, and everyone’s very familiar with that. We also have a program that is not only for COVID-19, which we were all devastated by over the past few years but also for other coronaviruses that have the potential to become pandemic.
JM: What we have is a drug discovery platform. This platform was put together, took years, and leveraged the expertise of one of our founders, Dr. Roger Kornberg, who won a Nobel laureate. He went ahead and teamed up with Dr. Sam Lee here and some others, and they worked on a platform to create some of the best antiviral therapies in the world. They looked at these viruses and the families of these viruses and how quickly these viruses mutate and honed in on the replication of these viruses. That’s been an area of proprietary technology in which we have; I would say, optimized to rapidly and very effectively develop very broad spectrum antiviral drugs that are both for current viruses and emerging viruses by attacking, attaching, and attacking the viruses replication area. We have also developed multiple routes of administration; whether it’s an over-the-counter oral pill or someone’s really sick in a hospital, they can get it intravenously. We also have an inhalation, which is a quick and easy way of getting the drugs directly right down to the lungs. Highlights of the company are that we target multi-billion dollar markets.
JM: These are global markets, and we are working on treating these acute and pandemic viral diseases. Our biggest strength is our drug discovery platform. It’s a proprietary platform. There’s none like it in the world. It’s the best developed to create these crystals in a very high definition and a high-volume output to develop some of the best compounds for targeting these viral diseases. Again, we have a couple of clinical programs right now, one of which is pan-viral acid. Its name internally is CDI988 since it’s still a compound, and it’s finishing up phase 1 for both a coronavirus SIS, which includes COVID-19, and also for norovirus. As I stated earlier, no vaccine or therapeutic is available. That’s finishing up a clinical trial, and that’s one oral pill for both diseases. It’s a very interesting and very powerful antiviral drug that we have a lot of hope for. In addition, we have an influenza compound, which we call CC42344. The name might not mean much to you, but this is in phase 2, and some antivirals are out there for influenza.
JM: What we’ve seen and experienced is that there are a lot of mutations that have found a way around these available antivirals. Because of that, we have developed this to deal with any mutations by attacking/attaching. I always say attacking attaching this because it’s the same thing to me. We hit the area of the virus and attach to it to stop the replication. We do this by looking at all strains of the virus and looking for this one highly conserved area in the replication that does not mutate. That tells us if it doesn’t mutate, then it’s necessary. No matter what they do, they can change a lot of things the virus can do, but it must have this area intact, and that’s the area that we attach to or attack. By doing that, we’re able to stop that replication. You stop the replication; you stop the virus. It stops replicating viruses; I mean, one of its biggest strengths is its ability not only to mutate, but also it’s their ability to quickly and rapidly replicate and overwhelm the body.
JM: Anyways, that’s what we go after. We have a great team, which is important. Our team knows what they’re doing with seasoned leadership in the biotech industry. You can go to our website and look at our board of directors. You can also look at our scientific advisory board, and you’ll see that we’re prepared to leverage the success of some of these compounds. These guys know what they’re doing. We also have a very cost-efficient operation. We are lean and mean. We have under 15 employees, and we subcontract out. We have a very core knowledge within the company, and that is leveraged to really be able to keep the cost, which most companies can get out of control. We are able to really keep a tight watch on those and make sure that every dollar spent of our investors’ money is wisely spent. We also have a very clean capital structure. We only have common stock outstanding, which means we don’t have any warrants outstanding, we don’t have any preferred shares outstanding, and we certainly don’t have any debt on our books. It’s a very clean company.
JM: This is a high-level view of our programs. As you can see, we’re really focusing on norovirus, coronavirus, and influenza. But we also have early-stage programs for additional influenza DAB, and we also have it for respiratory diseases in general. We will look to develop these leaders, and then we have additional compounds that look very promising coming along here. As I said, we really target the replication area, and the way we do this is by direct-acting antivirals that go right to the virus and attach to the virus to stop that replication. We do this by using our X-ray or cross-crystallization technology to actually develop a crystal of the virus. With that, we run high X-ray beams into it to get a near-atomic view of the virus. That’s essential to be able to know what the virus looks like, how it functions, and where you want it attached to. We directly attach ourselves to this virus to disrupt it. As I said, when you stop the replication, you stop the virus from growing, and the body can finish off whatever’s left.
