Good afternoon, welcome to the Sareum Holdings PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press Send. The company may not be in a position to answer every question it receives during the meeting itself. The company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Chairman, Dr. Stephen Parker. Good afternoon, sir.
Hello. Good afternoon, everybody. Thank you for joining the call, as we go through the half year results and the various progress that we've made in the last few months to discuss. With that, I'm gonna hand you over to Tim Mitchell, our CEO, who will take you through the presentation and guide the Q&A. Thank you.
Thank you, Stephen. Good morning, everybody. Thank you for joining us this afternoon. Sorry, good afternoon. I'm here with our CSO, John Reader. John and I will take you through the results presentation, then we'll hand back to Alex, who will host the Q&A session. Let me start with highlights from the past period. The main news for us, as we announced on Monday, is that we've applied to run the phase I clinical trial in Australia on SDC-1801. That's our TYK2/ JAK1 inhibitor for autoimmune diseases. The preparatory work for this trial is all completed. We're expecting a decision on approval by the HREC, that's the Human Research Ethics Committee, and acceptance to the Clinical Trial Notification by Australia's Therapeutic Goods Administration in the next few months.
We'll look to open this trial and start dosing healthy volunteers shortly after receiving this approval. We'll go into more details on the study later on. If we first look at the other programs that we have running, for SDC-1802, that's the TYK2/JAK1 inhibitor for cancer immunotherapy. We continue to work on the translational studies to identify the best cancer application for this candidate. We note that our experience with the closely related SDC-1801 molecule will help us plan and execute the further pre-clinical studies. For SRA737, the Chk1 inhibitor for cancers, we've reported that our co-development partners, CPF, have now received the clinical study reports and other documents back from Sierra Oncology, and we're evaluating the potential future development opportunities alongside CPF.
We've also noted an expansion of the SRA737 patent estate with the granting in the U.S. of the patent describing the combination of SRA737 with PARP inhibitors as a method of treating cancer. On the financial side, we reported a loss after tax of GBP 1.4 million, so that's higher than last year. It reflects the setup costs needed to start clinical trials and a cash balance of GBP 2.9 million. Looking at where our programs are on the development pipeline, we see that SDC-1801 at the top there is about to enter clinical phase I. As well as the potential to treat autoimmune diseases such as psoriasis, which will be our initial focus.
There's still the opportunity to investigate the treatment of respiratory symptoms arising from viral infections such as COVID-19. Our phase I-A trial is expected to enable all applications of SDC-1801. Our primary focus over the past few months has been on SDC-1801, as you can imagine. SDC-1802 still remains there in preclinical development. SRA737 was formally returned to us in January this year, having completed two phase I/II trials while it was under license to Sierra Oncology. These were as a monotherapy and in combination with low-dose gemcitabine. There's also preclinical data to identify effective combinations of SRA737 with a number of targeted therapeutics, including cancer immunotherapies and the PARP inhibitors I mentioned earlier.
As we know, our main focus is on our TYK2/ JAK1 inhibitor, that's SDC-1801 for autoimmune diseases. We've seen, particularly in the last few months, that the TYK and JAK space is being increasingly recognized as an area of great commercial interest. TYK2 was the first TYK2 specific inhibitor to be approved for sale. That was in September last year. Importantly, the approval didn't come with any of the black box warnings for severe side effects that we've seen in the first generation JAK inhibitors such as tofacitinib and baricitinib. We've seen good clinical validation by BMS and others for TYK2 and dual TYK2/ JAK1 inhibitors in both psoriasis and psoriatic arthritis.
There are mid and late-stage clinical trials ongoing for TYK2 and TYK2/ JAK1 inhibitors in several other autoimmune diseases, including lupus and inflammatory bowel diseases. We're expecting to see readouts from these over the next few years. In terms of commercials, we note earlier this year that Takeda acquired Nimbus Therapeutics' late-stage TYK2 inhibitor for an upfront cash payment of $4 billion, which I think very nicely underscores the commercial potential of these types of inhibitors. Also that BMS are forecasting $4 billion sales for TYK2 inhibitor in 2029. For the respiratory symptoms arising from viral infections, we note that two of the first generation JAK inhibitors, that's tofacitinib and baricitinib, have been approved for use in some COVID-19 patients. I'm gonna hand over to John, who will take you through the scientific programs in more details.
Yeah. Thank you, Tim, and good afternoon, everybody. Inhibition of the JAK family of kinases can restore immune system balance. TYK2 and JAK1 are both involved in a signaling pathway that can be deregulated in multiple autoimmune diseases. What we've shown in the schematic on this slide is that TYK2 plays a very important role in signaling in the interferon-alpha, the IL-12, and the IL-23 cytokines. Deregulated interferon-alpha, IL-12, IL-23 signaling is associated with diseases such as psoriasis, inflammatory bowel diseases, and additional lupus, rheumatoid arthritis, resistance to immuno-oncology therapeutics, and of course, that's very important for SDC-1802, and viral bacterial pneumonia. The inhibition of both TYK2 and JAK1 has the potential to yield superior efficacy compared with agents that block just one of the two kinases.
