Earnings Call: H1 2021

Sep 22, 2021

Quarterly report

Hello, and welcome to the TransGen First Half twenty twenty one Financial Results and Business Update. My name is Jeff, and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen only. However, there will be the opportunity to ask questions. I will now hand you over to your host, Lucie Larrier to begin today's call. Thank you. Thank you, Jess, and hello, everyone. So I'm Lucie, Director of IR at Francine. During our call today, Hedib Ben Lain, Chairman and CEO of Francine, will provide you with a short overview of the important progress we have made during the period. After that, Jean Philippe Zaire, Chief Financial Officer Henrique Heimenaert, Chief Scientific Officer and Maude Grandly, Chief Medical Officer, will be available to answer all your questions. Before I turn the call over to Mr. Ben Rahim, I'd like to remind everyone that today's discussion contains forward looking statements, which are subject to numerous risks and uncertainties. The webcast can be accessed via the Investor page of our website and we have a press release issued today. If you're listening to the webcast via the Internet, you will not be able to ask questions. So if you wish to ask questions, please make sure that you join us via one of the conference call numbers that are available in today's press release. With a short introduction, I now turn over the call to Eddie Van Heijn. Thank you, Lucie, and hello, everyone. Thank you for joining today's update call. So I've been the CEO of Transient in the beginning of 2021, and the last 9 months have been a truly exciting place for me, the team and for the company. And it's also been a real pleasure to interact with you over the last 9 months. So today, I will focus on our key achievements since January. The year has seen a great deal of progress with CG-four thousand and fifty, our individualized cancer vaccine, which is based on MYVAQ, our cutting edge and proprietary viral vaccine platform. As you know, MYVAQ has 2 components. 1st, an improved viral delivery system built on the NDA strain that we've been using for our previous vaccines. It has been modified molecularly to induce a stronger priming of immune response against the target in digits. The second component of NIDALAC is a process allowing the design and manufacturing of the induction for clinical use and within a time frame that is suitable for the patient journey. For TIGS-four thousand and fifty, 2021 has been a very active year. We were able to dose the very first patient of the head and neck trial, where patients with ovarian cancer will already be treated in the U. S. Since fall 2020. Also, the opening of several clinical centers in Europe and U. S. Continue to support our 2 clinical trials. These sites have been added to the initial investigating centers that dosed the first patient in late 2020 and early 2021. This additional site will contribute to recruitment, but also demonstrate that the approach has the potential to be rolled out to multiple sites worldwide. This validates robustness of our entire supply chain for Tg4,050 from biopsy to manufacturing and injection to the patient. We continue to observe a high level of interest to participate in these studies, both from the clinicians and the patients. And I'm happy to report that the recruitment and pace of treatment are going well and in line with forecast. In January, we made a commitment to communicate the 1st data in Q4 20 plus month. I do confirm this time line has even narrowed the window of our communication. So you can expect this data in the 2nd part of November. What can you wait from us to report in terms of data of TEGS-four thousand and fifty in November? 1st, safety data. We have a good safety track record with our viral vaccines and our MEE backbone. Our product is customized using an artificial intelligence based system and could display potentially unprecedented strength in terms of immunogenicity. So it is necessary to make sure that Tg4-fifty is well tolerated, particularly with respect to potential immune related safety events. 2nd, a topic of key interest will be the immunogenicity of the vaccine. Obviously, you all know the importance of the T cell in the antitumor immune response, and this is central to the mechanism of action of this novel individualized immunotherapy. Unlike previous generation of vaccine, we are here addressing 30 new targets specific to each patient. This means that we'll be looking carefully at the hit rate of ejecting to see how good we are at selecting the right pathogens for each specific patient. All these data taken together are expected to validate the platform and could provide valuable insights on which to date the design of Phase 2 studies. Finally, we will provide you with available data on the actual antitumor activity in patients that have had a period of sufficient follow-up. These data will mature over time and will be enriched by using additional biomarkers like CA-one hundred and twenty five in ovarian cancer. We are looking to validate our MAIVA platform when compared to other personalized vaccine approaches. Our trials have specifically been designed to assess TG-fourteen fifty as the immunotherapy. And what we will see will result from our treatment only. This data will reflect the activity of the product in patients without adverse disease burden and therefore