JM: We’ve already proven this to be a very effective method. We’re very, very optimistic that our trials are going to show fantastic results. There is a huge need for antiviral therapies. There are a number of viruses out there. Most people know of coronaviruses, influenza viruses, that become pandemic. But there are other viruses. It’s just a matter of the mutations that these viruses go through. Viruses are constantly mutating. It’s nature’s way of survival. Bad mutations die off, good mutations, and I say good, I mean good for the virus. They tend to make the virus spread faster and grow, sometimes even causing death. The good news with that is a lot of times, viruses that cause death eventually go away because it’s not in the virus’s interest to cause death because then it loses its host. But it does happen. The main point is there are a lot of mutations in these viruses that you’ll constantly hear about. That’s why, even with coronavirus, you heard of all the mutations and strains that kept hitting us during the COVID-19 pandemic.
JM: It wasn’t COVID-19; it was a number of Delta variants. That’s still going on, and it’s going to go on for a long time. That’s why we develop our compounds to be very broad spectrum to take on the whole family and, again, target that area within the virus that doesn’t mutate. We’ve already tested the whole family, and we make sure that we find the essential area. With that, I’ll turn it over to the rest of the team. We’ll go through a few questions in this, along with a fireside chat with David Bautz here.
David Bautz: All right, thanks, Jim. That was a great overview. I want to remind everyone who’s watching live that you can maximize the video window right now for the Q&A if you want. I want to start with the norovirus indication if we can. Basically, why is norovirus such an attractive indication for Cocrystal to pursue?
Dr. Sam Lee: Jim, I’ll take that question. Happy to answer. As Jim presented the norovirus during the slide presentation, there is no vaccine or treatment for noro-infection. If you look at the number of cases annually, at least 700 million norovirus infections worldwide, in the United States alone is close to 20 million cases. We’re dealing with a pretty serious viral disease. Unfortunately, this virus also could cause a pandemic viral infection. That’s a pretty serious unmet need. The way we develop the compounds using our platform technology is to look at the highly conserved region of the drug target, in this case, protease. I looked at the multiple viral proteases, which allows us to look at not only norovirus. This compound is very potent against coronaviruses, enteroviruses, and human rhinoviruses. The indication is that this compound also has GI-targeting activity. In other words, when you develop an oral drug, the drug can be observed through the stomach and intestine. Norovirus infection occurs in a small intestine as well as a large intestine.
SL: We have targeted delivery aimed at the infected site. This brings a pretty significant benefit.
DB: Okay, thanks, Sam.
JM: If I add to that, David, I also want to remind the audience that there is no vaccine or therapeutic out there. It’s a $60 billion market with norovirus, and our compound is also showing prophylactic tendencies, where you can actually give them the drug and have them protected for a few days, which is very significant to the cruise ship industry.
DB: Thanks, Jim. Can you talk about CDI988’s current development status and the next steps?
SL: Sure. We are currently conducting a phase 1 study. This is a healthy volunteer study. We’re looking for a safety profile and tolerance. We completed the phase 1 study, which was almost complete, with a single and multiple ascending doses. Based on the current SAD and MAD cohorts, we see a favorable safety profile, no discontinuation, and no serious AEs. We will wrap up the last cohort with the highest dose, 1200 milligrams. Once we finish that dose, we will move to the next study, which is a human challenges study.
DB: Moving on to the influenza indication, can you update us on where that program stands?
SL: Yes. Influenza oral PB2 inhibitor CC42344, the compound. We’re currently conducting a phase 2a study. This is a human challenges study. The initial data suggest that the infectivity rate is poor. That means you have healthy volunteer studies and recruit just the unaffected healthy volunteers for studies. But in phase 2a, healthy volunteer studies, you recruit healthy volunteers and infect healthy volunteers with the viruses. 42344 cases, we were infected with the H3N2 virus. The infection rate is really important in obtaining clinically meaningful data. But unfortunately, the infectivity rate was poor. We continue to conduct the trial.
DB: Regarding the target markets for the influenza program, what are the major markets you’ll be looking at, and what drug could possibly be used there? Will the company pursue that as part of the strategic national stockpile?
SL: Yes, I’ll make a quick comment, and Jim could also add the comment. One of the challenging issues in the influenza field is that the first antiviral compound, Tamiflu, and the second molecule, Xofluza, both have drug resistance issues. Currently, the compound is a monotherapy using Tamiflu as the standard care for influenza. However, Xofluza, another oral drug that induces the drug resistance mutation pretty rapidly, is based on a published phase 2a study that patients with one drug treatment develop a mutation. That mutation does not observe naturally occurring influenza strains. That’s a concern, drug-induced drug resistance. More importantly, once the virus produces the drug-resistance mutation, it infects the host cells. As a result, the circulating influenza virus could cause most of them to develop resistance.
