TRANSCRIPT OF EVENT
Deniel Mero
Welcome to PropThink’s First-Ever Digital Conference. My name is Deniel Mero, Editor of PropThink. I will be hosting today’s event. PropThink is a biotech focused investment newsletter. PropThink Digital Conferences is a platform designed to give you access to subject-matter experts, including prominent investors, executives, scientists, and others with unique insights at the healthcare investing.
Roberto Bellini is a healthcare investor and entrepreneur. He is currently CEO of Bellus Health and Vice Chairman of Biotech, Canada. Prior to Bellus, Mr. Bellini was Executive Vice President at Picchio Pharma, a healthcare investment fund partly owned by Mr. Bellini’s family. Bellus’ Chairman, Dr. Francesco Bellini sold BioChem Pharma to Shire in a deal valued at over $4 billion and is a major investor in Bellus.
We were intrigued when we learned that the Bellini’s are betting heavily on an early stage compound for chronic cough. Merck paid $500 million in 2016 to acquire a compound with the same target to Bellus, we invited Roberto Bellini to explain why he is betting on Bellus Science while he sees an opportunity in chronic cough and how Bellus is aiming to create value for its investors. We will open with a presentation by Mr. Bellini and close with Q&A. [Operator Instructions] Mr. Bellini, you have the floor.
Roberto Bellini
Thanks, Deniel. Hi everyone. It’s a real pleasure to be here. Thanks for coming on the call today on the webinar, I am super excited and definitely want to make this as dynamic as possible. So, I am going to go through the presentation, it should take about 20 or 25 minutes, and then really want to spend as much time as possible doing Q&A. So, think about your questions, put them into the box and that’ll be our [test] to interact at that level.
So, before we get started. This is our forward-looking statements slide. I will be making a number of those statements today during the presentation. I do encourage you to read the slide on your own time. I also encourage you to read the risk section of our annual information form before making any investment decision. So, on the next slide, it is an overview, I’m going to spend a lot of time talking about BLU-5937 for chronic cough, this is our lead program. It is our core focus of the company. It is an exciting program. It is a large population, high unmet medical need and then we will be talking to you a lot about cough today.
It is a preclinical asset that is going into the clinic this year, but what is really nice here is that it is targeting a clinically validated target, very clear and efficient path to driving value for shareholders and we will be having data this year. So, definitely an exciting time for us at the company.
The company is a TSX listed company on the [main] board. The ticker symbol is BLU. I think another big highlight of us at the company is that our plan is fully financed. We completed our financing in December of last year, a $20 million financing and I’ll talk to you about that in more detail, but more importantly that fully finance is our plan through multiple clinical studies, so through Phase I and through Phase II.
Let’s talk a little bit about the team. We have a very experienced team that is working on the project as a team that has worked together for a number of years, executed very well on even larger scale projects than the one that we’re talking about currently on-time, on-budget and I think even just as importantly we are very hungry to be successful and we think that we have got a winner on our hands with BLU-5937.
On the corporate governance side, Board of Directors, we have a number of very experienced directors and maybe I can highlight a couple in particular that recently joined the company. I mean, Deniel kind of highlighted Dr. Bellini, my father as the Chair and he has obviously had a lot of success in the field. But we can also talk about Youssef Bennani that brings a lot of R&D experience to the company. He ran R&D innovations at Vertex in Boston for a number of years, moved up to Montréal where he ran the Vertex Research Facility so 100% team for over seven years. So, very good addition to our board of directors. He joined about 12 months ago.
Dr. Desjardins joined little bit under six months ago. She is the CEO of Clementia. Clementia is arguably one of Canada’s top biotech companies recently did a NASDAQ listing just last year, $110 million NASDAQ listing. So, definitely a model that we want to emulate at Bellus as we grow.
So, let us talk about the problem that we are addressing, which is chronic refractory cough. Chronic cough itself is defined as it lasts for longer than eight weeks. There are a lot of chronic coughers in the world. There is about 10% of the adult population in most developed countries have chronic cough. So, in the U.S. it’s about 26 million patients with chronic cough.