We believe TYK2 and JAK1 are optimal targets for autoimmune diseases, targeting other kinases of the same family, so that's JAK2 and JAK3, has led to unwanted side effects in some patients. SDC-1801, therefore, is being positioned as an autoimmune disease therapeutic. The initial focus will be on psoriasis. That's an autoimmune condition that affects the skin. As you've heard recently, we have now applied to the Australian regulatory authorities to perform a phase I trial in Australia under the Clinical Trial Notification scheme. Once we have regulatory approval, there's a plan to commence the phase I-A trial, which will investigate the safety and tolerability of an oral formulation of capsules of SDC-1801 in healthy subjects.
Provided we get satisfactory safety data from that phase I-A study, we intend to commence a phase I-B clinical study in psoriasis patients next year. In preparation for the trial, the synthesis of SDC-1801 drug substance, that's the molecule itself, has been completed under GMP conditions. We have a surplus of material for the planned phase I clinical trials. We've completed manufacture of the capsules of SDC-1801 also under GMP conditions, which will be used in the phase I clinical trial. As I'm sure most of you are aware, we submitted last July an application for a clinical trial authorization to the MHRA in the U.K. We provided a robust preclinical data package. The preclinical data was generated in world-renowned and world-leading CROs.
In November, last year, the MHRA stipulated that they wanted an additional review of some of the preclinical data by the UK GLP Monitoring Authority. Unfortunately, to date, MHRA has not proceeded with the request of UK GLP Monitoring Authority. This is despite us asking them on repeated occasions to do that. In the meantime, and in parallel with these discussions, we looked at alternative locations to conduct the clinical trial. We looked at two or three territories in Europe and additionally Australia, and we identified Australia as the optimal route to progress SDC-1801. Australia is an ideal location for phase I studies.
It has state-of-the-art research facilities, a streamlined and efficient approval process, a good access to psoriasis patients, and significant tax incentives for companies to conduct research in Australia, so an allowance to claim up to 43.5% of eligible R&D expenditure as a cash payment. We've established the required local presence by setting up a legal entity in Australia that allows us to access the R&D tax credits. Moving on to SDC-1802. This is a molecule we're positioning as a cancer immunotherapy. It's an immunomodulating molecule that's demonstrated good efficacy in preclinical models of cancer. We need to complete our translational studies to define the optimal cancer application, which would allow us to select a patient population prior to commencing a phase I clinical trial.
As Tim mentioned earlier, the experience that we've gained in the development of SDC-1801 will greatly aid in the development of SDC-1802. The two molecules are derived from the same chemical class. The synthetic experience we've gained will really be beneficial in pushing forward with 1802. Moving on to our co-development pipeline then, we're talking about the CHK1 inhibitor, SRA737, targeting cancers. This was originally developed by Sareum in collaboration with several Cancer Research UK funded organizations, and including our current co-development partnership with the Cancer Research Technology Pioneer Fund, CPF. Under the terms of the co-development partnership, Sareum is entitled to 27.5% of commercialization revenues. The program so far has successfully completed two phase I/II clinical trials, which were funded by Sierra Oncology.
Sierra was subsequently purchased by GSK, that was through access to Sierra's myelofibrosis therapeutic, momelotinib. GSK, Sierra decided to return the program SRA737 to CPF. We've now received the clinical study reports, the other associated documents and data in March of this year from Sierra, and Sareum and CPF are evaluating potential development opportunities for SRA737. Okay, I'll hand you back now to Tim to take you through the rest of the presentation and to lead the Q&A session.
Thanks, John. We announced our half-year financials today, so I'll quickly take you through the main points of those. On the income statement here, we see an increase in operating expenses over the previous period. I've noted earlier, this reflects the increased costs to get the SDC-1801 TYK2/JAK1 inhibitor ready for its clinical trials. You'll see a tax line there, GBP 285. That's the R&D tax credit that we'll claim back later in the year as a cash credit. Of course, there's another six months of spend to add on top of that. On the balance sheet, we see cash of GBP 2.9 million. Okay.
I'll finish the presentation part then on a slide on where we see the value in Sareum and a particular focus on our SDC-1801 asset. We've noted the commercial potential, particularly in the TYK2 space, and the interest in the area from the pharmaceutical majors. BMS and Takeda are obviously heavily invested in the area. The science has been well validated, both in the laboratory and in the clinic, and the absence of black box warnings with the Sotyktu approval validates the good safety profile obtainable with TYK2 inhibitors. Psoriasis and other autoimmune diseases are a very large market opportunity, with psoriasis affecting over 60 million patients worldwide and BMS focusing sales of $4 billion for, so TYK2.
