RedHill Biopharma (NASDAQ:RDHL)(TASE:RDHL) CEO Interview

final 2Dror Headshot

RedHill Biopharma
(NASDAQ:RDHL)
(TASE:RDHL)
CEO Dror Ben Asher

 

About RedHill Biopharma Ltd: RedHill Biopharma Ltd. (NASDAQ: RDHL) (TASE: RDHL) is an emerging Israeli biopharmaceutical company focused on the development and acquisition of late clinical-stage, proprietary, orally-administered drugs for the treatment of inflammatory and gastrointestinal diseases, including gastrointestinal cancers. RedHill’s current pipeline of proprietary products includes: (i) RHB-105 an oral combination therapy for the treatment of Helicobacter pylori infection, with an ongoing first Phase III study; (ii) RHB-104 an oral combination therapy for the treatment of Crohn’s disease, with an ongoing first Phase III study; (iii) BEKINDA (RHB-102) a once-daily oral pill formulation of ondansetron with a Phase III study in the U.S. for acute gastroenteritis and gastritis and a European marketing application for chemotherapy and radiotherapy-induced nausea and vomiting submitted in December 2014; (iv) RHB-106 an encapsulated formulation for bowel preparation licensed to Salix Pharmaceuticals, Ltd.; (v) MESUPRON®a Phase II-stage uPA inhibitor, administered by oral capsule, targeting gastrointestinal and other solid tumor cancers; (vi) RP101 currently subject to an option-to-acquire by RedHill, RP101 is a Phase II-stage Hsp27 inhibitor, administered by oral tablet, targeting pancreatic and other gastrointestinal cancers; (vii) RIZAPORT (RHB-103) an oral thin film formulation of rizatriptan for acute migraines with a U.S. NDA currently under discussions with the FDA and a European marketing application submitted in October 2014; and (viii) RHB-101 a once-daily oral pill formulation of the cardio drug carvedilol.

Interview Transcripts:

WSA: Good day from Wall Street.  This is Juan Costello, Senior Analyst with the Wall Street Analyzer.  Joining us today is Dror Ben-Asher, CEO of RedHill Biopharma.  The company trades on NASDAQ, ticker symbol is RDHL, as well as on the Tel Aviv Stock Exchange, same ticker symbol, RDHL.  Thank for joining us today there, Dror.

Dror Ben-Asher:  Thank you, Juan, and glad to be here.

WSA: Great. So, starting off, please give us a history and overview of the company.

Dror Ben-Asher: RedHill is a relatively young company founded in 2009.  We are focused on gastrointestinal and inflammatory diseases, including gastrointestinal cancers.  We have a multiple shots on goal strategy.  At present, we are conducting three Phase III studies in gastrointestinal (GI) disease indications in the United States.   Two of those Phase III studies read out this year, the first reads out next quarter, RHB-105 for eradication of H. pylori infection that is a potential blockbuster.  We are backed by strong investors including OrbiMed, Broadfin, and others. We already have one partnership in place with Salix Pharmaceutical, the leading GI player in the United States, and we maintain a strong balance sheet.  As of last week, we announced that we are sitting on close to $35 million.

WSA: What were some of the key drivers there behind the company’s recently announced quarterly results, as well as the results for the year end?

Dror Ben-Asher: The most important news emanates from the ongoing Phase III studies.  What we have announced is that the Phase III with RHB-105, a potential blockbuster I mentioned earlier for eradication of H. pylori bacteria, will read out next quarter – in the second quarter of 2015.  And we also announced in respect to this drug that the FDA granted us a QIDP status.  What this means is that under the GAIN Act of 2012, RHB-105 is benefiting from fast track development status, priority review of our marketing application, our NDA, and perhaps most importantly, eight years of regulatory exclusivity regardless of patent status.  That is major news for us.

WSA:  Right, right.  So, yeah, in terms of BEKINDA, you’ll be presenting some other data there at the American Society for Clinical Pharmacology and can you talk about some of the other products there in the pipeline?

Dror Ben-Asher:  BEDKINDA or RHB-102 is a once-daily antiemetic formulation in a tablet form.  It is oral and it is the only once daily formulation of that drug called ondansetron.  We have commenced the Phase III study last year and we expect to complete the study and have top-line Phase III data in the fourth quarter this year.  The indications that we are pursuing in our Phase III study are gastroenteritis and gastritis, which are very common conditions.  In fact, according to some estimates, there are probably 300 million cases a year in the U.S. alone.  It’s an inflammation of the gastrointestinal tract as a result of food poisoning or other infections, which results in nausea and vomiting and diarrhea, and the big risk of course is dehydration.  Our drug is supposed to solve that with a single administration with water of the BEKINDA pill.  And again, we expect top-line Phase III data from this study in the fourth quarter of 2015.  That’s another important piece of news for us.

I would also mention that we recently announced a financing, our first public financing in the United States that was successfully completed with the help of Wells Fargo, and there was a very strong demand.  We are very happy with the interest and awareness that this first public financing created in the US investment community for the first time since we were listed on NASDAQ.WSA:  And what are some of the other key trends that you’re focusing on right now in the sector?  How is the company’s positioned to capitalize?

Dror Ben-Asher:  What we see is a very strong unmet medical need in gastrointestinal and inflammatory diseases. This applies to several indications that we are pursuing including H. pylori, as I mentioned, which is the number one cause of ulcers and gastric cancer, and it’s highly prevalent among the US population.  Probably 30 to 40% of the US population is infected with H. pylori at some point during their lifetime.  It also applies to diseases such as Crohn’s disease where we have our first Phase III program currently running in the United States.  Looking at the microbiome – at the trillions and trillions of bacteria that are in our body, we have identified a specific bacteria called Mycobacterium avium paratuberculosis which we believe is a cause of Crohn’s disease which is a severe inflammatory disease of the GI tract.