Chronic cough can get triggered by a number of different factors. So, there is some form of underlying condition that’s causing that cough it can be pulmonary condition like asthma. It can be something like acid reflux taking certain drugs can cause chronic cough, allergies can cause chronic cough, and for patients that where you can identify that trigger, and you can treat that trigger and remove it. That is the standard of care for those patients. So, in 90% of chronic cough patients that works very well for them as you you can stop the chronic cough by addressing that underlying condition.
It is really in 10% of chronic cough patients who are still very significant patient population 2.6 million patients, these patients have refractory chronic cough. So, physicians understand what they have. They are trying to treat it, but either they are not responding to therapy or there is no therapy for that underlying cause and they continue to cough. So, they can cough for years at a time or they could be idiopathic. So, physicians do not know what’s causing that cough. And these patients are coughing long term, like I said years at a time. A lot of these patients cough 20, 30, 40 times an hour. It causes physical pain for these patients.
So, they can have chest pain. Some of them, severe patients can get cracked ribs. They have trouble sleeping at night. Their spouses have trouble sleeping at night, but in – since we’ve started this project and it has been about 15 months now that we have in-licensed the project. I have had the chance to speak to a lot of chronic cough patients and actually the number one thing that bothers them the most about having chronic cough is really the interpersonal relationships. It is being – it is coughing during meetings, it’s coughing when you are talking to people, it’s coughing on dates, it’s coughing when you go to the theatre. Those are the things that bother them the most. And for moderate-to-severe patients it then becomes – there is a psychosocial element that comes into play where patients start worrying about coughing in those situations they start having anxiety about coughing.
They start not going to the theatre because they are worried about coughing. And so, it really has an impact on the quality of life for these patients. And as you can see, you put those things together, a large patient population, big unmet medical need, big impact on quality of life, and you can understand why this is a multi-billion-dollar market potential for chronic refractory cough patients, and I’ll go through that in a little bit more detail later on in the presentation. But first of all, let’s talk a little bit about what’s causing chronic cough because in these refractory patients. So, the difference between let’s say normal cough and a chronic cough is that duration of time.
So, like I said eight weeks is the duration for chronic cough. Most of us on this call today, including myself you might get some kind of trigger to start coughing. You might get let’s say a cold and over the two-week period where you have a cold you are coughing, but then the cold stops and the cough stops. For chronic coughers what happens is, is that coughing causes damage in the upper airway and that damage causes a hyper sensitization of the upper airway, which means that triggers that normally wouldn’t make you cough start making you cough. So, triggers such as cold air, eating food, even just talking, smelling certain kind of perfumes can cause you to start coughing and that causes you to get even further damage, which means that when the initial triggers removed, so at the end of the two-week period where you have a cold, the cold goes away or you just keep coughing, and you enter a vicious cycle.
At the heart of, you know mechanistically at the heart of this cough reflex is a sensory receptor called the P2X3 receptor. It is heavily found in the upper airway and it’s the one that sends the signal to the brain that then relays back to the lungs to cause you to cough, so very important receptor in this pathway, makes a lot of sense, very rational to be targeting this receptor to treat patients with chronic cough, and that is easy for me to say that it is a rational target because we know that inhibiting that receptor works very well for these patients.
So, there is already a treatment in development that’s Merck’s product MK-7264, it is a very potent P2X3 antagonist. So, it inhabits that cough receptor, cough sensory receptor found in the upper airway, works very well, reduces away cough frequency by 86% in these tough to treat patients. So, chronic refractory cough patients that have had cough for over one year. Unfortunately, it comes paired with a big problematic side effect, 80% of patients have taste alteration or taste loss, partial or complete taste loss, 20% of them actually have complete taste loss. So, definitely an issue, definitely works very, very well on the cough, but definitely very problematic from a side effect profile.
And notwithstanding this side effect profile, just because it is such a big unmet medical need because it works, because it is so effective Merck actually acquired this program knowing these characteristics. In mid-2016, they bought a company called Afferent Pharmaceuticals. The company was only working on this drug before it was called AF-219, they have renamed it to MK-7264 at that time they paid $1.25 billion in total $500 million upfront and at that stage of development it had only completed a small Phase IIa studies. So, they have done a couple of studies with just over 30 patients, but it was so effective even at that point that they were willing to pay a very significant price.
