Good afternoon to Europeans and good morning for the US people. Thank you for joining us for this Annual Results 2023 presentation. I'm Markku Jalkanen, Faron's CEO. I'm today with our CFO; he's based in the East Coast of the US. Jim, good morning for you. The presentation really obviously is looking at the 2023 activities, but I want to just start with that we had a little hiccup a few weeks back, and I'm happy to say right now that that has been now corrected, and we are moving like we used to do. And Jim will report some of those activities as well. It was really an unfortunate thing, and I take full responsibility of that. So with that, you remember that we are a publicly listed company. We will be making future-looking remarks, and obviously this is to disclaim all of those.
We have a very unique drug called bexmarilimab, humanized antibody that has no lytic activity, but it has a blocking activity of receptor called Clever-1. I really like the name, by the way. The Clever-1 antibody, what we have, can reprogram myeloid cells, and obviously one aim is really to activate the immunity, which has been lost, for example, by the cancer patients. Then on top of it, it's also expressed by some of the disease cells, especially the myeloid leukemia cells, and obviously that is a very important point because now we can directly target those myeloid leukemia cells in order to control them and hopefully just make them disappear. So novel antibody, potential to help the immunity or immune activation in both solid cancer groups and the hematological cancers. Totally we have treated some 250 patients so far, and it's totally safe.
Very minor adverse events at all, and that's a bit surprising because one of the worries when people come with new drugs to the cancer patients, the side effect profile is really critical, really to have success, and we have passed that one. The second obviously is the efficacy, and as you all know, we already saw some years back that we do provide a clinical benefit for the advanced solid cancer patients which have no options anymore by activating their immunity. I come to that one later in my presentation.
But then more importantly, we have now learned to control the cancer blast cells in those leukemia patients and make them disappear, especially from the bone marrow, which is the site that maintains our blood, blood cells, blood components, and obviously that is a very important finding because that then makes us assume that we can control the blast number and help those patients really to survive, and that's really important, and I will focus a lot of my talks into those activities. The antibody is well also protected globally, and just looking at the first application, this hematological leukemia, we are predicting that that alone could be an opportunity in billions, and that's I'm referring really from the commercially available market analysis, and this is not really anything else than that. So what we did with the pipeline in 2023, we closed the MATINS trial.
This was the first-in-man trial with the solid advanced cancer types. You may recall that we had several cancer types. I come to that data later on. This was really important for us because it provided dose levels, what we can then use in the next steps. And when we utilized that information and estimated what is the best dosing levels with the hematological malignancies, it was right on top of the level. So from 1 to 6 mg per kg is rather close, and now we are getting to the point where we can finalize that dosing with the phase II part. It could be 3 or 6. So it just shows you how important the MATINS trial was. And also having a patient already studied in number of 200+, it's really important for the regulators.
They appreciate a lot that the safeties work out, and they are not concerned about that, especially when you move into aggressive malignancies like these hem cancers are. So that BEXMAB study phase I part is now completed. Obviously, we are following those patients in order to look at the durability, and there will be hopefully soon some additional information on that topic as we have indicated in our press releases. So we have taken that further into a high-risk MDS, which was the most promising one, where we had an amazing 100% response rate. None of us really believe that it will stay at that high, but anything above 50% would be remarkable because normally 90% of these patients do not survive past six months. So, BEXCOMBO, I will come to that one also at the end of my presentation because we are not really forgetting that.
It's just a resource question when we can take it further. So with this, I let now Jim to look at the financials of the last year. Jim, please.
Hello everyone. Let me first review the 2023 financial results, all of which can be found in our annual report, and then I will get into the post-period results that we've had that are included in our press release as well issued today. Cash balances at the end of the year were EUR 6.9 million, roughly the same as 2022. We raised almost EUR 26 million last year very successfully, issuing 8.9 million shares. Our operating loss for the year was EUR 31 million. About 70% of our cash expenditures go towards R&D activities, which is quite high. Our net assets were a negative EUR 15.6 million, a little higher than in 2022, all due towards the continued effort towards developing bexmarilimab. Net cash and operating activities was essentially flat year-over-year at EUR 23.9 million.
