Hello, everybody. Welcome to our video conference dedicated to the annual results. We talked today about the fiscal year that ended on March 30 I am David Yuzzi, Head of Communication at Med and Cell, and I'm here in Tjaco in our headquarter with Christophe Duarte, our CEO. Hello, Christophe. And with Remi Harangu, our CFO hello, Remy.
Hello. We issued today a press release with all our financial results consolidated, okay? This press release is available on our website. Before we start, I want to remind you that you can send your question by using the chat tool on the right of your screen. We're going to try to answer the maximum of questions.
Thank you one more time to be with us tonight. And I'll start with you, Christophe. And Christophe, if you would, what should we remember for this year at Medincel?
Good evening, David. Good evening, everybody. Thank you for being present tonight and for your interest in Medincell. 2021 has been a very good year. Despite a very unstable environment, the company continued to execute and most of our projects have moved forward.
Extremely important and probably the biggest news of all was the positive results on Phase 3, our most advanced program, IRM. We also ended up with a very good financial situation. And before we go forward, I would like to really thank very sincerely all the people that work at or with Medincel, who have shown during this very unusual year resilience and adaptability. Thank you. Thank you, Christophe.
So you can see on your
screen the company portfolio to date.
And in green, you can see the programs that are developed with our partner, Teva Pharmaceuticals. In particular, on the right, you can see the program IRM, which reached a major milestone, as you said, Christophe, this year. Yes, David. It's as I said earlier, it's a major, major step for the company. We have communicated earlier in January the positive data on the Phase 3 on IRM.
Our partner, Teva, confirms, of course, that they are preparing the filing at the FDA to go commercial. They confirm that this filing should occur very soon during the summer, and we'll keep you informed. It's a major step for MedinCel for at least two reasons. I would say 3, of course, for the patients in schizophrenia. But because it's the last mile before commercial launch, the clock is taking very important step for Medin Cell.
And second, the technology on IRM is the same technology that we use throughout our programs. And so this Phase 3 validation brings a lot of credibility, additional credibility on our technology. It's always very difficult to predict regulatory delays, but Teva is telling us that they are expecting to do commercial launch in 2020, of course subject to a positive outcome of the regulatory process.
Thank you, Christophe. And what about the second asset with Teva, MDC, TK? Okay.
So Teva is confirming that the program is moving forward, that they are analyzing the first clinical trial data and that the analysis will inform the go to Phase 3 expected later. On the 3rd program, ANG, similarly, they are analyzing the preclinical data to inform the next steps of development. In both cases, natural steps in development.
Thank you, Christophe. Let's talk now about the 3rd program in Clinical, which is CWM with our partner AIC. Can you give us, sorry, an update?
Yes, definitely. Thank you, David. So we communicated in March the development plan of our partner. The large scale trials are planned to start this year. The plan is as follows.
So 3 clinical trials. The first one is a large scale toxicity trial, and our partner confirms that the start of this trial is imminent. You can actually see that it is now registered on clinicaltrials.gov. In parallel, the first efficacy trial of Phase III should start before the end of the year and our partner is planning a second Phase 3 later. Just to clarify, 2 efficacy Phase III trials in pain is a standard regulatory requirement.
Great news on top of all this, our partner indicated in March and we communicated on this that it got CAD23 1,000,000 financing to finance these activities. And Jaime, so that I don't make a mistake again, what is it in the U. S. Dollars?
It's about 19.90. Thank you, Jaime. U. S. Dollars.
And then we have other programs, David. Do you have more information on them?
Yes, we have other programs that for which we selected the lead candidates this year after the formulation activities. Can you give us an update?
Yes. So I should really precise again what we've said in past about this lead candidate stage. That's the stage when Medicell thinks that the formulation this particular lead candidate formulation has met its objectives in both in vitro and in vivo, and which means that Medincel is confident enough to move into the regulatory development steps. During the 2021 year, we have reached this stage for 4 programs: WWM, in contraception with the program that's developed by the Gates Foundation.
So you have the portfolio on your screen. We took over the program on the left of the portfolio. And then The WWM, sorry, the red one.
Yes. And our 3 internal programs, which I believe, David, are in blue? Yes. Are in blue. So it's a GRT in transplantation organ transplant, KPT in post surgery pain for in animal health and TTG in prophylactic against COVID-nineteen.
On top of that, just last Monday, we announced that a lead candidate formulation was selected by Medincell with United, the financial sponsor of this program. This program aims at breaking the transmission vector of malaria.