with a functional immune system. This monotherapy data will be highly useful if we look to undertake combination studies in the future. Together with the team, I am really looking forward to presenting you the initial Phase 1 data of TG-four thousand and fifty in the second half of November. Let's continue with our order of vaccine, TG-four thousand and one. You know it's an NDA based therapeutic vaccine, and it entered a randomized Phase II trial based on the very promising Phase IbII data. Positively, some patients from the earlier elements of the trial are still on treatment with CG-four thousand and one and nevelumab and are doing well. In this randomized Phase II trial, CG-four thousand and one is being evaluated in combination with nevelumab versus aveluabol in patients with HPV-sixteen positive androgenital cancer without liver metastasis. Regularity experiences have been obtained in France, Spain and the U. S. To trial enrolling the first patient in June that we've communicated. Again, I'm very happy to report that inclusion are in line with forecasts, so we should be able to proceed to an interim analysis on 50 patients around the end of 2020. This trial has been designed to demonstrate the contribution of CG-four thousand and one plus avelumab versus avelumab alone in population of patients that mostly do not receive prior therapy with checkpoint blockers. The positive interim analysis will allow us to further progress the trial and enroll around 150 patients overall with the aim to demonstrate the power of the combination regimen. In terms of our pipeline of oncolytic viruses, there has been also been several key achievements. The first clinical data with TGC002 that showed it could be successfully be administered by the intravenous route were presented at ESMO last week and AACR last spring. At Chongqing, we are subject that developing OVIs that can be delivered by the IDA route would be a major advance as it would provide an extraordinary opportunity to enlarge the number of cancers that could be treated by this number class of therapeutics. We have demonstrated that even at the highest dose tested, the safety profile of CG-six zero two, when given by the IV route, meets our expectations. The dose cohorts also provide its evidence the virus is able to reach the tumor, replicate within the tumor and express fully functional flanges as assessed by the detection of 5 gs chemotherapy in the tumor of patients. This is important as the same backbone is central to our Invesio platform and to its administration via the IV route. This clinical proof of concept of the feasibility of the IV route is key to continuing the development of TG-six seventy two and further progressing our ongoing collaboration with AstraZeneca. We finished on TGA-six seventy two, a few words on the next steps. We are now evaluating different administration schedules on the oncolytic. We expect to complete this course during the first half of twenty twenty two, with an addition of another dozens of patients. We will come back to you once we have completed this set, and we will expect to thus move to the Phase 2 part of the trial that will allow to assess the efficacy of the treatment. Moving to VT001. The first pancreatic virus based on our IVI platform has entered in the clinic and is in a Phase IIIa trial currently running patients in France and in Belgium. It has also received an IND clearance from the U. S. FDA. BCD01 has been designed to combine the powerful activity of bioinvent and CCDLA-four antibodies, which will deeply prevent an increased immune competency of the tumor with the OE's ability to stimulate a strong immune test response. BTZ001 is expected to show better tolerability profile in patients than that of an anti CDL4 antibody administered via systemic route. With BioEvent, we will be presenting a poster on our preclinical clinical data with BT01 at SITC in November. In parallel, the Phase III trial is progressing well, we are in the dose escalation phase of BT-one administered alone and directly into the tumor. We expect to release further data from SLB in the first half of next year, allowing us to move in the next part of the trial. Here, the aim is to rapidly generate data in combination with a checkpoint blocker and identify the most providing indication. A few words on finance. Our P and L in the first half of twenty twenty one was in line with our expectations. At the end of June, we had €48,100,000 in cash and cash equivalents following the success of a private placement of €4,000,000 in June. Also, you have noticed that we've just signed an agreement on the sale of 49% of the remaining shares we own in tax benefit biopharma certificates for $20,200,000 approximately €70,000,000 This share sale was undertaken to monetize part of our stake in this company. All this extend our financial visibility until the end of 2023, which means that we can deliver all of key anticipated milestones. I'm confident that the upcoming trials will demonstrate the potential of a strong portfolio of immunotherapies by generating significant benefit for patients with the aim of creating value for our shareholders. Thank you for listening. So with that, we'll now take your questions. And the first question comes from the line of Jean Jacques Lefeu from Bryan Garnier. Please go ahead. Good afternoon. Thank you for taking my question. I have a