So, let’s talk about why the Merck product has that taste effect issue and it really has to do with the fact that the Merck drug is not only inhibiting P2X3, but it is also inhibiting another cousin receptor called P2X2/3. So, P2X3, if you remember, this is the one that’s heavily found in the upper airway involved in the cough reflex and P2X2/3. So, this is a very similar receptor. This one is heavily found in the taste buds. So, definitely makes a lot of sense that if MK-7264 is inhibiting both of these receptors at their therapeutic dose that patients are having this taste effect, this is important side effect. And I think that’s also what’s creating the opportunity here, the opportunity is to develop a drug that’s highly selective that only inhibits P2X3 to cough receptor and that doesn’t inhibit P2X2/3 or the taste receptor.
And that’s really what we have with 5937. 5937 is a highly selective P2X3 antagonist. It is highly potent inhibitor of P2X3 and is thousands fold more selective for P2X3 versus P2X2/3 and definitely what we’ve seen from a proof- of-concept in the animal is head-to-head versus the Merck product and equivalent reduction in terms of cough frequency and our drug 5937 is having no impact on taste, while the Merck drug is having a significant impact on taste. And I want to take you through these two pieces of data because these are really the two studies that underpin our financing that was done in December.
One is on the efficacy side, so this is a guinea pig cough model. In this model, you take guinea pigs, you put them in a room, you nebulize citric acid and histamine and essentially that causes the guinea pigs to start coughing. You measure how many times they cough in a 15-minute period, it’s quite regular, they cough 20 to 25 times, you can see that on the black box on the control bar and then we have given both 5937 and 7264 head-to-head in this model at increasing doses and as you can see couple of things are very nice, the first of which is very nice dose-dependent reduction in number of coughs as you are increasing the dose of both drugs you are reducing the number of coughs that the guinea pigs are having in this 15-minute period.
I think just as importantly for us, equivalent reduction in terms of cough between the two, between the two drugs, they are both equipotent in the guinea pig. So, it makes a lot of sense that these two drugs are inhabiting P2X3 and having the same efficacy in terms of reducing the number of coughs. Where there is a real difference between the two drugs is on the taste side. And so, this is a rat taste model. In this model you don’t let the rats drink overnight, and in the morning, you present them with two bottles of water. One bottle with regular water and the other bottle has a very bitter agent in it and it has Quinine in it. The rats don’t like the Quinine, and so as you can see on control, which you are looking at here in terms of the Y axis is the average volume of Quinine water consumed. And in the morning the rats go to, they try actually both bottles and they preferentially drink from one bottle as you can see how controlled they drink very little volume from the Quinine water. On a percentage basis, they drink 5% to 10% of Quinine water.
When you give them the Merck drug, they start drinking 3 to 5 times more Quinine water. On a percentage basis, it goes up to 30% to 35% of Quinine water and the reason for that is because they stop being able to differentiate between the two bottles and they have an inability to taste the Quinine. On our drug 5937, as you can see no impact on taste. The rats still have the ability to differentiate between the two bottles and they are drinking preferentially from the regular water bottle at the same rate as on control. So, overall when you look at this proof-of-concept, I think it really validates the project hypothesis that we came into this with of having a highly selective P2X3 antagonist that doesn’t inhibit P2X2/3, same efficacy in the guinea pig model on cough and on the taste side, we are not having an impact on taste, while the Merck product is having an impact on taste.
I know that developing a drug is not just about efficacy, it is not just about differentiation, even though that’s the key thing that we have here, high selectivity and high potency at the P2X3 receptor, but there are a number of factors that come into play in terms of drug characteristics and overall project characteristics and we really feel that BLU-5937 has these overall characteristics to be a best-in-class profile drug for chronic cough. We are expecting this to be twice daily, oral dosing that’s where we are projecting based on what we’ve seen in the animal. The Merck product is also twice daily oral dosing, no safety findings of concern to date, we’ve wrapped up all of our preclinical talks, everything is clean, very nice safety margin. Overall, this class up until now has also been very, very clean. The Merck drug has been tested up until 12 weeks in several hundreds of patients. No other safety findings of concern and the only real side effect seen has been the taste side-effect; broad and comprehensive IP portfolio, its composition of matter it’s already granted in the U.S., it’s granted in the EU, it’s on its way to be granted in Japan. It’s long dated as well and goes out to 2034 so strong IP in place with this program. Definitely also targeting a large patient population and let me go through that in a little bit more detail on the next slide.
