Good day, ladies and gentlemen, and welcome to Farron Pharmaceuticals Unaudited Half Year Financial Results for the 6 months ended June 30, 2021. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session through the phone lines and instructions will follow at that time. Participants can also submit questions through the webcast page using the Ask a Question button. I will now hand over to the CEO of FARON, Doctor.
Markku Jalkanen, to open the presentation. Please go ahead.
Thank you very much, operator. Good afternoon or good morning for those in U. S. And thank you for joining us this conference call, where we go over the presentation for the 1st 6 months of this year. Would be really nice to see you all, but obviously, this is the time we need to do it this way, But hope to really soon get over this one.
I'm here also with our CFO, Tony Haninen, who is in Zurich. Hello,
Toni. Good morning and good afternoon.
And with that, could I get the next slide, please? That is just to remind Slide number 2, please. Just to remind you that there will be some forward looking statements during the presentation and this is just to disclaim those. Next slide, please. So as you know, we really have been focusing on the immune therapies where we maximize The system we have to defend ourselves in this rather hostile world, our main target is Kleva 1 That we believe is the main cause of this immunosuppression around the sites where one example is the tumor.
We believe that it actually could produce a signal HiMe for the cancer cells. And obviously, that is really important to remove if we want to target a Removal of cancer. We have a very interesting position here. We have order efficacy. We have a number of new cancer cohorts.
And this It's going to move on to the pivotal dates after further experimentation later this year, and we are all excited. The pipeline next slide, please. The pipeline illustrated in the next slide It's just an example where we are at the moment. The original METEANS trial has become a platform of us There we can test various combinations and individual cohorts. And as we have already released, we now have 4 different Cancer cohorts where we have early efficacy demonstrated.
The Matins patients are a last line patients in the cancer treatments, And we are using a monotherapy. So when you evaluate the results, keep that in mind. And we anticipate really to move on to additional trials on the second half of this year. So very exciting time for us at the moment. We also have made significant progress with the trauma client, the second asset, And I will tell that more about as well.
And looking to slide number 5, The significant progress is really illustrated with the fact that now we have a Cutaneous melanoma, gastric cancer, cholangiocarcinoma and hepatocellular carcinoma, solving a Disease control rate that is from 30% to 40%. And as again, this is a standalone treatment, post of other treatments these patients have gone through previously. And additional trials are really planning to start, and I will call some of them over. And at the same time, we have really secured patents in U. S.
And Japan to really protect the Pexmarilimab. But then more importantly, we finally not finally, but have succeeded really to get the companion diagnostics to really measure the clever one from the tumor samples, and this is really important aspect as well. Provakai now has Part of this Phase 3 Phase 2, Phase 3 trial in the U. S, we call it Hibiscus. And there we have a significant support from the Department of Defense.
So with that one, we believe that we can finally solve the problem in which order The current treatment should take place in those patients. And obviously, we are in favor of starting that with Atafampira, thrombakain And then continue to additional medication if needed. And it's very exciting project as well. I next we'll ask the next slide to slide number 6 and ask clearly, Tony, to look at the numbers from this 1st 6 months of this year?
Sure. Thanks, Marco. So highlights of the 1st 6 months of the year 2021. Our cash Promises at the end of the period were €7,000,000 and our operating loss was €10,400,000 which was an increase compared to prior year. And this is mainly driven by the GBP 3,500,000 increase in the R and D expenses due to the acceleration of our pipeline assets, Remark will just give you the highlights and will elaborate a little bit later more details.
The net assets were €2,800,000 at the end of the period. And earlier in the year in February, we did a €15,000,000 gross equity raise from new and existing shareholders, including the EIC, which first time
invested in a publicly traded company. We were very pleased and
very excited about that participation. We were very pleased and very excited about that participation. And then also early in the year, as Marco mentioned, we had a commitment of US6.1 million dollars from the U. S. DoD to support the Hibiscus trial where we announced yesterday the first patient in.
With that, I'll hand it over back to Markku. Next slide, please.
Thank you, Tony. So let's move on and look at the pexmarilimab. So this is really a humanized anti clever antibody, And this is really the summary. The few things that makes it really unique, the target is unique. We are the only one at the moment who is doing it.