We had 68.8 million shares outstanding at the end of the year and still have 7.4 million shares that we could issue that were granted to us at the AGM in 2023. So now addressing the period post-2023, as you saw, we were successful in raising EUR 3.2 million for the issuance of capital loans earlier this month. We have included in our detailed annual report all of the conversion features and things necessary to really describe how those capital loans will work, ultimately convertible. The company was actively trying to raise another EUR 5 million, at a minimum EUR 5 million, before our AGM for 2024, which is scheduled for April 5th. So you'll have more information on how our progress is on that post this call today.
From a longer-term funding perspective, the management team is really focused on providing a cash runway for the BEX trial phase II costs through 2025. Those efforts include a larger share issuance post the AGM through a public offering. We'll talk about later on our business development activities. We're quite active at the moment. We look forward to engaging in one of those agreements later this year. To the extent possible, taking on any new debt financing in the market with appropriate terms that would satisfy the company. We did disclose that we had an event of default on February 19th with our bank. We now have cured that. We are now in compliance with all of our debt covenants. We have full access to all of our bank accounts. We have new minimum cash requirements through April 30th.
We've disclosed all of our waiver conditions in the group's annual report. Again, I want to assure everybody that we're in compliance with all of our debt covenants as of today. Finally, just to address again our management team, a very strong management team that we've had. We've got over 30 professionals in the company, diverse backgrounds, well positioned to take the company into 2024. With that, I'll turn it back over to Markku.
Thank you, Jim. So you can see now the current management team, and obviously Jim joined last year. We also have a new Chief Medical Officer, Birge Berns, who lives in the UK. We really liked her regulatory background as that is becoming really important regarding the next steps, for example, on BEXMAB study continuation and having opinion and feedback from FDA. So a very close group and having weekly meetings and taking the programs forward, really appreciating all of these activities, what we have. And then we had some changes in the board of directors over the years. Christine Roth, who works for Bayer, has joined the board, and so did Marie-Louise Fjällskog when she stopped being our Chief Medical Officer.
You may recall also that Leopoldo Zambaletti left the board in order to help us really with these partnering discussions, and obviously that is a really critical step for us in the near future. Hopefully we can report at that side also something later in the year. The key people for the BEXMAB advisors are in the middle of this screen, Naval Daver from MD Anderson and Mika Kontro from Helsinki. They are very valuable to us, and we plan to utilize them obviously in the future. But there are some additional people now coming from the US side when we are opening the new sites in order to increase the BEXMAB recruitment capacity. Everything is going as we have planned. Remember, this hiccup didn't have any impact on our pipeline.
It was a financial hiccup which we have now fixed, and we are moving forward. Keep that in mind. So moving there, I will now focus first on these leukemia matters. On the left-hand side, you can see staining of the individuals who represent different leukemia forms. And if the color is red, I'm a red-green color blind, you can see it. Well, this is so evident that I will see it as well. But anyway, those are Clever-1 positive, and obviously that is what I said at the very beginning, very obvious targets for the bexmarilimab. Some of these forms which are called high-risk MDS, meaning that they have already high mutational burden. They have made some other conditions that make the disease condition very challenging. There is only one basic treatment, and that is an HMA, hypomethylating agent.
There are a few of them, but the best known is azacitidine. If that fails, there is really nothing available to them. There is no second line of treatment. And could you believe we still have among us a leukemia that we don't really do not have treatment options or choices? So really awful situation for the patients who will encounter condition like this. So on the left-hand side, you can see that now we have a dual mode of action because this Clever-1 is expressed by these blasts. These are the cancer cells. We activate the immunity. That's on the left-hand side, and then we target directly these blasts. And what our scientists have learned is that when we block Clever-1 on the surface of these blast cells, we block the use of the mitochondria to produce ATP. And ATP is the gas, the fuel for these cells.
If you don't have fuel, we all know what happens to the airplane if you don't have fuel. These blasts will blast. They cannot maintain their shape anymore, and they may disappear. And obviously, if you at the same time have an immune activation, you should have an antigen material to present to our immune system and then form a permanent activity against these cells. And that is exactly what we have started to see also in humans, and I will come to that one in a minute. But we started this, what is typically required, dose escalation, and as I said at the very beginning, we used the dosing from the MATINS trial, 1 mg, 3 mg, and 6 mg per kg every week. And notice that the most optimal activation you get with 3 and 6, not with the one.