Now we have the opportunity to be a clinical stage player in this area with the first trials on 1801 expected to start very soon. Okay, I'll hand over to Alex to host the Q&A.
Tim, John, Stephen, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right-hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed by our investor dashboard. As you can see, we have received a number of questions throughout today's presentation, and thank you to all of the investors for submitting their questions. Alex, if I may just hand over to you to read out the questions and give responses where it's appropriate to do so, and I'll pick up from you at the end.
Great. Thank you. Okay, the first question is, given that the required GLP review has not yet taken place, meaning that any areas, errors or irregularities are currently unknown, what's to stop the Australian authorities from raising the same concerns?
Shall I take that and maybe add anything else, John? We've inquired amongst people who are, I suppose, have expert experience with the Australian authorities just to double and triple-check that this won't be an issue, and we're assured it won't. We're not expecting the same problems with the Australian or even European regulators as we have done with MHRA. We understand this is an MHRA-specific issue that we won't be encountering elsewhere.
Okay. Could you please tell us if there are any transferability issues from Australia for phase I applied for into other potential regions or regulators, for example, the U.S. or the U.K.?
Yes. First thing, human data generated in Australia is accepted by the FDA, by EMA, by MHRA, by the Japanese authority, whose acronym I've forgotten temporarily. Yeah, no, the data is perfectly acceptable to other regulatory authorities around the globe.
Great. What is the timescale for commencement of the trial following the CTN HREC approvals? The signed-off project plan with the sponsor CRO, is presumably just an indicative timeline.
I mean, I'm not gonna go into the details of exactly those timelines, but we have done everything that we can beforehand to enable us to start the trial as quickly as possible after we get the go-ahead from the Australian regulatory authorities. There should not be much of a delay between getting that approval and beginning the trial.
Great. Would 1801 have a therapeutic opportunity in endometriosis at all?
Pass. I'm not gonna I don't know is the honest truth.
Yeah. I've not seen that mentioned. Yeah, I'm not aware of it. Is it also.
We can have a look.
Mm.
We'll provide a written opinion on that. Certainly not something that I've come across in the past.
Okay. How does the U.K. tax credit for R&D following the budget compare to the mood music we were hearing beforehand? What more broadly do you think the U.K. government needs to do to encourage R&D here?
I think yeah, we're very pleased to see that tax credits have been pretty much restored. The Autumn Statement last year which said that R&D tax credits for SMEs were gonna be essentially halved. I think we were very disappointed to see. There's been extensive lobbying both by, I suppose, people in the industry personally, including myself, and then the BioIndustry Association have been very active in persuading the government to change its mind on that. R&D-intensive companies such as ourselves should be able to claim tax credits that I suppose I haven't done a line to line comparison, but they're very comparable to how they used to be. We're pleased to see that.
Then in terms of encouraging R&D here, I mean, you know, from our point of view, you know, there are issues with the MHRA. I think, you know, they're understaffed, overstretched, slow to respond. We've had all sorts of problems with them. So I understand that a big review of MHRA is ongoing, and obviously we will be telling our story to the BIA and other lobbying groups to make sure that the government understand the problems we've had.
Okay, great. There's a question on the Australian subsidiary. Can you elaborate a little bit more, give a little bit more detail, where is it, what type of entity it is, and what's it called?
Yeah. The name of the Australian subsidiary is Pampisford PTY Limited. It's registered in Victoria. It's a PO box, essentially. I mean, it has directors, and it has a existence, but it's purely there to enable us to claim the Australian tax credits, which I think we noted in the results statement, are a rather generous 43.5%. To do that, you need to bill the expenses in Australia through a company that's registered in Australia. We've set that up to do that.
Great. More on Australia. What is the process of patient recruitment in Australia and the timing thereof? Do we have a hospital lined up?
We have a clinical unit lined up for the phase I-A trial, so that will be in healthy subjects. Not performed in a hospital. Although it is actually on the grounds of a hospital, which is, which is very good from a, you know, a safety point of view. So all of these clinical units have recruitment processes, which involves large databases of volunteers who have already registered with the clinical unit. They've registered an interest in taking part in clinical trials in general. What the recruiters do is go through that database. They're searching for people who are suitable, you know, who meet the requirements to be included in our clinical trial.
In addition, in Australia, they can do lots of advertising using social media to look for volunteers for these trials. I think for the healthy subjects portion, again, I'm not anticipating any particular delays due to recruitment. Again, let's get into the trial and see how that pans out. Certainly at the moment, we're reassured that there won't be delays. For the patient part of the trial, we'll be working with dermatology clinics who will be referring patients, again, suitable for inclusion in the trial to the unit where the trial will take place. Again, it's not in a hospital, but it is of course accessing patients through the dermatology clinics.