And if this target is really in charge of hiding the cancer cells from our immune system, it's important really to unlock it. We also know that it's very safe at the moment, really haven't seen the dose limiting toxicity and all the adverse events related to the drug are really minimal, Especially if I compare those, the ones which have been seen with some other checkpoint inhibitors. And all of this really mean that we have an opportunity really to More treatments of cancer by combining with the existing other treatments. And having this opportunity really to have It really means that this opportunity is really significant. Could I have a next slide?
So as you may recall, the checkpoint inhibitors have improved significantly the outcome of the current cancer treatments, But yet they still help only a partial portion of these patients, as illustrated here on the left hand side. So in order to improve this outcome, we really need to improve the conditions where these are exercised. And we believe that if you can remove these immunosuppressive myeloid cells from the tumor side and from the patient, In all occasions, we have much better success in doing that. Next slide, please. So macrophages are around the tumor.
You can see that on the right hand side from these immunohistological staining. And now we have this diagnostic tool to do it. And macrophage is a well preciated, really to take part Number of activities which promoted tumor growth and the spread. So it's accepted well that you need to remove macrophages, but not all of them. CleverOne is specifying 1 special group, which seems to have the highest immunosuppressive capacity.
So if you can reprogram those into a antigen presenting cells, you actually can make them to stimulate the immune system. And that's the whole purpose of the treatment with the pexmarilimab. And as shown in the next slide, we really have now worked out A assay that helps us to detect Klev1 in those tissue samples. They could be tumor biopsies or they can be samples from the surgical operations. And then we can look at how abundant clever one expression on those macrophages really are.
And that would help us hopefully also to define The target population in the future, together with some other biomarkers, what we are currently studying in those populations we have been treating. So this is a significant milestone and often asked when we get there and now we are there. It's all validated using a commercial analysis Kits and instrumentation is widely used all over the world. Significant milestone. Next slide, please.
That's 11 12, Slide number 12. So normally these tumor associated macrophages clean everything out, And they are supported by the cleavipan function. It's a scavenger receptor, but it also maintains the phenotype, which It's really effective of removing this material. And the whole purpose of this is really to remove it so that it's not available for the immune activation. In a way, they hide the environment, and that's the reason why this is so important for the cancer cells.
Cancer And as I said earlier in my presentations, the same situation in some of the physiological conditions. If you want to hide EMPra from mother's immune system, You are using these same cells, then they migrate to placenta. When the pregnancy is over, they disappear. Here, we would like to make the tumor associated macrophages who are clever 1 positive to disappear or convert them to 100% cells. And this is a very unique mode of action nobody else has been targeting previously.
So hide me, please, is The pegging question the Cancer Cells is making. Next slide, please. Then one of the amazing discoveries, which we have now confirmed during the first half is really that It's not only present this Kleva1 on the surface of these macrophages. There's also a soluble form And we have been able to document that is built in the exosomes with these cells ascending into a circulation. So you wonder why is that done?
It's very simple. This soluble clever one can directly inhibit T cells. And obviously, if you would like to activate the T cells, for example, using a negative checkpoint inhibitors, Maybe it's really important to remove the SOPHOPHLEV1. So SOPHOPHLEV1 has become a target of our development work as well. Obviously, we want to monitor its sparing and also control that the dosing is optimized really to do that.
And we already know, as shown on the right hand side of this slide, soluble Kleverabant amounts are increased in cancer patients. Next slide, please. From the animal experimentation, we already know that we can control The tumor growth has control in the presence of KLEV-one. Several models shown on the left, Lung, lymphoma and also memory, but also in the middle a melanoma, where we also compare that melanoma growth to anti PD-one. And if you look carefully, it looks like Klev1 is more effective in that model than PD-one negative inhibitor removal.
Then the new thing was that we also figure out that the clever one is heavily expressed by acute myeloid cells. And we have tested those in ex vivo conditions. And when we control the clever one, we control the replication of these cells. And that is one of the reasons why we really would like to move on to this first malignant condition where the myeloid cells are involved. Could I have the next slide, please?
