Hello, and welcome to Transgene 2021 Full Year Results and Business Update. My name is Suzanne, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over to your host, Cécile-Victoire Rasenberger, Junior Corporate Communication and Head IR Manager, to begin today's conference. Thank you.
Hello, everyone. I'm Cécile-Victoire Rasenberger, part of the IR team at Transgene. During our results call today, Hedi Ben Brahim, Chairman and CEO, will provide you with an overview of the important progress we have made during the period. Jean-Philippe Del, Chief Financial Officer, will provide an update on the financials. After both Jean-Philippe and Hedi will be available to answer the questions. Before I turn the call over to Hedi Ben Brahim, I would like to remind everyone that today's discussion contains forward-looking statements which are subject to numerous risks and uncertainties. The presentation on the webcast can be accessed via the investor page of our website, www.transgene.fr, and at the press release issued today. If you are listening to this webcast via the Internet, you will not be able to ask questions.
If you wish to ask questions, please make sure you join us via one of the conference call numbers that are available in today's press release. With this short introduction, I will now turn the call over to Hedi Ben Brahim.
Thank you, Cécile, and welcome everyone. Thank you very much for joining today's update call. Today I would like to start by outlining the significant progress that we have made across our pipeline in 2021, the details of which are set out in this slide. As you can see, we have delivered the first highly promising data with TG4050. We've continued to progress the clinical development of TG471 and to generate exciting clinical and pre-clinical data with our novel oncolytic viruses, TG72 and BT-001. We have been able to deliver this important milestone based on our world-leading technologies, which are designed to allow us to deliver virus-powered immunotherapies to greatly improve the treatment of patients with solid tumors.
I think you are now quite familiar with our portfolio, with our four products in clinic, two therapeutic vaccine and two oncolytic viruses, plus, the new partnership we have with AstraZeneca and the first license option, and the partnership we disclosed recently with PersonGen, and we'll come back on all these products right away. I would like to start by reviewing what has been a major step for the development of TG4050 for individualized cancer vaccine, which is based on myvac, our cutting-edge proprietary viral vector vaccine platform. You know myvac is built on an improved viral delivery system based on the MVA strain that we have been using for previously developed vaccines. This has been engineered to enhance priming of the immune response against the target neoantigens.
The potential of this individualized vaccine has been enhanced via the incorporation of multiple highly immune technologies. This include access to our partner, NEC, the proprietary AI technology, as well as our bioengineering technology, which together allow us to select the best cancer mutation or neoantigen and to ensure that they are able to generate the optimal immune response for every patient being treated. The further key component of myvac is a process that we have developed in conjunction with a range of partners, which has allowed us to design and manufacture each individualized vaccine for clinical use within the timeframe that is suitable for the patient's journey. As with any new technology approach, we are continuing to work on optimizing our myvac production capabilities. As you know, we are currently conducting two clinical trials with TG4050 in Europe and U.S. for ovarian cancer and head and neck cancer.
We are very grateful for the support of all the physicians and support staff and patients who are participating in these studies. I would like especially to mention Dr. Matthew Block from the Mayo Clinic in the U.S., who is leading the ovarian cancer study, and Professor Christian Ottensmeier from The Clatterbridge Cancer Centre in Liverpool, who is leading the head and neck trial. Last November, we achieved a major milestone in the development of the myvac platform and TG4050 when we announced a range of clinical and immune response data on the first six patients included in our two clinical studies. These data are highly promising and give us great confidence in the potential of TG4050 as an individualized immunotherapy.
We saw that TG4050 had a good safety profile with side effects similar to previous observations with the MVA viral vector, mainly mild and transient symptoms, primary injection site reactions, and was able to prime the immune system. Very importantly, we saw the first signs of clinical activities. I would like to now briefly run through the key data that we already released in more detail. The first patients observed an unprecedented rate of T-cell response against the specific tumor epitopes that we were able to measure in the four patients that we've evaluated. In order to generate TG4050 for each patient, we start with a sample from the patient obtained through routine medical procedures.