So excluding that from the choices, there was very little dose-limiting toxicity if any. So this is very safe treatment also on these patients. And then on top of it, we just, as I said earlier, recorded this very significant overall response rate among those high-risk HMA-failed MDS patients. Either they have failed to the standard of care, which is azacitidine, or then they had a high risk at the very beginning, and that was the reason why they came to the trial. So those 32 patients have been now on the trial for quite a while, and obviously we start to now get also the durability analysis, and we plan to provide some additional information later this month on those patients.
FDA guides us to select two dosing levels in order to finalize the dosing for the pivotal part, and that's the phase II part which is ongoing at the moment. We have indicated that that will be no more than 16 patients per group, and that's now ongoing in Finland and in the U.S. at the moment. Having that data, you can go back to the FDA and discuss what kind of a final pathway we really need to do. I mentioned that we can activate the bone marrow of these patients by giving bexmarilimab treatment. You can see the antigen presentation capacity to increase on the left-hand side. Higher dosing is increasing more, and the same can be observed also on the right-hand side where the accumulation of CD8 cells are described in the bone marrow. You can see that 1 mg/kg is not enough.
You need to have 3 or 6. That's the red and blue on the right-hand side, and you get the accumulation. This means that now the immune cells are coming to the bone marrow, and obviously now they are ready to fight against these blasts which normally occupy this bone marrow. So very important immune activation data from these patients. But obviously, more importantly, when you look at the first patients in this trial with the various concentrations, you can see that two-thirds of these patients reduced their blast numbers. So this is a very significant finding, and obviously this indicates us that yes, we are really attacking the blast cells. With the 1 mg/kg , you started to see this effect after maybe three dosing cycles. With the higher concentration, it started to become evident after one and second dosing cycles, meaning that also this finding was dose-dependent.
But obviously, 3 and 6 showed that much of a difference. It's also durable from the last fall data. You can see this extension of survival of these patients. This is the data we presented at ASH meeting, American Society of Hematology meeting in December. And I can tell you that when people started to see this data, especially the clinicians, we had a line of the sites really to come and join the BEXMAB study. But obviously, we don't need them yet. Once we go to the pivotal part, we may need some additional ones. We are good to go at the moment. So obviously now it's really important to follow these patients in order to get overall survival data. We already have very significant response rate, meaning that you get partial or complete reduction or complete reduction in the bone marrow.
But then on top of it, you have to really also tell the regulators that you have a durability. And if that is true, then I think we are really good to go with the FDA for the final pivotal pathway. So very exciting. But I now come to this selected group now where the phase II is ongoing. And as I said earlier, high-risk MDS or early refractory form, these are the patients who were at that time in the trial. All responded to the treatment, either reduction in the blast number or then a recovery of the blood values like hemoglobin, leukocytes, neutrophils. Even one of these patients went to the transplantation, which is kind of regarded as a final cure at the moment. So that's, in a way, rather exciting.
One second thing I would like to bring up from this slide, and that is this TP53 on the left-hand side. You can see that four patients had that mutational burden already. This is considered to be the worst one. If you have a mutation in P53 protein, you are practically running out of the brakes to stop the cancer. So this is very interesting that we can actually help those patients as well. Some of the clinicians even have proposed that should we then focus first-line TP53 mutation patients and test this directly in the first line. But we have now selected really to take these refractory patients further, and that is really important because we had that 100% response now among the patients. One of them turned during the treatment into acute myeloid leukemia, and we couldn't help that patient. We got in too late.
The majority of the responses were deep and durable, as I already showed, and we are following them now very closely so that we get additional data. The treatment is well tolerated. All the evidence, clinical safety and clinical efficacy there, just need to just complete this part of the trial. Then when we look at the patients a bit more, we then realized that we have some patients which had actually received some other treatments than just Azacitidine. Especially down on this slide, patients three, four, and five, you can see that they have been on Magrolimab. That is anti-CD47 antibody, and you all know that that has now disappeared from this area. Gilead has stopped the development not only in the hem area, but also now in the solid areas. And another combination also with another HMA and then Venetoclax.