few financial questions regarding the Tasi shares. The first one is, when to be sure, I well understood, when you stated your financial visibility, you will have you have now a financial visibility until end of 2023. Does it include or not the USD 20,000,000 or EUR 70,000,000 coming from the sale of the Stasi shares? The second financial one is, what does the sale mean for the credit facility opened with Natixis? Does it change something? Do you have to reimburse something? So if you already drew some cash from this facility? And my third question is, despite I understand it's always difficult to comment clinical trials from competitor, but do you think is there any takeaways or lessons from the clinical data released by Griston at ESMO a few days ago with their individualized neoantigen vaccine, which is could be or which is a competitor to my VAC despite it's not the same indication. But is there any signal or things you get from these results and this trial for your own technology? Many thanks. Thank you, Jean Jacques. So of course, Jean Philippe will take you on the finance part and Eric will take there of maybe having a few words on Bridgestone. No, no, no. This is Jean Philippe. Thank you for your question. So first, regarding our cash visibility. So when we say that we have a cash visibility until the end of 2023, it includes, first, this last sale of Datti shares and also the sale of the Rubenik shares in the 2 years to come. So that's for your first question. For the second question regarding the credit line, we have not stood down on this credit line today. So the €15,000,000 credit line is still fully available. But as a result of this sale, the credit line will be canceled as soon as the proceeds are received because I remind you that this credit line is staged with our Tasi shares And as agreed with the contractually with Natixis, the amount available from this credit line has to be reduced by the amount provided from the sale of the shares. But the fact that we canceled this credit line has also no impact on our cash visibility because the debt line of this credit line is in the mid-twenty 3. Eric? Yes. Regarding the question on the Bridgestone, for sure, we saw those data. And frankly, we've been pretty impressed with the current results. Of course, that would validate the neoantigen based approach. That's for the good news. Maybe the concern is that it's very difficult to compare with their results in our world in the sense that their approach is based on 2 technologies is combined in a prime boost approach, both in the intramuscular way. So they are combining an adeno prime plus RNA based vaccines as a boost in more advanced cancers in combination with nivolumab and ipilimumab. So by saying that, I'm just telling the fact that we have made a completely different design. And we look for the efficacy of our product in monotherapy. So one side is that the good news that the neurodegenerative approach is providing so nice response rates, but difficult to compare at the same time regarding their design and their combined technologies. Okay. Barry, can you hear me any? Thanks. Thank you. Second question? The next question comes from the line of Sebastian van der Schuet from Kempen. Please go ahead. Hey, good afternoon, everyone. Thank you for taking my questions. Maybe you can go through them 1 by 1, if that's okay. So first, I had a couple of CT4000 and 1. So the interim analysis data for next year, year end, will this comprise a futility analysis? And if so, can you then even show data? And can you also remind us of what you believe would be the benchmark in that setting? Thank you for this question. So actually, this interim analysis is for sample size adjustment, meaning that we will analyze the magnitude of the difference in terms of PFS between the two study arms and define the number of additional patients we will need to add to the total population to detect a significant difference. So it is not a futility analysis per se. And in terms of benchmark, we have hypothesis that are set in the protocol, which means that we are expecting compared to avelumab single agent doubling of the progression free survival. Okay. And then will you be able to show data on progression free survival at that price point or not? Well, we will calculate the aim is not because the 50 patient is not that much to detect a significant difference. So the intent is not to show data in terms of progression free survival intent, it to calculate the number of additional patients, whether it's 50 or 100 additional patients to be added to the population, so that we will be in a position to show a significant difference. This is our intent because without significant difference, there is no meaning in what we could present. Sure. Okay. No, that's very clear. And then regarding TG-six thousand and two, can you maybe expand on what you have learned so far from the Phase I trial? And how you would progress when the Phase I trial is completed into in terms of which patient population you would target? So for DG6,002, the number one learning is that safety is pretty good because actually one reason for the trial is not completed is that we were not expecting to go that high in terms of those levels. So we have reached at the moment the 3 10 to the 9 dose level, meaning that we inject this amount of virus to the patients without having reached