From this sample, we are able to identify mutations, both epitopes of class one and class two, and we use this to design a vaccine able to induce multiple T-cell response in the patient. In the evaluable patients, we saw 6-11 responses to the vaccine epitopes that we were able to detect at day 64 following the initiation of the treatment. Responses were observed for all subjects in both indications with a median of 10 positive responses per patient. These responses were either amplifications of pre-existing responses or de novo responses induced during the vaccination. These T-cell responses data are highly encouraging. We are also very pleased with the immune cell data that we have outlined at the bottom of the slide. These data show how the immune cell population in the patient changes, indicating that TG4050 was generating an anti-tumor response.
What we observed was more precisely a decrease in naive and memory CD4 and CD8 T-cell over the course of the treatment period. While we observed an increase in effector subgroups of CD4 and CD8 T-cells primed by immunogen in TG4050 at day 64. This maturation and differentiation of CD4 and CD8 into effector cells are consistent with the development of an active adaptive response. In addition, the phenotype of the NK cells suggests ongoing anti-tumor activity as a result of TG4050. I would now like to briefly summarize the early clinical data we observed in the first six patients. Four from the ovarian cancer trial and two from the head and neck trial. In the ovarian study, we observed one patient who after an elevation of CA-125, experienced a normalization of the ovarian cancer biomarker when treated with TG4050.
This patient saw no clinical progression of her cancer during the nine-month follow-up period until death for an unrelated chronic illness. A second patient with radiologic lesions was stable and still under treatment nine months after the first injection in November last year. Turning to the head and neck study, one patient achieved stable disease and was still under treatment 10 months after the first injection, while a second patient achieved stable disease and was still under treatment five months after the first injection. As we have indicated previously, we intend to provide updated clinical data for both studies with TG4050 at the AACR meeting, which is taking place next month. We also intend to release more clinical data during the course of 2022 at other major conferences.
The immune and clinical data we are generating from these first two clinical trials will be used to identify the most appropriate clinical development path for TG4050, including a phase II trial, which is expected to start in 2023. Turning to TG4071, which is also an MVA-based therapy vaccine, we are progressing our randomized phase II trial based on very encouraging phase I-B, two data we released two years ago. In this trial, TG4071 is being evaluated in combination with Avelumab versus Avelumab alone in patients with HPV 16-positive oropharyngeal cancers without liver metastasis. In the phase I-B part of the study, it was clear that the absence of liver metastasis was key to delivering the best outcomes from the combination of TG4071 and Avelumab therapy.
I'm pleased with the pace of recruitment into the study, and we should be able to proceed to an interim analysis on around 50 patients enrolled in the fourth quarter of 2022. This trial has been designed to demonstrate the contribution of TG4071 plus avelumab versus avelumab alone in a population of patients that mostly do not receive prior therapy with checkpoint blockers. A positive interim analysis will allow us to further progress the trial and enroll up to a further 100 patients with the aim to demonstrate the power of the combination regimen. We have also been making extremely good progress with our pipeline of oncolytic viruses based on our industry-leading Invir.IO platform. We believe that this unique platform. We are well placed to generate multiple OVs oncolytic viruses to treat a range of solid tumors and metastases.
We have set out the unique features and key benefits of the Invir.IO Platform, which we believe make us a world leader in the oncolytic virus space. This includes the large viral capacity, up to 25 kilobases, allowing it to carry multiple payloads, tumor-specific replication by design, tumor eradication including metastasis, and safe and effective when administered via a range of routes, including the intravenous route. We have been continuing to make excellent progress with our second oncolytic virus, BT-001 from our Invir.IO platform, which we are developing with BioInvent. BT-001 has been designed to combine the powerful activity of BioInvent's anti-CTLA-4 antibody, which will deplete Tregs and increase the immune competency of the tumor with the oncolytic virus ability to stimulate a strong immune response.
BT-001 is expected to show a better tolerability profile in humans than an anti-CTLA-4 antibody administered via systemic routes. This outcome has already been seen in the preclinical models. In the last 12 months, we have published very promising preclinical data in high impact journals and presented this data at major conferences where they have generated significant interest. This data generated in several tumor models support the dual mode of actions of BT-001 with high intra-tumoral expression of an immune checkpoint inhibiting antibody targeting CTLA-4, along with a robust anti-tumoral activity. We are currently evaluating BT-001 in a phase I and II- A study with the support of Merck KGaA and Pfizer, which supply Avelumab. We are looking forward to presenting the first data from this study in Q2 2022, allowing us to move to the next part of the trial.