SL: That’s the public health issue. Our goal is to develop novel compounds, such as oral PB2 inhibitors. Its compound is potent against the seasonal and pandemic influenza strains and, more importantly, has a high barrier to drug resistance. Based on our non-clinical studies, we could not isolate drug-resistant strains. That’s a really important milestone for this compound. As Jim mentioned, we have another program, the influenza program, which also targets replication enzymes. Our ultimate goal would be developing monotherapies and combining two as a combination therapy. In infectious diseases, this would be an ideal drug for treating viral infections, particularly drug-resistance issues. Jim, do you want to make any comments?
JM: Yeah, the market size remains very large. It’s a multi-billion dollar market because there’s a couple of reasons. First, vaccines are very important, but vaccines have to be produced ahead of time, which means you have to predict which strain of the virus to start developing these vaccines. People who get their annual flu shot still get it because of the various strains. And that’s one of the biggest problems with viruses, in general, is their mutation. It isn’t easy to come up with a good vaccine. But yet, they are important to be out there. You have to have the one-two punch to get a disease mitigated. That’s why you must have a therapeutic, especially for those who get sick, either with or without the vaccine. The way our drugs are developed, as I said, we get the atomic roadmap of this virus and overlay every strain we can find to find that one area was necessary for replication. We’re creating very broad-spectrum drugs.
JM: As Sam said, the competitors already have issues with what’s out there with both drug resistance and mutations causing those issues, and we believe that our compound would be much stronger. That’s why we believe we have a very strong need: because of the size of the market and the inability to suppress this virus with vaccines alone. Especially since, as I said, you have to predict what is going to be the prevalent strain ahead of time. And therapeutics are different in that we go right after a direct-acting antiviral, go right to the virus, stop its replication, bring down the viral load, and then the body finishes it off. We have a superior drug that we’ll be bringing to market. With the market size, you only need a small percentage to succeed. However, we will go for a very large percentage of that market.
DB: I was going to say that we’ve had many questions from the audience. I want to make sure we can get to some of those. We had a couple of timelines for the phase 2a trial in influenza. Please comment on that.
SL: We are investigating a new virus or batch of H3N2 to increase the infection rate with the human challenges study. At this point, we’re estimating that this trial will most likely continue this year, 2025, and we hope to deliver the positive phase 2a data this year. We don’t know exactly when the top-line data will be available.
DB: There was a question about prophylactic trials. This is probably related to the norovirus indication. Are you planning on doing prophylaxis trials for that drug?
SL: The short answer is yes. The opportunities for prophylaxis and norovirus are huge. As discussed, the prophylaxis approach is important for the cruise ship or nursing home. Any place that potentially you have a norovirus outbreak, you want to manage the infection. Pre-prophylaxis and post-exposure prophylaxis are important. We’re trying to develop a prophylaxis trial design combined with the treatment design. Before actual noro-infection, we will treat the subjects with our drug, and then we’ll follow up. We plan to initiate the prophylaxis and treatment study this year.
DB: Do you anticipate partnering with either of your drugs?
JM: We are discussing partnering to advance these drugs in the private and public sectors. Our board also supports us.
DB: Okay, can you comment on the company’s current cash position and the cash runway?
JM: Sure. Our cash is projected to take us through 2025 this year, mainly focusing on non-dilutive funding, but we also have the markets available to us if needed. But before we do that, we want to ensure we have a good pathway forward. We’re waiting to get some of the data back; moving forward would bring more cash into the company. At this point, we have enough cash that we don’t have to worry about. It is planned for during the year we would bring in more cash.
DB: Okay. And now that we’re getting towards the end, I’d like to wrap up. Can you summarize why Cocrystal is a good investment opportunity right now?
JM: It’s a good opportunity because we have a proven track record of success. So far, clinical trials have been successful. We do have a very strong science team within the company that’s developing compounds like no other company that’s out there in the sense that these are very broad-spectrum, very direct-acting antivirals. As we stated earlier, these are very necessary compounds. I mean, right now, we’re getting by. However, it could be much better with the drugs that could be available and will be available in the future. Cocrystal is on the edge of providing that. Again, we have a very strong board that supports the company, a very strong scientific advisory board, and Sam Lee, who’s very strong in developing this platform, and we have partnerships available. We have multiple paths available to move forward, and I think we have these multi-billion markets that we will look to move into. So that’s a good reason. The slide that’s currently showing also summarizes some of what I just said, and we’ll leave it at that.
JM: But you know, always feel free to reach out to us through our website if you have any questions or want to follow along with the company. You can sign up there, get copies of our releases, and stay along with us on this journey to success.
DB: All right, sounds good. Jim and Sam, thanks for presenting today and for joining us.
JM: Thank you, David, and thank you, Zacks.
DB: Thank you.
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