the maximal tolerated dose. So you can see that the safety profile is pretty good and much better that we have seen by the past with other VZ like pexavax. So that's number one learning because that's pretty important to be able to implement a Phase II trial. The number 2 learning is that we were able to detect the virus injected by IZUIT in the lesion in metastasis. So through biopsies, which were taken mainly from liver, but we have also some line biopsies. And therefore, we were able to detect the presence of the virus. And importantly, to detect the fact that the virus is replicating and expressing its transgene as established by the conversion of the product CybeSe to 5FU. So in all patients, we were able to detect within the tumor tissue the presence of 5 SU, which is critical. And as far as the future of the product is concerned, we are contemplating GI malignancies, so which may include and we are discussing with QOL our data, of course, this is an important step to define whether is it appropriate to go for colon cancer or pancreas cancer. So this is the kind of discussion we will have during the end of the year, beginning of next year, so that we would be in a good position to start an appropriate phase to trial to show the interest of the IBM of TG-six thousand and two. Okay. Very clear. Thank you. And then regarding CG-four thousand and fifty, will the data read out, will that be more orientated towards ovarian cancer or head and neck? Well, actually, if you maybe you remember the design of the 2 trials. One trial, ovarian cancer is an open trial, and we are following a well known biomarker, which is CA125, which is generally increased when the patients developed a relapse or tumor progression. And therefore, we are following carefully this biomarker to see what is the impact of the 40, 50 on the evolution of the biomarker. In the case of the head and neck trial, it's a randomized trial, which compare immediate treatment with the vaccine versus delayed treatment at the time of relapse. And we intend to compare the duration of relapse free survival between the two arms. Having said that, it's true that we there is some new biomarker, but we are not as vaccinated as the biomarker used in ovarian cancer CA125. I am thinking about ctDNA, which is a pretty new way of following the patients. But in the field of head and neck cancer, it is not yet totally validated as it might be in lung cancer, for instance. But this is something we are looking for. And will you also be able to check T cell specificity against each antigen that you will include in the vaccines for each patient? Did I understand that correctly? Maybe I will let you reconcile to the specific question. Sorry, I could not hear. Well, your question, can you say it again, please? Sure. So I was wondering whether for the next data readout, if you would be able to check cell specificity for each antigen that you will include in the vaccines? Yes. Okay, Simon. Thank you for saying that again. No, you're right. The plan is really to document the specific response against each single antigen. So we have designed the peptide arrays in that way. Of course, the number of positive T cells would be a criteria for the merit of the vaccine. We will also try to monitor the intensity of the specific T cell response. As you can imagine, it's not an easy task, but those quantifying the rate of positivity and the intensity of the key cell response are the 2 transcriptional goals. And everything has been made ready for that. And then my final question is on BTR-one. Can you maybe explain the differentiation from RP2 of revenue? And can you also expand on what type of data you will expect to report on for the BTO-one update in H122 and how many patients that will involve? Well, as far as the number of patients is concerned, it's a standard dose escalation trial, meaning that we are all 3 to patients per dose level. And at the moment, we are testing escalating those within different population of patients. It's not an intra, but an impaired patients do the escalations. And then maybe again, I will turn to Eric for the differentiation versus Recimmune staff. Yes. Of course, you are implying that the vector are very different. The payloads are also different in the sense that the antibody encoded by the virus has been tested for optimal Fc gamma engagement and the patient of the Tregs, but there are some kind of specific for the antibody. And regarding the vector, of course, we carefully look at the key features for the vaccine compared to HSV. But something that we plan to report that we have a paper submitted under enrollment, but you will get soon the full details on the difference for POCO. We observed, Ipin, Vaccinia and the reported paper on HSV. The major difference in terms of vector is that the T cell in the tumor and using memory T cells. So of course, we don't have head to head comparison with the ZV beta, but we believe that we have demonstrated something very strong in ZVACIMA. I think the line is not very good on your side. Sorry. Can you just repeat the last part the difference on the Vaccinia versus the JV maybe? Yes. In the paper that is about to be published, we documented on the properties of the vaccine as we attract T cells in the tumor microenvironment. And we also analyzed within the T cell repertoire, the level of memory T cells and we observed very good