Now one interesting thing what we learned from those animal experimentation that We actually increased the presence of these cytotoxic CD8 cells in those tumors which have been treated It depicts Marilima for the surrogate antibody. And you can see that in an increased concentration of cells who are granzyme B positive, Granzyme B is one of those protein A and C cells, B cells used to kill the cancer cells. And we definitely would like to see that around. Now when you look at the medicines, you see the same. Those are the red dots in this big picture.
And this is very important finding. This is a post treatment induction of Benzion B cells in those tumors. And at the same time, we also see the increase in the corona in those patients from the baseline, from the original baseline, Again indicating that we are activating the immune system. And now the question is, are they targeting the cancer cells? And if you really think about that they migrated to tumor, then they should do it.
Next slide, please. The important design of the mappings really is based on those facts. We collect biology from humans Andor epexmarilimumab treatment, we learn from that and then we move on. Then we can have adaptive designs in the mill really to modify The cohorts in order to get better understanding, as we have indicated, we are now testing the increased frequency in dosing. We started with 3 week interval, but we are now getting down to 2 weeks and to 1 week.
And then using that, it then comes to the point When we can actually really design the very first pivotal cohorts for next year and prior that really to communicate this with the regulators. And Allantis then applied the companion diagnostics. And very interestingly, the ESMO abstract that was sent meeting in September that was selected as a late breaking abstract And that is currently under a preparation for the final form. And hopefully, at the same time, when the Presentation is taking place at the meeting. We hopefully be able to provide additional information at that time.
Next slide, please. And when you look at the ones who are responding to the treatment, which you then follow as a resist images From those patients post 4 cycles or 7 cycles, we have a significant disease control in some of the cohorts, Cutaneous melanoma, gastric cancer, cholangiocarcinoma, and hepatocellular carcinoma in this case. We have some cohorts who have no response whatsoever, like pancreas, pancreas carcinoma, uveal melanoma. This is a significant response, 30% to 40%. That alone could Mean that the regulators really have a feeling that they actually should support us to move on And then the question is what size of the trials we need to run.
That we learn next year. Next slide. And then if you look at these, you can also look at the individual So patients as listed on the left hand side, but then more importantly on the right hand side, you can see the safety profile. There's hardly no drug related adverse events, as you can see. Look at the Grade 3 or 4, which are usually the severe ones, Hardly anything and the same for the grade 1 and 2.
This is a significant opportunity really for the combination therapies because We are not adding additional toxic a risk when combinations are carried out. And this may be the reason also why the clinic Has been really active, have been really active in conducting the recruitment. And we are close to 160 patients already now Recruited, and it's really a good sign because this isn't done around the corona time. Next slide, please. As said, we need to remove the soluble Klev1 from the circulation.
And you can see on the left hand side When we are administering pexmarilimab, it goes immediately down on the day 2, that's on the left hand side, but then already on the day 8, And later on, after 2 weeks or 3 weeks, we are back to the baseline. So this is the key market for us really to follow the occupancy of the receptor itself on the surface of But then a one very interesting panangol dynamic effect we have observed and already presented previously. This administration takes down some of the negative checkpoint inhibitors. Here we saw one example, and that is the PD-one level in the peripheral cells, CD4, CD8 in this figure. And as you can see, 24 hours post administration of dexmarilimab, We practically lose PD-one levels.
So very important finding and may be the reason why this pharmacodynamic effect then is beneficial in those patients we described earlier. So unique target, Unique pharmacodynamic effect and very safe. It is a really opportunity we'd like to continue as fast as we can And move on to the final pivotal basis. Next slide, please. And if you then look at the opportunity number wise, these all listed cancer cohorts are very significant in size.
Look at intermural standard of care and the refractory populations. In all of them, it's more than 50% Who are still refractory on the first line or second line treatments. So obviously, these patients need the help, and We are ready to do it as soon as we have data enough really to go out. Next slide, please. So the design really to move on to the pivotal part is to continue some of the dosing test Things which are currently ongoing, collect the data, go back to the FDA or EMA, ask advice what size of the pivotal expansion we need to do, And then plan all the way the marketing approval.
This is already ongoing work. And the MAT teams continue to be a Platform maybe in the future we combine their already with PD-one inhibitors or something else to look at what impact it has given on those who are negative at the moment. But that is the plan. And this is a very similar what was done some 10 years ago for the PD-onePDL-one inhibitors. Next slide.