Thank you, Christophe. We have received questions by e mail in the recent days about the portfolio. We will address this question later during the presentation. But now I want to ask you, Remy, to Rainer Rangou, our CFO. I suggest to move on to our financial results this year.
Remy, can you detail our financial situation at the end of the fiscal year, so on March 31.
Thank you, David, and good evening, everybody. As you know, this year was a very challenging year due to the pandemic. However, despite the context, we have significantly strengthened our financial resources. We now can count on a financial visibility that brings us until mid-twenty 23, at least until the summer 2023. As of March 31, 2021, our cash and investments were of EUR 51,000,000 versus EUR 16,000,000 last year.
Out of this €51,000,000 we have €47,100,000 in cash and cash equivalent and €33,900,000 in current and non current assets, non risky.
Thank you, Remi. Can you explain us how we achieved that? Absolutely. So first,
we had a very significant increase in our revenues, almost multiplied by 3, +107 87 percent, sorry, to reach EUR 8.2 1,000,000 versus EUR 2.8 million the previous year. These revenues consist of services that we render mainly to the Gates Foundation and to Unitate for the contraceptive product for the first one and for the vector of the malaria for the latter one. And also, we had $5,000,000 in milestone payments due to the positive results of the Phase 3 of the program MDC IRM. If we add the research tax credit, then the income from the ordinary activities almost doubled compared to the previous year to reach EUR 11,800,000 and second, our financing strategy that we implemented last year, first, we renegotiated the 3rd tranche of the loan with the European Investment Bank, and we draw the last tranche of EUR 5,000,000 at the end of last year, we had access to a total of EUR 13,700,000 in the form of state guaranteed loans. And finally, as you know, we had the success of 2 capital raises that we did in June 2020 February 2021 with qualified French and international investors for a net amount of EUR 42,000,000.
Thank you, Remi. Thank you for this clarification. Can you give us an update on our expenses for the 2021 fiscal year?
Absolutely. The expenses reached €27,100,000 an increase of 8% compared to the previous year. R and D expenses, they represent 72% of those EUR 27,000,000 to reach €19,600,000 against €17,200,000 the previous year. These investments made it possible, among other things, to advance 4 programs in regulatory development during the year and a 5th one that we announced last Monday, MDC STM. Marketing and Business Development activities amounted for EUR 1.8 1,000,000, a decrease of 24%.
And finally, G and A expenses remained almost stable at €5,800,000 compared to €5,600,000 in the previous fiscal year.
Thank you, Remi. Can you tell us how the revenues and expenses could evolve during the current fiscal year, which, I remind you, began on April 1? Right. So for the for this running fiscal year, we can still count on revenues,
first composed of the service that we will continue rendering to the Gates Foundation and to Unitate. But in addition to that, we hope to receive a milestone link to the beginning of the Phase 3 for the second anti psychotic product. Regarding the expenses, we anticipate an increase due to the recent passage of several programs into regulatory development.
Thank you, Remi. To finish on this financial part, can you give us an update on the company debt?
As of March 31, the gross debt was EUR 42,300,000 and the net financial debt negative at minus EUR 8,800,000 versus EUR 32,700,000 at EUR 16.7 the year before. What is important to know is that 49% of that debt is due after April 1, 2024, when we're expecting to receive the regular income related to the royalties of the sales of the first products based on our technology.
Thank you, Remi. I suggest now to go straight to Q and A, starting with the question that we received by email prior to this call prior, sorry, to this call. And then we will respond to the question we received live, okay? First, I would like to start by pointing out that we received several questions regarding an individual shareholder who is selling stocks. Okay.
This is a shareholder who must officially declare his sales because he's a member of a family of a person who has responsibilities in the company. This is the reason why his sales are visible. As you can imagine, the company cannot comment on what individuals do with their personal wealth. Okay. So now I jump to the next question.
We were also asked to explain why we suspend the quotation of our stock for 1 day in January. So I precise it was on January 7. It corresponds to the announcement of positive results with Teva. We distribute a joint PR that day. And as you know, our partner is in the U.
S. So the press release was distributed during the opening hours of the market, of French market of Paris. That the reason why to guarantee equal information to all our shareholders, who have decided the suspension of the quotation. This is what we call a best practice. Okay, now Remi, can you please explain and we received the question why we didn't give individuals the opportunity to participate in our capital raising this year, the 2 capital raising.