The aim is to rapidly generate data in combination with a checkpoint blocker and identify the most promising solid tumors indication for this regimen to target. With regard to the intravenous administration, we are pleased that the first clinical data with TG6002, which were presented at AACR and ESMO last year, showed it could successfully be administered by the intravenous route. We are really confident that developing OVs that can be delivered by the IV route would be a major event and would provide an extraordinary opportunity to enlarge the number of cancers that could be treated by this novel class of therapeutics. Importantly, we have demonstrated that even at the highest dose tested, the safety profile of TG6002 when given via the IV route meets our expectations.
The dose cohorts also provided evidence that the virus is able to reach the tumor sites, replicate within the tumors, and express a fully functional transgene, as assessed by the detection of 5-FU chemotherapy in the tumor of the patients. This data and the fact that we have seen much higher concentration of chemotherapy in the tumor sites than in the blood and plasma of the patients confirm the delivery capabilities of the virus backbone of TG6002. Outside our own oncolytic virus pipeline, we were pleased to announce in December 2021 that our partner AstraZeneca had decided to exercise its first license option for an Invir.IO candidate generated from our collaboration that we signed in 2019.
As a result, Transgene received $8 million as an option exercise payment and is eligible to receive development, regulatory, and sales-based milestone payments, as well as a royalty based on future commercial sales. The 2019 collaboration we signed with AstraZeneca covers five innovative Invir.IO-based oncolytic immunotherapies, which are based on our proprietary backbone, integrating one or more transgenes chosen by AstraZeneca. Under the collaboration, AstraZeneca will oversee the clinical development of the OVs it selects to license. We have provided a summary of the attraction of our highly productive Invir.IO platform and the multiple opportunities we have to generate significant shareholder value.
Following this overview of this exciting progress we have made with our pipeline of immunotherapies in the last 15 months, I would like to hand you over to Jean-Philippe, who will run you through our 2021 results and our finances.
Thank you, Hedi. A few words on finance now. Our P&L in 2021 was in line with our expectations, with higher income from our collaboration and also higher costs as we expanded on our investment in clinical trials. Our income from collaboration and licensing agreements increased to EUR 10 million in 2021 from EUR 3 million in 2020, with mainly the income recognized from the collaboration with AstraZeneca over the period amounting to EUR 9.9 million in 2021. This increase is largely due to the first license option exercised by AstraZeneca in 2021 for EUR 7.1 million for the first oncolytic virus developed by Transgene. In 2021, public funding for research expenses accounted for EUR 7 million in income versus EUR 6.4 million in 2020, and this is mainly due to the research tax credit.
Turning now to costs throughout the period. Operating expenses increased to EUR 40.9 million in 2021 from EUR 33.9 million last year due to the acceleration in our clinical development. Net financial income resulted in a net income of EUR 4 million in 2021 compared to a net income of EUR 6.8 million in 2020. Finally, the net loss was EUR 19.5 million in 2021, compared with a net loss of EUR 17.2 million in 2020. The net loss per share was 0.21 EUR per share in 2021, same as in 2020. We have set out here in more detail the breakdown of our R&D expenses, which increased to EUR 32.9 million in 2021 from EUR 27.3 million in 2020.
Within this, staff costs allocated to R&D amounted to EUR 12.4 million in 2021 compared to EUR 11.5 million in 2020 due to the increase in FTE for the manufacturing activities. Share-based payments amounted to EUR 1.7 million in 2021 versus EUR 0.8 million last year with a new free share plan granted in 2021. External expenses for clinical projects amounted to EUR 6.3 million in 2021 compared to EUR 5.4 million in 2020. This increase is mainly due to the start of new clinical trials, notably with TG4001 and BT-001, and the acceleration of clinical trials expenses for TG4050.