Venetoclax is one of the drugs which is pushing into this area. How well that actually will be at the end of the road, I don't know, but that's very toxic, and obviously one needs to be careful when that is combined with the other compounds. Patient number four, Sabatolimab. That is an anti-TIM-3 antibody, and Novartis has announced that that is stopped also after having data read out in phase III. So nothing available there. So I believe that this unique mode of action we have against these cells is really going to carry on us all the way into the market. And I wanted to show one additional slide. This looks a little bit complex, but don't care about it. This is on the left-hand side just showing that CD74 is expressed almost by all immune cells.
So why on earth they ever selected to target that is a mystery for myself and some other colleagues. If you then look at the expression of Clever-1 on the immune cells, they are mainly expressed on myeloid cells, explaining why it's so unique, and also now we know the mode of action. Then on the right-hand side, I'm not going into details, but this just shows that bexmarilimab is very similar with the compound called LPS. It's a known activator of our innate immunity, meaning that bexmarilimab treatment causes the same response as LPS would do in the tumor environment. Magrolimab doesn't do that at all. And if you then look at carefully under the bexmarilimab title, there are some very known target molecules also some other companies are utilizing or targeting at the moment, CD47, TGF-beta, and TREM1, and some other ones.
So it looks like Clever-1 is a master regulator of this immune suppression, and obviously that's the reason why it's very important to target that molecule. So the plan is really follow the phase I, that's the dark blue patients, in order to obtain the durability data. Then move on to phase II, which is that 32 patients in two groups. They are randomized between these dosing levels. Then have the data at the end of the year go to the FDA and ask, "What's the final pathway to the accelerated market?" Or if they then propose that we need to do a randomized study, we then need to tell us what is the secondary arm because if there's nothing else, I have difficulties to really imagine how that is conducted, but we let the FDA say that. So that's ongoing and progressing well at the moment.
The roadmap for this year is rather straightforward. We have initiated the phase II. We will have a durability analysis of that part one patient group, as I indicated. We plan to complete the full phase II enrollment during the first quarter, then have an initial read out towards the end of the year, and then go with that one to request discussion with the FDA, and then design the final pathway to the pivotal part. If the data stays like it is, we don't believe that we need to do a significant size of trial at that point. As Jim already indicated, we have now started also the final site effort. We closed the first. We call it step 1.
There will be hopefully a second one closed later this month, and then we are proposing to AGM a number of options or how we go forward, and we let these shareholders make the decisions what opinion they may have. As Jim already indicated, the AGM will be on the 5th of April, and hopefully later today there will be an invitation where this is then kind of explained in more details. I will not go into that dose one today. Then on the background, we have had already quite a while discussions with the potential partners who actually would like to have a license to the bexmarilimab. There are some companies who are interested more in hem applications and some who are only interested in solid cancer types applications.
We are building up a situation where we hope to have a bidding process towards the mid or second half of the year, and obviously that then requires a significant number of companies in order to get the bidding done correctly. And happy to tell that those are available already. I have said earlier in the year at the JP Morgan conference that we had 20+ companies interested in this use of bexmarilimab to activate immunity, and all of them are with us at the moment. So we are really expecting to have a very exciting opportunity, really. And the opportunity, as a nurse, first indication is this MDS. High-risk MDS. As you can see, there's hardly anything really to help them. Yet we spend a significant amount of euros or dollars on these patients because obviously we would like to help them and save them.
Those are conditional treatments, especially when the HMA fails. We have to hospitalize them, take out infections, take out a lot of blood substitutes. So I'm talking easily $250,000 per patient costs involved in these. And if they go all the way to the bone marrow transplantation, which is only 5% of this population, the spend could be $1 million. That roughly 90 patients need help, and we are assuming that they will get this help from the bexmarilimab. I'm not kind of predicting what the treatment price will be, but you can do your calculation by yourself. But as said earlier, there are some reports that this market will grow at least up to $2 billion, but obviously with those numbers it could be even higher. Then final word. So as we started earlier, the bexmarilimab converts immune suppressive macrophages into immune activators.