And I will add despite the will of the company.
[SPEAKER JOSE RAFAEL FERNANDEZ:] Right. So very important is that it was a wish to do this operation with the public, the capital raises. However and we were preparing for us to do so. But some of you might know, this is a very long process. These activities of capital raise, we had to do them in a context that was very uncertain due to the pandemic crisis.
And we needed to take all the chances on our side to succeed these operations. So we had to do it quickly, and it wouldn't have been possible if we were to do this with the public. So we did that in the interest of the company and also the shareholders. And we, as shareholders, it's also in our interest.
Thank you, Remi. The other question is for you, Christophe. I read it. The CEO of Teva spoke several times about our programs and in particular, risperidone in lung acting injection. A few weeks ago, he was very positive and was talking about an NDA submission soon.
Do you have any details? When will the product will be commercialized? So you already answered partially this question, but maybe you have more details to share with us, Christophe.
So maybe David, I'll repeat what I said. Yes, I'll repeat what I said is that Teva is planning to file in the very near future, sometime this summer. Of course, we can't predict regulatory delays. It's always difficult to do, but Teva expects to do commercial launch in 2022, of course, subject to a positive outcome for the regulatory process. What the other information I can tell is to give is Teva is telling us that it plans to present data and detailed analysis of this during future scientific conferences and also in peer reviewed journals.
Thank you, Christophe. The next one is for you. Can you please give us details on the income from Teva
programs? Right. So I'll remind you of the contractual agreements and the income that is resulting from this contract with Teva. So we for each product, we are entitled to receive up to 122 $1,000,000 We have 3 products under development with Teva. So the total maximum of milestones that we can receive for the 3 products combined can reach up to $366,000,000 To that, we can add the royalty stream that will start with the 1st sales of the products of the long acting products.
So let me clarify. Again, this is something that we have mentioned already in the past and is that the majority of milestones will be linked to a certain level of sales. So the small portion of the milestones that we're entitled to correspond to development milestones. And as a reminder, I mentioned that earlier in the call that this year that ended on the 31st March 2021, we received and we recognized $5,000,000 in revenue due or thanks to the very positive results of the Phase III trial for the product NDC IRM.
Thank you, Remi. But higher end, Christophe, one more time. Do you know if the product will be distributed in other countries than the U. S?
Yes. What we know is
Christophe, your mic. Sorry.
I'm distracted. I guess it's late in France. Yes, at this stage, of course, our partner is evaluating other markets.
Thank you, Christophe. So let's talk now about the program, our COVID-nineteen program, which is called PTG at Medin Cell. Christophe, we received several questions.
Can you give us an update? Yes. Maybe David, I'll start with the context. Yes. And I'd like to structure the context with 3 parameters.
The first one is the pandemic and the virus. The second one is the vaccines. And the third one is Ivermectin. The situation has changed dramatically in the last year. It's only been a year.
The pandemic now is here to stay. We know the viruses are muting fast. On the vaccine side, everybody a year ago, nobody thought that the pharma would do such an extraordinary job on vaccines. Some people even thought there may not be vaccines ever, but vaccines are here and they have extremely high efficacy, higher than many of the vaccines of the past, at least for the RNA vaccines. On the IVM making front, there was very little data a year ago.
And since then, over 50 trials have been done with very positive signals. And as we speak, prestigious institutes and governments have started large scale RCT trials like the NIH, the University of Minnesota, the foundation DNDI in Africa. That's for the context. Now let's remind ourselves that at Medin Cell, we developed a long acting injectable of ivermectin. And in less than a year, our team has been able to reach the lead candidate stage and we expect to start clinical trials in 2022.
It's again here as well difficult to predict the timelines and they will depend on the context and the regulatory support
that we get. Thank you, Christopher. Another question that we sell we see, sorry, is that no, we have vaccines, okay. So is there still a place,
a space for our product for ivermectin? Yes. Thank you, David. Very good question. And it will allow me to precise some of our strategy on this.
The evolution of the pandemic and the current vaccines allowed us to check and confirm that there are populations that will be non responders to vaccines, the people where vaccines do not work. And in some of those populations, there will be segments that are at high risk when they get COVID. So there is a need and of course, it's an opportunity for prophylactic long acting. It is our primary target with a great potential value proposition. For the remainder, we'll see.
We cannot speculate today and it will depend on the evolution of the pandemic, the mutants and of course, the vaccine context.