results. This was in my model, of course. We will do our best to detect if this is also true in human samples. Okay, great. Yes, thank you. That was very clear. Those were my questions. Thanks, Sebastian. The next question comes from the line of Arsen Gautam from Kepler. Please go ahead. First of all, regarding TT4050, what could be the key findings of the ongoing Phase I? And how will you pull all the data as this treatment is an individualized treatment? And regarding immunogenicity, that could be very important inter individual variation. Beyond that, I have two financial questions. First, could you give us the share of the manufacturing activities in your R and D expenses? And the last one, what do you expect in terms of cash burn for 2021? Thanks a lot. Do you want me to comment on the immunogenicity analysis? Yes. Yes. So at 54, the idea is to analyze very broadly the unit cell induction. And you're right, that will be for every single patient. The good point is that for each patient, we will have a ranking of the highly immunogenicity peptide and those who are less immunogenicity in our collection. And it will be important that we compare the ability of the vaccine to also induce T cells for more direct to weak immunogenic peptide. So that will be a key result that will be collected from each single patient. In terms of in terms of dual comparison, of course, you're right that will be difficult to compare. But the number of it would be maybe a key for profit differentiation and to give a specific number, but we hope to be able to demonstrate in every patient that whatever the initial T cell ratio at the beginning, we can increase the most significant T cell clones. Okay. In fact, the main point will be the increase of the T cell response. Absolutely right, yes. And the onset of specific T cell clones, even if possible for weaker antigens. Okay. And did you do you have any threshold? No, of course, considering the way they were selected, we are as I said before, we are on an AI based selection process. So it's more it's not the ranking, but more selection by AI of the most potent antigens. But we have some parallel data allowing us to rank them as high, moderate or weak exogenous. So we have no clue. And regarding your financial question, so first, on the expected cash burn, so for 2021, we expect to have an operational cash burn, meaning excluding the private assessment and the sale of Tati shares, the proportion of cash burn should be around €30,000,000 for 2021 with around €40,000,000 of expenses and around €10,000,000 of revenue. Regarding the parts of the manufacturing activities, we can consider that it represents around €10,000,000 per year regarding the staff and all the costs linked to the manufacturing activities and also the external costs linked to the process development and the external manufacturing. So this is both for Indario with several lots and third batches and all Maybach manufacturing. Okay. Thank you. There are currently no questions in the queue. And the next question comes from the line of Dominic Rose from Intron Health. Please go ahead. Hi, this is Dominic from Intron Health. Sorry about that. I thought I registered my question, but apparently not. I've got 3, if that's all right. Question 1 was, it would be great if we could have a bit more of an update on where you stand with your collaboration with AstraZeneca. I know there were 5 targets originally, and I think they've transferred too. So what are your thoughts about the other three targets? And what kind of what are the payments would you expect if they transfers more? And question 2 is on the Tuscaloosa share sale. I was a little bit surprised by that, but I thought there was a 1 year lockup. I assume this figure is guaranteed. And when would you expect to receive the cash from that? And finally, on question 3, you've obviously got a lot of readouts over the next 18 months. Just wondering which one you were most excited about? I'm sorry, Dominik. We didn't understand or hear. I will take your second question very well. Can you just repeat it, please? Yes, of course. Can you hear me? Yes. Yes. Question 2 was on the Townsville share sale. I just wanted to confirm that the €17,000,000 is a sort of guaranteed figure. As I was under the impression, there was a 1 year lockup and you wouldn't be able to monetize them until late next year. Sure. So Eric can start with AstraZeneca, if that's okay. Then, Sophie will comment on the payment related to AstraZeneca and to AstraZeneca and then the Tafin and then I will finish with the readouts. So regarding the collaboration with AstraZeneca, you might remember that we had this program involving up to 5 products to be designed with them. So everything has been going well and we are working in line with the plan in fact. And we are currently working on the last two construct that were defined in the 1st 3 years. They are advanced product. They are analyzing on their side, the contract plan that the product would be transferred after preclinical and in vitro characterization to their premises. They are carrying out the final analysis preclinical studies. And for the first product delivered almost 1 year ago, they now have to organize the decision. We are discussing heavily with them on where they stand now and it's a possibility that they could decide for the 1st option to be exercised by the end of