We have now shown that this happens when we treat the advanced solid cancer patients. This was published in Cell Reports Medicine, really prestigious journal, and we showed that that conversion happens intratumorally, inside the tumors, exactly what we wanted to see. When it happens, it will provide a clinical benefit for the patients. It only works or it works best in the patients who are cold. They don't have interferon gamma signaling, and if you now activate the interferon gamma signature, you get this survival benefit. This could be something that we can also utilize in the future to select the patients together with a Clever-1 intratumoral staining, which is now available and based on a separate antibody than bexmarilimab. These are the plans what we will apply. Obviously, as showed earlier, if you have the response, you have the clinical benefit.
So that's in the middle. On the right-hand side, we just showed that the patients were similarly progressive when they entered the trial. This is available really to move on. One of my favorite ones I'm not really saying that we necessarily go there, but obviously the refractory melanoma, which is not responding anymore to the PD-1 or any other treatments, could be something we already saw in our MATINS trial getting benefit from this treatment. With that, dual mechanistic lead asset activated immunity can target leukemic cells directly. I think we have a proof of concept already with us. This is now a position where we can really potentially expand, especially if we have additional resources. We have also set up a manufacturing at the moment. The very first 2,000-liter stirred tank was completed in January.
So we are ready to go with that material as well, and obviously we are supported with the scientific network and clear opinion leaders and focus now this year being in the BEXMAB. And I just want to thank all the people who have been working hard during the 2023, and we are all very excited about this year. And again, I'm sorry for this little hiccup. It has been corrected, and we are now moving on and hope all the best for all those activities. So with this one, we are now ready to really for the questions which you may have sent via network and happy to answer for those questions together with the team. Thank you very much.
Thanks, Markku. First question in. Do the current arrangements with Covenants allow you to continue making the necessary CRO payments, and has there been any impact to patient enrollment?
Jim, do you want to say anything about the?
Sure. Yeah. We are actually making payments to all critical vendors at this time. We do have the cash to be able to do that. We are in the process of getting caught up with all of our payments to all of our partners to make sure that we're in good form with all of the supporting network that we have at the company. From a patient population standpoint, we continue to work with the patients that are on drug today, and we look forward to enrollment numbers increasing throughout the year.
Thanks, Jim. Markku, when will you publish the phase I BEXMAB survival data and response duration data, and what can we expect to learn from that?
The read-out cut date will be this week's Friday, so 15th. It's exactly the mid-March like we have indicated. It will take some time to analyze anything. Can we do it over the weekend? I'm not sure about it, but definitely next week.
When can we expect the first read-out from the phase II part of BEXMAB?
Well, there are some important meetings which also place these where we are going to meet a lot of these partner candidates, and one of them is ASCO. And as you all know, ASCO, the American Society of Clinical Oncology or the cancer meeting, is very important. It's the first full week of June. So my prediction is that we will look at the data prior to that meeting. We cannot anymore set up a poster or data for the meeting itself, but that data is obviously very useful when we talk to the partner candidates. So sometime along that time.
Is there awareness building among clinical and pharma stakeholder audiences around the clinical data that you are producing?
It is. As you may recall, we have a Leukemia & Lymphoma Society, one of the investors in us, and they do have a significant network, especially in the U.S., but they are expanding to Europe as well. We are utilizing that network, but then we are setting up some additional networks, and that is especially very active activities typical in the U.S., maybe not that much in Europe. Those kind of relationships are building up while we are speaking.
When do you expect initiation of BEXCOMBO, and how will this study be financed?
That is a very interesting question. When we now closed the MATINS, some of these investigators have indicated that they would like to continue immediately with these refractory populations who had no options anymore with those advanced cancer types. That has provided us really to think about it, investigator-driven trials, and we have some thoughts how we are going to initiate those, and those will be rather low-cost pilot experiments, but that actually could provide us proof of concept. I hope to be able to provide some additional information later this spring.
Thank you. Have you already applied for fast-track or breakthrough status for BEX?
That's from AML and MDS in the process at the moment.
Okay. That was your last question, Markku.
Thank you. If there is anything else, thank you again being with us and keep following us. We will be stronger than ever really to move forward. At the end of the day, the purpose is really to help those myeloid leukemia patients first because they have not that many options at the moment. Let's hope the best. Thank you.