So, basically, we are focused on approaches that are innovative in tackling severe inflammatory diseases of the gastrointestinal tract and other inflammatory conditions.

WSA:  Certainly, and perhaps you can walk us through your background and experience and talk a little bit about some of the key management over at RedHill.

Dror Ben-Asher:  First Juan, look at our website, there’s the presentation there on slide seven.  We listed not only our executive management but also the board of directors and advisory board as well.  And there, one sees prominent names such as Dan Suesskind on our Board of Directors.  Dan has been with Teva Pharmaceuticals for over 30 years as CFO and Director, and one of the very few people who made Teva what it is, from a very small local player in Israel in the 80’s to what it is today, the pharma giant that Teva is today.  And Dan is a strong believer in RedHill and an investor as well.

Another director that I would like to mention is Dr. Cabilly. Shmuel Cabilly is a scientist who invented a couple of very important patents called Cabilly 1 and Cabilly 2, and those are the underlying basic patents of the application of monoclonal antibodies to therapeutics.  His technology currently underlies probably 30 drugs on the market selling in total dozens of billions of dollars including Remicade, Humira and many others.  And Cabilly is one of our largest investors as well.

On our Advisory Board, I will mention a couple of names – Dr. Jeff Leighton, Professor Chezy Barenholz and Dr. Werner Tschollar.  Those are world-renown experts in science and pharma research coming from Novartis and Glaxo and so on.  So we have a very strong board of directors and a very strong advisory board as well.

And then, as far as the RedHill management, there’s only 20 people.  Most of R&D is in North America. Among those people there are people who have brought several drugs to the US market and a total hundreds of years of cumulative experience in bringing drugs to the US Market.  My personal background is academia and consulting and investment banking until I cofounded RedHill back in 2009.  Since then, that’s the only thing I do.  I graduated from Oxford in the UK, completed LLM studies at Harvard.  I taught at Harvard in both Economics Department and the Law School focusing primarily on the pharma industry.

WSA:  What goals and milestones you and the team are hoping to accomplish over the course of the next year?

Dror Ben-Asher:  RedHill has a vision and a mission.  And our mission has to do with bringing important therapies for unmet medical needs, alleviating suffering, and saving lives. Specifically, with regard to our Phase III programs, we are looking to generate Phase III data.  We are looking to generate top-line Phase III data next quarter, the second quarter of 2015 with RHB-105 for the treatment of H. pylori infection which could prevent both gastric cancer cases and ulcer cases, and other diseases.  That is a major milestone for the company coming up next quarter.  And later in the year, we would have the top-line data for RHB-102, BEKINDA, for gastroenteritis.  Later on, we should have Phase III data from our Crohn’s study with RHB-104 which is a revolutionary paradigm-changing study which we hope will change the way treatment of Crohn’s disease is done for the better for years to come.

In addition, we are focusing on partnering.  We’ve already done one partnership with Salix Pharmaceutical for a drug called RHB-106, which is an encapsulated bowel prep pill.  We have received a nice upfront payment, we stand to receive additional milestone payments in the next two or three years or so, and of course, are looking forward to see the royalties that could reach up to low double digits of what Salix projects could be nearly 300 million in sales annually.

In addition, this year, we expect regulatory feedback from a number of marketing applications that we have already filed for smaller indications which I did not go into but these regulatory feedback and potential approvals are important for us.

WSA:  And as far as investors in the financial community are concerned, do you believe that the story and the message and upside are completely understood and appreciated by them?  And if not, what do you wish investors better understood about RedHill?

Dror Ben-Asher: RedHill remains relatively unknown in the US Financial Community.  And the reason for that is that we were listed on NASDAQ in December 2012, just over two years ago.  However, we had not done a public financing in the US until last month.  And because of that, the exposure of the financial community to RedHill was limited.  It was consistently increasing but nevertheless limited.  We do see a change for the better, much more awareness, and interest in the RedHill story.  So, the financial market and the investment community, we believe are starting to understand what the company is about: multiple shots on goal strategy, our strong balance sheet, both in the short term and the longer term.

WSA:  Great.  And so, once again joining us today is Dror Ben-Asher CEO of RedHill Biopharma which trades on NASDAQ, ticker symbol RDHL; as well on the Tel Aviv Stock Exchange, RDHL.  Currently trading at 14.60 a share.  And before we conclude here to recap some of key points, what do you believe differentiates RedHill in the healthcare space?

Dror Ben-Asher: Typically, when one looks at a small cap biotech, you see most companies with one or two clinical stage drugs and/or single technology platform.  The way we have built RedHill is different.  We try to correct, and fix, and prevent in advance actually the chronic weaknesses of small biotech.  And I mean, there’s a long list of issues here but the most important ones are over-dependence on one or two products, lack of resources, and over-dependence on a single technology platform.  What we have is eight products.  All of them are in late clinical stage.  We have three Phase III programs running in parallel in the US.  We have a strong balance sheet and we have the ability to complete the development programs, and bring all the way to the market, several of our products with our existing resources.

On top of that, we already have a partnership in place with Salix for RHB-106, our bowel prep product where we do not have to invest anything anymore. Salix is responsible for the development, therefore the risk profile of the company coupled with the potential and the upside in case our development programs are successful is something that probably differentiates us from the vast majority of small biotech companies.

WSA:  Well we certainly look forward to continuing to track the company’s growth and report on your upcoming progress.  I would like to thank you for taking the time to join us today, Dror, and update us on RDHL.

Dror Ben-Asher:  Thank you for having me, Juan

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