this year or around the end of this year. So it's been going well on that side. So that's what I can say. Regarding the finance, I don't think that we already reported an amount planned for the option, but I will leave the floor to Eddy for those numbers. So on the so we have not communicated on the financial terms beyond the €10,000,000 that we've received from AstraZeneca 2 years ago. So I think the priority is really I mean, we hope that AstraZeneca will appreciate the product we are delivering to them, and they will move into clinic. And that will really be a great confirmation on the interest and the value of our technology. There would be a payment if they go with one product into clinic. It will not be a transformative sum to transient. It would not impact significantly our cash vision. So I think it's really more about technology than short term money. About Tasi, I will let Jean Philippe talk about that. Yes, thanks. So after this $20,000,000 sale of partial shares of that clean, we still have 8,700,000 shares of this Chinese company and those shares are valued approximately at the $20,000,000 So as you probably remember, we had to respect a 12 month lockup after the IPO of Statvii before being able to sell the remaining shares. So we think we think a window of opportunity today to sell those shares because taxi is about to resubmit its IPO filing. So it was just an opportunistic operation. But for the remaining shares, we will have to wait 12 months after the IPO before being able to sell the shares. Okay. That's happened the end of 2023. I mean, I think we've demonstrated last year and we confirmed last year that we find solution to monetize this asset. So we are not worried about the future. So let me talk about the readout. I think in the first part of this year, this H1 was really mainly driven by the initiation or acceleration of the clinical trials, which is 1, 4,050, 4,001 and so on. We had very interesting data on CG002. I think it's the value is not yet fully understood by everybody, once again, the first part was really more about launching clinical trials. The coming 18 months would be much more driven by readouts. So I think it's even more exciting for us and for you and for patients. The one in Q4, please remember the date, second half of November. I know you asked questions about what we would say at that point on PG-four thousand and fifty. I mean, we you'll see then what we can communicate. I'm really excited by that. Even if we talk about handful of patients, we are in monotherapy, we are early in the chain of treatment. So we have, I think, all the tools to have the test readouts. And Eric has explained part of everything we are doing to assess the depth of the immune response. We will not give one figure about the immune response, but we give many because we have to check every antigen what's happening, which will enable us to learn and we think confirm the interest of the artificial intelligence tool. So I think TG-four thousand and fifty even it's Phase 1, safety is important. We are not worried and we need to confirm, but more importantly, the new genicity will be key. BTZ earlier 1, it's really the start of 1 video platform. I would say it's a more classical Phase 1 data. So very important for the product, preparing the Phase 1b with the combination with the immune checkpoint, we said it's more classical, but paving the way for the line of product. The NTG-four thousand and one around the end of 2022, it's our most advanced product. And if we are in the target zone, I think it will really make us see whether the future of the project of the product, sorry, and how to finish Phase 2 and even beyond. So it's it will really even, I mean, strengthen that product. But here, we really look at pure data. I mean, we talked about PFS, but and Moura has explained the complexity. It's more about designing the rest of the trial, but still we look at really clear data such as PFS. So 3 and we have TG-six thousand and two. The TG-six thousand and two, we share data at AACR, then SMO. Now it should be more about confirmation. And then we are Maud is working very hard with the team, with the KOL to design the Phase 2. So here, readouts, really confirmation. We have reached the highest dose. We've already communicated a few patients at the highest dose, so really confirmation. But globally, very different readouts, very exciting, I would say, maybe more TG-four thousand and fifty and the 4,001, if you actually need to choose, because you only want more classical Phase 1 data, to further confirmations. Okay, great. Thanks. That was very helpful. It has clearly a lot to look forward to. Thank you. There are currently no questions in the queue. All right. So if no other questions, please let me conclude. So thanks a lot for your very stimulating question. Thank you for your time, for listening to us. I believe that with our very attractive proprietary clinical and preclinical product portfolio, Chongqing is ideally positioned to deliver multiple milestones in the coming 18 months and this is a key innovator in immuno oncology. We are confident that by successfully delivering our program and our strategy, we'll be able to generate significant value and improve our churn to patients. So thanks again for your time and for your questions. So I would like to conclude today's call. Thank you, and have a good evening.