So then the plan next slide, please. The plan is really to focus on those 4 cancer cohorts Describe here, in ECA, the knee adjuvant treatment and then also the combination with the lung cancer, Where the PV1 inhibitors are already as a standard of care and then initiate this leukemias study. And you can see the collaborators we have on the right hand side. And we have a significant people of clinical experts, oncologists, trailing around us, helping us This time, all the protocols for the studies. I wanted to highlight one example, and that is the next slide.
And that is the neo adjuvant study. Many of the colorectal cancers are really called tumors. They have been not activating the immune system. We do not necessarily know what it is, but some people think that as there are very little limitations, So the genetic burden is so low, they do not activate the system. With this setting, we are going to apply to renal cancer and colorectal cancer.
We give the single dose of pexmarilimab 2 weeks prior the surgical operation. We have a biopsy prior. And then at the time when the operation, the clinical operation and surgical operation is conducted, then we get additional samples. And if we can really show that with single treatment, we can convert these cold tumors, autochem, They could become targeted checkpoint inhibitors. Very interesting data collected from those tumors.
And this we get rather soon because We don't necessarily yet look at the efficacy within the short period of time. It's really to look at the conversion of this. Very important study for us and is about to start. Next slide, please. So back to this one.
This is really important for us, And I would say, and Toni will go over it later on, 75% of the resources we have, if not more, really go into this development. And few words about the trauma kind. Please, next slide. So as we announced yesterday, We now are in the hibiscus trial. It's on the left hand side.
But just to remind is that with this Trauma kind treatment, we hope to be able to produce locally one of the most anti inflammatory compounds we have in us, and that's ironacy. It's produced by CD73 and interferon p that is applicable in CD73 if it's lost from the cell surfaces. And the hibiscus trial, next slide, is a very simple study, but very interesting. We run it against dexamethasone. As you may know, dexamethasone has been largely now recommended to be used on the COVID-nineteen patients, And we have opposed that.
We know from the ex vivo and in vivo experimentations that Steroids can block the interferon beta signaling pathway. If that happens, you wouldn't have antiviral help from the interferon beta. So with this trial now, we run them head to head. And now we have initiated that in the U. S, we plan to have 10 to 15 sites, we soon have 5 sites open.
And then looking the situation after interim analysis after 70 patients, we can then make the further evaluation of this. I also want to share that the IDMC, The Independent Data Monitoring Committee carefully followed this because obviously they want to see how the two arms Separating from each other, so that they can actually follow that and then advise the trial study accordingly. Very important and very pivotal trial for us and happy to have also the Department of Defense really helping us to conduct this one. Thank you. Next slide.
I would now like to let Toni to continue with the corporate highlights. Toni, please.
Sure. Thanks, Marco. Next slide, please. So a push towards approval. So as Marco elaborated, what we've achieved Here so far as we see a single agent activity in multiple tumors, which are refractory to standard care.
In other words, All existing treatments have failed for these patients where we see activity. And in the setting that we've done in Matins is an all comer setting, Which is showing the clinical benefit here as Marco elaborated. And out of that, these 4 cohorts, cancer types That Marco mentioned that we are really expanding and accelerating hepatocellular carcinoma has a standard of care with 75% refractory to combo treatment. On the second line melanoma, the market is forecasted to be a $1,000,000,000 market by 2026. On the gas stake, we see a significant growth in the Western markets.
Asia is already a very high incidence already, but We see the investor market significant growth over the next 5 years. And then in cholangiocarcinoma, it has a limited market size as currently there is no innovative drug on the market. And really to recap, our pathway here is the checkpoint inhibitors, they have been approved with exactly similar trial sizes, Approximately 100 1 to 200 patients and with a very low overall response rate of 10% to 20%. So next slide please. On the back side, we are the near term catalysts.
As you can see here on the slide, we had a very busy 1st 6 months 8 months by now as of today with multiple milestones that we've achieved. And out of that, we also have a lot of plans and A lot of milestones coming up in the second half of the year. There's additional data release In solid tumors, we got the late ESMO, late breaking abstract in ESMO. Confirmation of the final doses and frequency, the meeting for the pivotal expansion and guidance. And then the cohorts should be starting recruiting in the first half of next year.