So, as I mentioned in the intro, when you are looking at developed countries, industrialized countries, usually you get somewhere around 10% of the adult population having chronic cough. The real primary addressable patient population though are those chronic coughers that are refractory or idiopathic, that have been coughing for over one year, that’s about 10% of the 10%. So, in terms of the U.S. numbers that’s 2.6 million patients. If you extrapolate that out to the major pharma markets, so like EU top five, Japan, you’re looking at over 6 million patients with chronic refractory cough. So, definitely a large patient population. And this is all work, what you’re seeing on this slide both in terms of epidemiology as well as on the payer pricing side. This is all work that was done by Torreya Insights, a market research firm based out of New York that does a lot of work for big pharma, big biotech. And in their work on the pricing side they have done a comparable product analysis as well as discussing with payers in the U.S. on the comparable product side, they looked at products that were in large patient populations, where it was like a non-life-threatening indication, so chronic cough is not a life-threatening indication either and where there is definitely cheap competition. So, like in chronic cough, you get stuff like at the pharmacy that doesn’t work very well. So, they really zoned in on those kinds of comparables. I think LINZESS is a nice comparable, that one is at $300 per month. It is for chronic constipation, which has many similarities to the chronic cough, big population, non-life-threatening, cheap kind of alternatives that don’t work so well. But overall, when you look at the overall comparables as well as payer discussions, pricing somewhere in the $300 to $600 per month range makes a lot of sense.
So, you put together this large addressable patient population, reasonable pricing in the $4,000 to $5000 to $6000 per year of treatment you can understand why this has the potential to be a multi-billion dollar, multi-billion dollar market and it also gives you a triangulation of why Merck is ready to pay $500 million upfront and $750 million in milestones for a product that’s completed Phase IIa study.
So, how do we create value? I think it’s one of the best things about this program is that there is a very efficient way of creating value here, something that doesn’t take a lot of money and that is going to be relatively quick. So, as I mentioned a little bit earlier on the presentation, we have completed all the Phase I enabling study, so all the toxicology studies are completed. We are in the midst of wrapping up on our clinical trial application, which will go in before the end of this quarter. We are going to start our Phase I study in Q3 of this year and get data in Q4 of this year. This is an important study for us and in the next slide I’ll go into a little bit more detail on the Phase I study, but it’s going to be very important not only for the traditional kind of measures or reasons of doing a Phase I study, but because we will be getting a very, very good sense on the taste side and taste effect side in this study which is our big differentiating factor versus Merck.
We’ll move into a Phase II study in 2019. This one will be in chronic cough patients. Here we won’t reinvent the wheel. We are planning to do a very similar study to what Afferent did to convince Merck to buy them. This study is a crossover design study or the one that Afferent did was a crossover design study with a little bit over 30 patients, and so in total that will probably take somewhere around 9 to 12 months between like recruiting, running the study and getting data, so also very efficient in terms of getting key data out on the efficacy side.
So, let’s talk a little bit about that Phase I study. So, as you can see here, I think it is a very classical design in terms of single ascending dose and then multiple ascending dose assessing safety, tolerability, measuring drug plasma levels to better understand what dose to go into for the Phase II study. Overall we’re talking about between the single ascending dose and multiple ascending dose, 90 healthy subjects, I think this is an important sample size because we will be looking for taste effect in this study and if you remember in the Merck study they saw 80% of patients having some form of taste alteration, partial or complete taste loss. 20% having complete taste loss. This is really what we’re going to be benchmarking ourselves against in this study. We want to drive that number down significantly. I think, I don’t think that we’re going to really get down to zero, but I think that we can definitely get it down. We can definitely get that down significantly from the 80% level and really show differentiation versus the Merck product in this Phase I study and I think that that is why this Phase I is such a value driver for us. And as I said, we’re expecting data on that by Q4 of this year.
So, we do have other programs. I haven’t mentioned them up until now because the core focus of the company is really on chronic cough and 5937 that’s really the star here. We do have three other programs that we don’t actually run ourselves, so, they’re all partnered programs. Those partners take care of these programs both financially and as well as from an operations perspective. They are all interesting indications. They already are moving into the clinic. So, I think definitely here where the value is for our shareholders, is that we have royalties and/or revenue share on all three of these programs and that’s all essentially three [upside] [ph] compared to the cost because we’re not putting any kind of resources on these programs.