Great. Thank you.
That was one of the another attraction of taking the trial to Australia is this availability of psoriasis patients.
Couple of questions on the MHRA again. What will happen to the costs incurred for the UK CTA? Will it be refunded?
Well, there's no application as such to submit to the MHRA so there are no actual costs to be refunded.
If the MHRA do respond and ultimately accept our submission, would we run trials in both territories, or are we now putting all our eggs in the Australia basket?
For the, certainly for the phase I-A trial, all our eggs are in the Australia basket. When it comes to expanding the trial for phase I-B, you know, let's never close any doors. It's possible that we could look for patients in other disease areas in the U.K. or in other European territories. Certainly not the plan at the moment, I wouldn't want to close any doors. You know, the trial will be performed in Australia. That's the plan. The MHRA application is over, I think.
Okay, great. Just moving on to SDC-1802. At what stage are the translational toxicology and manufacturing studies, and when do you expect the respective stages to be concluded?
We haven't given timelines for any of those things. The translational studies are in progress. It's an involved process. I would add that obviously SDC-1801 has been our priority in all of this, 1802 has necessarily taken a backseat there. Translational studies are in progress. Once those are complete and we're satisfied that we have a, you know, a good data pack with respect to potential efficacy of a molecule, we'll be beginning the toxicology studies. We have done some short-term acute tox studies with the molecule, all of which were fine. We'd need to get into the actual GLP toxicology studies to support Clinical Trial Application, wherever that may be. Manufacturing also we've not started, but certainly some of the steps are repeats of chemical synthesis steps used for the production of SDC-1801. I think we'd be able to get going very quickly on the actual manufacture of 1802.
Okay. Also on 1802, will you look to perform clinical trials for 1802 in Australia as well, given the disappointing lack of communication from the relevant authorities in the U.K.?
I think it's too early to say. I mean, obviously 1802 will begin clinical trials in patients. Australia's really built, you know, a very strong position in first in human studies in healthy subjects. I don't necessarily know of any particular advantages they have when it comes to patients. We'll be assessing all the possibilities, obviously mindful of our experience with MHRA in the past, which may guide our thinking. I think at the moment we're open-minded, and it will be quite a different phase I clinical trial to that envisaged for 1801.
Okay. Moving on to SRA737. Do you expect there to be any change to Sareum's existing 27.5% share in any future deal?
No. I suppose, I mean, you know, and looking at potential things that could happen to that, I suppose, you know, if we were to fund some further development, say another clinical trial, independent of CPF, we would have invested more in the program, and therefore we would expect to negotiate a higher percentage. No. As it stands, we, you know, our 27.5 % is maintained.
Is there active interest in SRA737, and what timescale can we expect to see the next steps of its commercialization?
We have a number of inquiries. We've received them. CPF, I understand, are dealing with them. We can't really comment on the stage of these inquiries or any timelines for them to complete.
Okay. Thank you. Just going back to 1801. Do you have a rule of thumb for how much per patient the phase I-A trial will cost?
I mean, yes. I mean, well, we know how much it's gonna cost, and we know how many patients we're gonna recruit, but it's, I suppose it's commercial confidential between us and the clinical unit.
Okay. There are a couple of questions relating to why the MHRA did not allow Sareum to proceed with the trial.
The MHRA requested some review of some of the preclinical data we submitted to them, through the UK GLP Monitoring Authority as to the UK Good Laboratory Practice Monitoring Authority. You know, which wouldn't have been a problem. We were sure that the data would have stood up. The request to do this review had to have come from MHRA. We asked MHRA to make that request, that was pretty much the point they stopped responding. We were kind of we were a bit stuck really. The review couldn't go ahead without MHRA requesting it, and MHRA were- Were not responding to our request to do that, and that's where we kinda came to a stop with MHRA.
Great. Just a couple have been sent in advance. What is the cash burn likely going forward?
We will not comment on that. Thank you very much.
I think that is the majority of the questions that we've had through.
Tim, John, thank you, I think you have addressed all those questions you can from investors. Of course, the company will review all questions submitted today, and we will publish those responses on the Investor Meet Company platform. Perhaps before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, Stephen, could I please just ask you for a few closing comments?
Yes, indeed. Well, again, thank you all for joining this call today. I hope it's been helpful to you. We do believe that we are very firmly in one of the most exciting periods of the company's history, and we will look forward to continuing to brief you and keep you appraised of progress. We do appreciate the commitment you show to the company, and we do, we do like and mostly enjoy the comments and questions that you ask. Thank you again. With that, we'll bring things to a close.
Tim, John, Stephen, thank you for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can best understand your views and expectations. This will only take a few moments to complete, and I'm sure we will be greatly valued by the company. On behalf of the management team of Sareum Holdings PLC, we'd like to thank you for attending today's presentation. Good afternoon to you all.