And additionally to that, we have the Neurajeomin study that Mark just elaborated and also the hematoma sickle malignancies starting in Q4 of this year. And at the end, we also do an investigator trial on a PD-one combination, so just a single agent. Next slide, please. And then to recap also on the TraumaKine and Hematokine. So TraumaKine, CMC, the commercial scale preparation is ongoing with HCC, We see progressing very, very well.
And then for the high risk schools yesterday, we announced the first patient in. That's the study for COVID supported by the DoD. And out of that, we hope to get the interim analysis as soon as possible, followed by the poster presentation, the Military Health Research Symposium, 3 map gap readout and then organ protection data released with the DoD. And last but least, hematocyan is in preclinical studies,
And we
are advancing those preclinical studies all the time. So with that, I'll hand it over back to Marco, and thank you.
Thank you, Toni. So this is really the summary of the current situation. And we are extremely excited about the second half of This year, of course, a lot of additional information will be analyzed. And as said earlier, especially with the biomarker data, It will be a key thing for being able to hopefully enrich the populations even further and understand how this response is taking place. Yes, some ideas there, but they have to be confirmed.
So with all of this, really thank everybody joining us. And as Said at the beginning, you have now possibility to send questions to us, and I transfer this back to the operator. Thank you very much.
Okay, ladies and gentlemen, we will now begin the question and answer session for the event. All other lines will remain on listen only. Okay. Our first question comes from Jon Bergren from Kepler Cheuvreux. Jon, please go ahead.
You're live in the call.
Yes. Hi, Marco. Hi, Toni. So I have a question regarding your main asset, of course. So I mean about a year ago when I first talked to you guys, you were pretty focused on investigating what kind of tumors that were high expressers of Cever 1 And that these patients will obviously potentially benefit more from treatment with bexemirizumab.
So and then in January, you made this discovery about Solvoxel-one and that a lot of patients in your trial had abundance of solvoxel-one basically. But now and when you had this key opinion leader update in June, you talked a lot about focusing patients with no Underlying inflammatory responses and essentially making cold tumors hot basically. So I mean to filter out High CLAVR1 expression tumors in patients who also have soluble CLAVR1 with no underlying inflammatory response. That It seems kind of complex to me. And I know that you accept all commerce in trial now, but do you aim to filter out patients with these kind of conditions in the pivotal arms of your trial?
Thank you.
Thank you. It's a really good point. That is the reason why we have collected a really massive amount of biomarker data are also related to the information. And especially we know that if we have interferon gamma activation ongoing And if you can help those who have been previously activated, that is really key thing to understand. Is that activation dependent on the presence of clever 1 Positive A2 mastoid macrophases.
Now we have a tool to do it. We go back and stain every sample we have from those patients To get a really high quality data. And it's I can assure that becomes part of this development work in the future. What are the best information really to classify to enrich the patients? We hope to learn this for all of that information.
Okay, great. Thank you. That's my own question.
Okay. Our next question comes from Myles Dickson from Peel Hunt. Myles, please go ahead. You're live in the call.
Hi, thank you. Hi there, Mark. It's Tony. Hi, Mark. Hi, Mark.
Hi, Mark. Hi, there. Just to ask firstly on The Bexmorilla about the advanced tumor, the numbers, I think you remember that you were initially talking about 30% The controlling you're now talking 30% to 40% subject which indications you look in. Is that a consequence of more data coming in? Or is it better understanding of the data that you had originally?
It's really the accumulation of the data. Not all the patients were at the stages we could evaluate them. Now when the full cohorts are available, that is the final number of the data. So it's 3 out of 10 in those three ones. And then Hepatocellular, which is the latest one,
It's 4 out of 10.
Great. Thank you. And then secondly, the companion, this I think followed on a little bit from the earlier question. The companion diagnostic and the sustaining of the antibody, are you now at a stage where you're reasonably confident that there's a quantum or a level of expression I mean the histology samples where you're able to distinguish responding patients or discriminate on patient outcomes for instance?