So, if we take a look on the stock side, as I mentioned earlier we completed a $20 million financing in December. It was an important financing for us on a number of different levels, 60% of that financing was done by U.S. healthcare institutions. So, very smart investors came into that financing. I think that that really validates our story and our prospects going forward. I think importantly that financing was a very clean financing. There were no warrants. It was all equity and at a small discount to market, which means that our cap table is a very clean one. There is 119 million shares basic, 132 million fully diluted, the only difference there is the stock option plan. And overall based on our stock price today gives us a market cap of around 65 million, 70 million market cap. I think just as importantly though that $20 million gets us now at March 21 is 21.7 million, but we’re fully financed all the way through Phase I and Phase II, which I think is extremely important from an investor perspective.
So that completes the presentation. Thanks for listening in so far. I’m happy to kind of like move into the Q&A section and happy to answer all the questions that you have. And before I do that I do want to highlight, I think that I want to highlight the fact that this is going to be an exciting year for us. We’re going to be moving into the clinic. We’re going to have data by end of year, and even if I look over a 12-month period we will be starting the Phase II study within that period kind of in 2019. So, definitely entering a very news flow rich period that’s going to be exciting for the company. I encourage you to connect with us whether that is through Twitter, myself or the company, on LinkedIn or add your emails to our mailing list, that’s the best way to connect with us and stay in touch as we keep driving forward and creating value for shareholders.
Deniel Mero
Thank you for the presentation Roberto. We will now start the Q&A portion of this event. As a reminder to our audience you may submit a question using the text box at the bottom right hand corner of your screen.
Question-and-Answer Session
Q – Deniel Mero
So, I will go ahead and ask some questions that were asked beforehand, before the presentation. The first question, Roberto, an investor asks, how big of a hindrance is Merck’s taste alteration? Is taste altered only during the duration of the treatment?
A – Roberto Bellini
Yes. So, that’s a really important question because that’s how we’re differentiating ourselves versus the Merck product and definitely when looking at it from a couple of perspectives, so one, in terms of the data that Merck’s presented themselves, I think it is very clear that this is a big issue. As I mentioned, 80% of patients at the effective dose had some form of taste alteration, whether that is taste alteration, partial taste loss or complete taste loss, 20% had complete taste loss over the 12-week duration of the study, 10% of patients at the effective dose dropped out of the study because of the taste effect in our discussions with physicians.
If you’re thinking about this as a chronic therapy that you have to take forever, 10% quickly turns into 30%, 40% long-term. So, definitely very, very problematic and I think that that’s the other side when we talk to key opinion leaders, when we talk to investigators that were involved in the study. They definitely identified this as a big issue in terms of keeping patients on study medication.
And for the second question, in terms of, is the taste only altered during the duration of the treatment? It is. So, if you go off therapy, your taste buds, your taste comes back. Unfortunately, from what we have seen so far, the cough also comes back. So, you really have to pick between one or the other.
Q – Deniel Mero
Okay, cool. And another question here. How do you see preclinical results translating into the clinical trials?
A – Roberto Bellini
Yes, so what we know right now, I think that the best kind of translatability, if I want to put it that way, is from Merck itself. So, we know that their product works very well in the guinea pig efficacy model, and that translates into an even bigger effect in humans. So, and our drug is hitting the exact same receptor on the cough side. So that’s why we’re positioning this as a validated target and it makes a lot of sense to be looking – to be targeting the P2X3 receptor as for ourselves as we are going into our own studies.
Q – Deniel Mero
Okay. Next question. What can we expect the company to present at the conference in London?
A – Roberto Bellini
I think, I may have actually missed that in the presentation, so I’m happy someone brought it up. We will be making a presentation at the largest Cough Conference. It’s a conference called the International Symposium on Cough. It’ll be taking place in London from June 27 to 29. We’ll be doing a 20-minute podium presentation.
Unfortunately, they – this is still a relatively –kind of like a huge conference in terms of number of people, but they don’t have like a webcasting service, so it won’t be webcast, but we will be making the presentation available online right after we present. Most of the presentation will be around preclinical data.