Thank you, Christophe. Before we address the questions we received live, a last question about ivermectin. What are the other programs developed by MedENCEL with ivermectin?
So ivermectin is a very powerful molecule with many modes of action, which could be very useful in many indications. We talked about COVID. We talked about malaria. Maybe I'll zoom for a minute on malaria. We're not here to treat malaria.
The goal of this program is to help break the or reduce the malaria transition vector. We have shown in the past that by injecting cows with a tiny regular amount of adaMectin, the mosquitoes that bite the cows die. And if you translate this to a human population during the risky season, you can imagine that it should have an impact for the malaria transmission, which is done by the vector, the mosquitoes. We are working on this with very well known scientific institutes, and this program is funded again by Unitell. For opportunities beyond COVID and malaria, we are actively evaluating other indications, and we'll talk about them when time comes.
Thank you, Christophe. So now we'll answer the question. We have received 3 questions live. So the first one is for Doremi. Can you please outline the debt position, repayment schedule and interest cost?
Okay. So the debt amount for the gross debt is €42,300,000 I mentioned before the big 49% of that debt is payable after April 2024. Prior to that date, the major big installment is the payment of the first tranche to the European Investment Bank for about EUR 9,000,000. We have different levels of debt. The main one today is the debt with the European Investment Bank.
So I remind you, we got a loan 3 years ago, March 2018 of 2020 that we could draw up to EUR 20,000,000 from the European Investment Bank, 3 kinds of remuneration to them of low cash, capitalized interest rates and a variable remuneration for the products that are financed by them. The average cost of that debt is of around 5%. Then the second right now, the second biggest debt that we have are the state guaranteed loans that we got last year, EUR 13.7 percent and the interest rates here are very low compared to the ones that I mentioned. So we're talking about something around 1%. So these were instruments that were done by that were implemented by the French government.
It's the French banks that give those loans to the companies. However, these loans are guaranteed at 90% by the French government. So very low interest there.
Thank you very much. Christophe, the next question is for you, and it's a little bit provocative. So I really can't. Hello, question for Christophe. If you have to choose between the vaccine and ivermectin, what will be your option?
And especially if you had to use them on you, what choice would you make?
It's hard I can't answer this question. Vaccines are available. A long acting vamectin is not. So the future will tell. I think it will depend mostly again on the evolution of the context, the pandemic and the mutants and also on the target population.
Thank you.
And the last question for you, Christophe, on more time about our TTG program. Very interesting question. Christophe, so it won't be the last one because we have another question that arrived, but I ask you this one. Why do you need a long acting ivermectin when you can take oral products?
Well, there are several reasons. When you have a long acting, of course, it helps with compliance. And the more at risk you are, the more you need a solution that supports compliance, same in schizophrenia for example and it's and the value is recognized by the industry and payers. When you do a long acting, you can have a more stable release, which may reduce the variability of the other meeting concentrations. That will be confirmed or not during the next step.
And also, I think on the societal point of view, when you are elongating injections, you know that the person takes its treatment. If you don't have this tool, you don't know. And knowing that the person is protected is extremely valuable.
And the last question will be for you, Remi. Is the Teva loan cleared now?
Right. So under the current agreements with Teva for this loan, as a reminder, Teva gave Merencell a loan of €15,000,000 almost 5 years ago in 2016 of €15,000,000 in total. Now the interests were high at 10%. There was some capitalized interest. And in the current agreement, there is a part of repayment that should be done to Teva.
Now with the capital raises that we've done, with the milestones that we have received with Teva, this loan has gone down to about €1,000,000 So
So not clear, but close to? Thank you. So no more questions. So I think we reached the end. So Christophe, I leave you the floor for last one.
Hi, Mike this time. Yes. Thank you, David. Again, a very good year. If there was one thing I would like to remind ourselves of is the successful Phase 3 data, which opens the door to the last mile before commercial launch.
It's exciting for us and quite also moving. It's been many years since we've grown the company to reach this stage. And so we are looking forward to the next milestone.
Thank you very much. Thank you, Remi. Thank you, Christophe. Before we leave, I'll remind you that this video conference and its transcript will be available on our website. So it is Lilian.
Ciao everybody. Ciao Raimi. Ciao Christophe. See you soon. Bye.
Bye. Thank you everyone.
Thank you, David. And thank you to all for again your interest in MEDLINE Cell and your continuing support. And have a great day. You know, most of you are in the U. S.
And we are looking forward to talking to you soon. Thank you. Bye.
Bye.