The other external expenses, including expenses for research and manufacturing, were at EUR 4.5 million in 2021 versus EUR 2.4 million in 2020. This increase is mainly related to the start of a new process development project in 2021. Lastly, operating expenses, including the cost of operating research and manufacturing laboratories, amounted to EUR 5.1 million in 2021 compared to EUR 4.6 million in 2020. This increase is mainly due to internal manufacturing activities, especially for the individualized vaccine TG4050. Here we provide more details of our financial position. The cash burn in 2021 was at EUR 10 million, excluding the capital increase, compared with EUR 17 million in 2020. I remind you that we received EUR 17.4 million in September of 2021, with a partial sale of the Tasly Biopharmaceuticals shares.
At the end of 2021, we had EUR 49.6 million in cash and cash equivalents following the completion of a EUR 34.1 million private placement in June 2021. In addition, I remind you that we still hold Tasly Biopharmaceuticals shares that are valued at EUR 18.9 million at the end of December 2021. As a result, we have the financial visibility until the end of 2023, a period during which we expect to deliver multiple key milestones across the pipeline. Few words to conclude on ESG. We are really proud to share with you our latest ESG innovations that are reflective of continuing efforts and commitment on this front as well. With that, we will now take your questions.
Thank you. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. The first question comes from the line of Jean-Jacques Le Fur from Bryan Garnier. Please go ahead.
Evening, everyone. Three questions if I may. The first one is with the arrival of Steven Bloom, as a business intelligence position, is it a clear signal that you want to accelerate or to sign significant agreements like some of your competitors did? I think about Vaccibody. I don't remember the name of the new name of this company, but Vaccibody signed with Genentech. Or will you prefer smaller agreements, if I may say, like the one you signed with AstraZeneca? Despite this one could be interesting, but on upfront and so on it was quite smaller than what we saw with Vaccibody. That's my first question. Second question is a financial one.
With cash in hands, including Tasly shares of about EUR 68 million, is it fair to assume a linear spending through 2022 and 2023? I mean about EUR 34 million each year? Or would we see a sort of, let's say EUR 20 million or EUR 25 million this year and acceleration in 2023 with additional clinical trials? Second question. My last question is, despite I understand that you will give update at AACR for TG4050, sorry, do you have any idea of what is the status of these three patients for which you gave results, clinical results last November? Do these patients continue to be stable? Are they in good health? Do you have some visibility on how they are today? Many thanks.
Thank you, Jean-Jacques. We start with question one and three, and then we leave two seconds to Jean-Philippe. The first is the arrival of Steven. We didn't mention it, but Steve is in the room, so I won't say anything bad against Steve today. We are very proud, very happy to have him on board. I mean, he's been here five weeks.
Already making a difference and giving us lots more exposure in industry and in the U.S., bringing his expertise and his energy. That's great. Yes, I think we have a great portfolio with the products that start with the clinical that you know, and the other ones that we are developing that are still at preclinical stage and we have not disclosed, but are moving forward. Yes, we are interested in making major deals. We know we have a rich portfolio and once again, other products coming, so we won't push them until the end of all of them for sure. Significant deals could be possible. You mentioned the AstraZeneca deal. I think it was a great deal.
Of course, if we did the same today, I hope and it would work that we wouldn't have the same financial terms. We did it three years ago when the platform was much, much younger, much less advanced. That is true. For example, the IV route was just an idea, just a promise. Today, we have great data. The signature itself by AstraZeneca brings a lot of value. I think it's a great deal. Today I would be happy to have similar deals, but of course, with other financial terms. Regarding AACR, yes, we're committed on TG4050. You asked me if we have the status of this session. Yes, we have. Unfortunately, today we cannot disclose any more data. Once again, they will be shared next month in April.
I mean, if I can share my mood, I'm very much looking forward to this data. You know that individualized treatment is complex. So that we have to set the bar very high in terms of results. We are excited. We were excited in November to see the first sign of clinical activities on the first patients. I'm sure we have very interesting data to share at ACR on how these patients are going. Are they still fine? In the head and neck patients, how are the patients that don't receive the treatment evolving? That would be a good benchmark. Please wait just a few more weeks.