So, you’re going to be seeing – we’re going to be doing a recap of some of the data that I’ve presented to you here, but we will be showing additional data that we’ve generated as well on the preclinical side. So, I think, it should be – it will definitely be very interesting from that perspective and definitely round out [ph] our preclinical proof-of-concept.
Q – Deniel Mero
Very good. Okay. You mentioned the raise you guys did back in January – sorry, in 2017. Which U.S. investors took part in that financing? Then, as a followup to that, I just wanted to know what percentage of funds came from investors and if any insiders also took part?
A – Roberto Bellini
Yes, it’s a good question. So unfortunately – it’s not public right now who participated in that financing from the U.S. institutional side. What I can say is that I think that we’ve got some really smart, very sophisticated experienced investors. It’s a mix of VCs that used some of their public company allocation to invest in the transaction as well as public healthcare investors that did a little bit earlier stage and that could do preclinical companies.
I’d say that, if eventually when it does become public, these would be — there are names on that list that people in this space that follow biotech would recognize and call them Blue Chip investors. And then on the insider side, about 10% of the financing was done by – was done actually – yes, 10% — 10% of the financing was done by either insiders or family office participants, so about $2 million in total, so pretty significant participation from insiders as well.
Q – Deniel Mero
That’s good to hear. Do you have any plans, Roberto, to list in the U.S. like the NASDAQ to up-list or even upgrade your current OTC listing?
A – Roberto Bellini
Yes. So, we definitely have plans to go to NASDAQ. I think, it’s really just a question of timing and when we want to do that and do that at the right time. Obviously, the program is still at this stage. Preclinical will be in Phase I this year. We’ll have results by the end of the year in Phase I. I think an ideal kind of timing or where the window starts to open to think about doing a NASDAQ listing is post Phase I.
I think, probably an ideal timing may be in the middle of Phase II. I think, even post Phase II that could make a lot of sense. We’re in the midst of talking to a number of U.S. bankers right now that are helping us advise and think through that strategy, but definitely that’s – our goal is to eventually list on NASDAQ, and it is really just a question of like, when is the optimal time to do that.
And then in terms of the second half of the question on upgrade to the OTC listing, this is something that we’re thinking about. I think, frankly, considering the kind of like timeline, we think it makes a lot more sense right now to think about doing a NASDAQ listing. But if we take a longer-term timeline on NASDAQ, we may also – we may think about doing and up-listing on the QX before doing the NASDAQ.
Q – Deniel Mero
Okay. Moving onto some competition, do you have any comments on Menlo’s cough program, ticker there is MNLO? And do you see any other relevant competition in this chronic cough space?
A – Roberto Bellini
Yes, I think that what’s interesting from a competition perspective is that, from my perspective, I think competition is almost validated – is further validating this space. I think, it just goes to show that this is a big market, there’s lots of patients, there’s a big unmet medical need. There’s space for multiple agents, multiple mechanisms of action. I think that when you talk to key opinion leaders in the field, I’d say that, P2X3 is at the top of the field right now. It’s shown the best data in humans. It’s dropping cough by a very big rate, 85% at Merck’s effective dose.
So, this is really kind of like at the top of the list in terms of mechanisms of action, but there are other companies that are looking at other mechanisms. Menlo is one of those, so they have an NK-1 antagonist, so does another company called NeRRe Therapeutics. These are both – well, Menlo is public now and NeRRe is a private company based out of the U.K.
While Menlo has not run a study yet for their NK-1 antagonist, so it’s not as easy for me to comment on their specific program, and they haven’t released any animal data. It’s easier for me to comment on NeRRe’s NK-1 antagonist. So, their NK-1 antagonist was run in a relatively small study with cough patients. It was an open-label study, so it wasn’t compared to placebo, but they showed a 35% to 40% reduction in cough frequency.
So, obviously, not nearly as high as the 85% seen by Merck. And secondly, it’s an open-label study. We know that there’s a placebo effect in cough, so there’s probably some portion of that 40% that’s a placebo effect as well. So, from our perspective, we see NK-1 antagonist as something that in the long-term may be complementary or that may be second in line for difficult to treat patients, but right now, P2X3 is really at the top of that list.
Q – Deniel Mero
Okay. Another investor asks here, has the company published their preclinical data on any scientific journal? And if not, why?