It definitely varies. There is an individual levels. How that is connected to the outcome and can that be helped In combination with Tata biomarkers, that is a crucial thing really to enrich the population and even go further than this 30% to 40 Present a response rate in those patients. That also may could guide us further to think about what are the best combinations if those are needed. So yes, we get the information from the human material, not anymore from the animals.
And we all know that It's really important to understand how the human reactions will really take place. And also, I need to remind here that we are really looking glass to find patients. Many of them have gone through several line of treatments, including chemos. And many of them I know and have seen the data are in really bad on this sense when they come to the trial. So I just wonder how these things will look when we get further up on the first line or second line.
It is really important to understand.
Thanks, Markku. And then the last one on the science. So this is back on Slide 15. You were showing the math in patients and bexemarlimab effect on CD8. Have you are you able to quantify that difference Between the CDA expression in the patients pre and post?
Or is it the lower or small numbers and it's just a significant change at this stage?
We are. And we would like to not only look at that individual, a cell type, also some other biomarkers among those populations. Well, it's really important to understand what is the CD8 populations we are affecting mostly. So as said earlier, All that data is under the analysis at the moment.
Okay. Thank you. I'll wait for it. And then lastly, perhaps, Tony, just on the financials. I remember in your FY 2020 results, you included a number of grants, loans and loan guarantees that were totaling SEK7.9 billion, but you disclosed SEK2.1 billion in the actual financial results, does that mean that we can potentially expect the rest to come in, in H2 'twenty one or some of it drift out to the following financial year?
Thank you.
Thanks, Myles. Exactly. So out of the $7,900,000 that's the 4 instruments that we announced and the DoD from the U. S. On top, the US6.1 million dollars So last year, we received out of those funds US2.2 million dollars on the bank account.
And then now in H1, It's roughly 300,000 from the Business Finland loan. And those are staged with the milestones and then we report back to them and then they pay. So they always come with a lag. So we do continue receiving them now, of course, period in H2 and some of them also next year. So it's split between the both financial years.
Great.
Thank you for taking all my questions.
There are currently no further questions on the conference line. We will now move on to the questions received through the webcast page. So our first question, are there plans to expand the Hibiscus trial beyond the current patient population, potentially to study effectiveness against long COVID?
That really is now dependent on the data. We don't need to make the decision In the near future, we need to look at the interim and the finalizing the hibiscus data so that the regulators are happy With the outcome and would allow us really to come to the market, that is the aim. But at the same time, having said that, we do have A number of experimentations ongoing and especially all the ischemic conditions where the repair fusion injury will take place Potentially are the target groups. So the answer is that, yes, we are expanding it. And also the ARDS, that is the condition we started with at the INTEREST trial.
That condition still requires additional help. We are Dreaming to have a mortality rates below 10, nothing like 30, 40, what is today, even with the current treatment with those patients.
Okay. Our next question is we have, Will the next Matins data release include findings from the increased closing schedules in order to study the effects on soluble Kleva 1?
There will be data coming out gradually, not necessarily everything at one time. And I don't I can't predict in which order can come. We also need to be careful when we analyze everything and verify if that is correct. I have a feeling that in the quarter 3, there will be some new data, but then also quarter 4 additional data. These are really massive amount of data we have collected from those patients.
And that is probably one of the reasons why the course So the trial analysis is also significant for us. But we need that data. We need to analyze that carefully. The answer is yes, But they come out when everything is in proper order.
Okay, ladies and gentlemen, that concludes today's question and answer session. I will now hand back to Doctor. Marku Jalkanen for his concluding remarks.
Thank you very much. Thank you for joining this meeting. I hope that you are convinced like us That the pexmarilimumab will be a very valuable addition to current treatments. And we need to help those who are refractory at the moment. That is really important.
And if that is done with the ex Marilema to open and unlock this hide me signal, then we are there. And with the hibiscus, we need COVID patients' additional help. There are unvaccinated people. There are new viruses most likely coming around. We now have a delta version.
Maybe influenza is wakening up and comes in a year or so. So these are life saving drug development we are doing at the moment, and we would like to thank for your support and patience. Really, I have said to some of the shareholders that longer our cancer trial will last Better off, yes, because then we are knowing that the patients are surviving. And that is really important. So with that, thank you, and we are looking forward to seeing you again rather soon.
Take care.