Yes. I take this your second question, Jean-Jacques Le Fur. If you have looked to our P&L, you have probably seen that we have already increased our operating expenses this year compared to last year. We were at EUR 34 million for operating expenses. We are in 2021 at EUR 40 million. It means that the trend is really to increase this expenses level. For the future, the difference will not be so important, but we for sure expect to have a slight increase in operating expenses because all our clinical products are today in clinical developments.
Okay, great. Many thanks and congrats again for this, very good results we saw last year.
Thanks, Jack.
The next question comes from the line of Arsene Guekam from Kepler. Please go ahead.
Hello, gentlemen. I have only two question, and this question are linked with the previous asked by Jean-Jacques. Could you update us on your partnership strategy for you? When do you think it will be the good time to license part of your portfolio? This is the first question. Second one is when I have a look on your oncolytic virus platform, I think this platform is versatile, so you can engineer a lot of different oncolytic viruses. However, you don't have all the know-how in-house. You need to sign some partnership. My question is, are you going to accelerate the number of partnership in order to increase your portfolio in this field?
Thanks. Great question. On the partnerships, of course, we have our ideas on when they make the most sense, but also depends on what the partners in front of us are interested in. I think there are some natural windows, for example, with TG4001 having some very important milestone at the end of the year and with the intermediate data, there will be a window of opportunity. We will be preparing the next trial at that time. There will be a question to assess the interest of a partnership at that stage or to continue the development on our own. The same for TG4050 now with the first read out. We are spreading the message.
We are getting more and more patients. On the contrary, for example, BT-001, we are still in the monotherapy ascending dose. So today the product is still young. I think it needs a bit more maturation to so that we could go out and promote it. If you want to make any comments or
At the end of the day, the strategy is to license this drug, not to continue the development by your own until the end.
Until the end, for sure, it's too far and probably not the right time to talk about it. For example, for TG4050 we will go into phase II and we will continue to lead that product on TG4050. It's not opposed to a copartnership, but still we will keep the control. BT-001. Of course, I mean, we are still in the monotherapy phase I. We will continue to push that product forward, preparing phase II after that. We still have much time to create value and more data. TG4001, of course, it's much more advanced.
We must have a plan on our own to push that product at the next phase. That could be a registration trial. It should be a registration trial. Once again, let's wait to see the data at the end of the year. We'll see the segment that we get outside the level of TFF that we can reach. We should be ready to continue on our own or discuss the partnership. We will assess the best decision at that time. Regarding the oncolytic virus platform, you're right that it's very versatile. We can put cytokines, we can put monoclonal antibodies and even more crazy things in it, and we can put several of them. We want to develop the best possible product.
We are experts in virus. We have also some expertise of some payload that we can put in it. But we know that on some topics there are partners out there that can bring us technology bricks that we don't have. That's what we did with BT-001, and I think it's better for us to do a best in class with the partners than doing alone a product that will not be at the right level. In terms of partnership for the oncolytic virus, part of the development will be on our own. 100% with our payload and new products that could be also with partners. I think we continue to do both. Once again, when it makes the most sense.
When we think we can have the best product in-house, we'll do that. When we need a partner, we'll do that without hesitation. We have disclosed, I mean, you know, the partnership with PersonGen, but it's the same because it's our product combined with their product. We are already preparing new partnership where we can encode an outside payload within our oncolytic virus platform.
Good. Okay. Thanks.
Thank you.
We have no further questions in the queue. As a final reminder, if you'd like to ask a question, please press star one on your keypad now. There are no further questions, so I'll hand back to your host to complete today's conference.
Thank you. Thanks, everybody, for your time and your very stimulating questions. I'm very confident that our proprietary, attractive clinical and pre-clinical pipeline of immunotherapies will allow Transgene to deliver multiple high-value milestones in the years to come. These achievements will result in Transgene to become and to be clearly recognized as a key innovator in the immuno-oncology space globally. We also believe that by successfully delivering our programs and strategy, we'll be able to generate significant value for shareholders and improve options for patients. With this, I would like to conclude today's call. Thank you very much and goodbye.
Thank you for joining today's call. You may now disconnect.