A – Roberto Bellini
Yes. We haven’t published the data yet, and there’s a really good reason for that. It’s a competitive one. So, as probably most of you know that when you’re publishing in a good journal, they’re asking you to disclose the structure of your molecule. We have not disclosed our structure yet publicly. We’d rather not have to do that or at least delay that as long as possible, and that’s why you see a lot of companies actually wait till clinical data before publishing.
So, we’re definitely going to be looking to publish our clinical data on the Phase I, Phase II. We’re also considering to publish some preclinical data, but we don’t want to do that in the, kind of like in the immediate future just to give us – to continue giving us a little bit of a competitive edge and not disclose our molecule.
We will be doing the presentation at the Cough Conference and presenting an abstract there that will be – that data will have run through the selection committee. But as of right now, we don’t have any short-term plans to publish any of the data for the reasons I mentioned.
Q – Deniel Mero
Okay. Is your plan to partner this candidate? If not, how much do you think it’s going to take to run a trial, so you’re funded for the next two years, which I think takes you to Phase IIa? If you are not partnered by then, Phase II, Phase IIb and Phase 3, any projections there on how much it might cost?
A – Roberto Bellini
Yes, I think, for us, our primary exit strategy, and for sure, we have Plan B, Plan C, but primary exit strategy is to exit through an acquisition of the company post Phase II. We think that that’s the right timing for the company to get acquired by a big pharma, big biotech. We know that that was a good timing for Afferent to get bought by Merck.
So, I think that that makes a lot of sense. And we knew –we also know that there was a lot of demand. There was a very robust auction in terms of the Merck acquisition of Afferent, so we think that there’s a lot of other big pharma and big biotech companies that were interested in Afferent and that would be interested in this program post Phase II results. And in terms of the cash necessary, like I mentioned earlier, we have – we currently have the financing in place to take us through the Phase I and Phase II studies.
Q – Deniel Mero
Okay, great. I know this is not a big focus for the company, but what’s the rest of the pipeline worth? You’ve made reference to it there, I think on one of the past slides, slide 16?
A – Roberto Bellini
Yes. I mean, there’s a reason why – there’s 19 slides on chronic cough, and one slide on the rest of the pipeline. I’d say that that’s kind of like a good indication of the relative worth of the three other programs versus the 19, or definitely at this stage. I can also say that the investors that came into the last financing did almost no diligence on the pipeline compared to the chronic cough program.
There has been a little bit of development on the pipeline since then. AMO-01 has actually moved into a Phase II study, it’s not even updated on the slide. They just announced this last week, but they have started a Phase II study, so that’s a positive development, but that Phase II study will likely take 18 to 24 months to read out. So, there’s no short-term value drivers in this pipeline. There may be a little bit of news flow, which I think is always good, but not a lot of value drivers short term.
Q – Deniel Mero
Okay. And last question here, Roberto, what kind of valuation have U.S. bankers indicated for Bellus post Phase I results expected in Q4?
A – Roberto Bellini
I mean, that’s a tough question for me to answer. So, I think the way, maybe I could kind of give you a sense of that is really if you think about it in maybe another way, maybe we could start with the Merck acquisition of Afferent as a really good comparable. I think, it’s a direct comparable to our probable exit valuation post Phase II.
Frankly, I think that maybe we could even do better at that point, because the field may be even more further validated. The indication may be further validated, but if we could – if we take that as kind of like a starting point, you know $500 million upfront, $750 million in milestones after Phase II data.
I think that then you kind of work your way backward to post Phase I, you say how much is the Phase I worth, how much is it worth to differentiate yourself from the Merck product on the taste side when you have a validated target on the efficacy side, and how much is it worth to like kind of lock in a number of drug characteristics in the Phase I kind of like other safety, expected dosing. I think that there’s a lot of value in Phase I. So, I think that we will be making a significant jump towards that exit value, but it’s tough for me to give an exact number.
End of Q&A
Deniel Mero
Fair enough. Okay. Well, Roberto, thank you so much for your time. I think all these answers and presentations prove to be very, very helpful. This concludes the presentation and Q&A portion of our event. As a reminder, we are not Registered Investment Advisors. Nothing in this presentation should be construed as investment advice.
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