Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining Heidelberg Pharma's Conference Call to discuss 2022 fiscal year results and provide a business update. During today's presentation, all participants will be in listen-only mode. Please note that today's call is being recorded. The presentation will be followed by a Q&A session where you may ask written or audio questions. Please note that you can ask questions only online. I would now like to turn the call over to Dr. Jan Schmidt-Brand , CEO and CFO. Please go ahead, Jan.
Good afternoon, ladies and gentlemen, and welcome to the Heidelberg Pharma Conference Call to discuss our 2022 fiscal year results and provide a business update. My name is Jan Schmidt-Brand , and I am CEO and CFO of the company. Joining me on this call is my colleague, Professor Andreas Pahl, Chief Scientific Officer, and Katja Arnold, our investor relations off-consultant. Please note that this presentation is available for download on the Heidelberg Pharma website. This conference call is being recorded and the replay will be available on our website after the live event. Before I begin, let me remind you that we will be making forward-looking statements on this call as well as during the question and answer session. Please see our safe harbor statement here on slide two.
For a more detailed discussion of the risks and uncertainties affecting our business, please see the 2022 management report published last Friday on our website. On the call today, we will give you a brief corporate overview and outline key achievements. We will also provide an update on our proprietary ATAC programs as well as our partnered projects. This will be followed by a review of our financials and an outlook for the year ahead. Following our prepared remarks, we will have a Q&A session afterwards. Slide four provides a quick overview of our company. We are the first company to deploy a completely new mode of action in cancer treatment by using the toxin amanitin to develop anti-cancer therapies. Amanitin is a natural toxin found in the death cap mushroom and has a unique biological mode of action.
The inhibition of RNA polymerase II, which could serve as the basis for developing highly effective innovative drugs. We use our proprietary and innovative technology to manufacture antibody-targeted amanitin conjugates or ATACs. With our novel proprietary technology, we seek to provide cancer patients new treatment options that improve efficacy, overcome resistance mechanisms and kill both proliferating and dormant tumor cells. Our lead program, HDP-101, is in clinical testing, and we have several programs in early stages of development. More on our programs later in the presentation. At the end of 2022, we had 110 employees, nearly 15% increase over last year. As our programs advance, it is critical that we have the expertise we need to move them forward in development and to find appropriate partners. Based on our current planning, we have sufficient cash to fund our operations and activities until mid-2025.
Turning to slide five. This slide provides you with an overview of our pipeline, including our proprietary portfolio of candidates, our partnered programs, and our legacy assets. We will provide an update on these programs and the progress made later in today's presentation. I do want to take a minute to discuss our partner, Magenta. After having started the clinical development with its ATAC candidate, MGTA-117, in 2022, Magenta presented encouraging clinical data from two patient cohorts from its study for the targeted pre-preparation or conditioning of patients for stem cell transplants, cell or gene therapy in the ASH annual meeting this past December. The MGTA-117 data showed proof of mechanism, a favorable tolerability profile, and the reaching of an active dose. Not long afterwards, Magenta reported that severe preliminary side effects had occurred in cohort four.
In January, they reported that a participant dosed at the cohort three level had experienced a grade five serious adverse event, resulting in death and possibly related to MGTA-117. Although the FDA did not require a stop, Magenta decided to immediately pause the dosing of the clinical trial. Subsequently, to our surprise, they announced at the beginning of February that all ongoing programs, including MGTA-117, had been halted and that the company would conduct a comprehensive review of strategic alternatives. By the end of February 2023, Magenta filed with the SEC that the company had cut its workforce by 84%. They also informed us that they were terminating the amanitin linkage supply agreement with us, which will lead to a loss of revenue-In the low single digit million range in 2023.
Further consequences of the contract situation depend on the course of Magenta's strategic realignment and cannot be estimated at present. We assume that our partnership with Magenta will not be continued. We take the findings of Magenta's clinical trial very seriously and are conducting a detailed analysis of how these could affect Heidelberg Pharma. Having said that, we do not believe there is any carryover regarding the safety of our proprietary programs. We will provide you more information a bit later. Coming back to 2022 on the next slide, on a more positive note, we did have an exciting partnering news. We were pleased to announce a major strategic partnership during 2022, as well as a new ATAC partner and progress with our work at Takeda.
In February of last year, Heidelberg Pharma entered into a strategic partnership with Huadong Medicine, with the signing of an exclusive licensing agreement as well as an investment agreement. Under the terms of the licensing agreement, Heidelberg Pharma granted Huadong exclusive development and commercialization rights for HDP-101 and HDP-103 for select countries in Asia, but excluding Japan, India, Pakistan, and Sri Lanka. For these two programs together, we received an upfront payment of $20 million and are eligible to receive milestone payments of up to $449 million. We also granted Huadong an exclusive option for two other preclinical candidates, HDP-102 and HDP-104 for the same territories. Upon exercise of the option, we would receive an undisclosed option exercise fee and would also be eligible for milestone payments.
In total, we would be eligible to receive up to $461 million. In addition, we are eligible to receive tiered royalties ranging from single digit to low double digit for all four candidates. Huadong also has the right of first negotiation to license our next two ATAC candidates for that territory. After gaining all the approvals from the authorities, subject to certain closing conditions, such as the foreign trade clearance, Huadong's exemption from the obligation to make a mandatory offer by the Federal Financial Supervisory Authority, BaFin, as well as foreign direct investment approval required under Chinese law, we initiated a rights offering to implement the investment agreement. Huadong invested EUR 105 million into our company. I will come to that later in the discussion of the financials.
Huadong was also granted two seats on our supervisory board. The AGM 2022 already approved the election. The deal in dollar terms was nearly $1 billion, the near-term funding we received has put us on a strong financial footing. Importantly, I mean, we gained another valuable and reliable long-term investor who fully supports our strategy to become a global ADC player. Huadong's strong development and commercialization expertise and knowledge of Asia, we believe, will both shorten the time to market and maximize the commercials opportunity for our ATAC products in this important territory. Turning now to our ATAC collaboration technology collaborations. As a reminder, in addition to our proprietary ATAC programs, we also have ATAC technology collaborations under which we grant a license to our ATAC technology to be applied to our partners' antibodies.
For each target, partners have the right to exercise an option for global development and commercialization rights. The agreements generally include upfront payments, reimbursement of preclinical development costs, milestone payments, and royalties. In July 2022, we announced the signing of an exclusive target-specific research and option agreement with Chiome Bioscience, a clinical stage biotech based and listed in Tokyo. Under the collaboration, one of Chiome's monoclonal antibodies is being combined against one specific target with our ATAC platform. Chiome has been granted access to our platform technology and has an option for an exclusive, target-specific, target-specific license for global development and commercialization rights to the product candidate resulting from the research collaboration. Heidelberg Pharma is eligible to receive an option fee, development, and sales related milestone payments, up to EUR 105 million , as well as tiered royalties in the mid to upper single digit range.
Our long-standing partner, Takeda, who obtained access to our technology under an exclusive multi-target research agreement effective in June 2017, provided different antibodies to Heidelberg Pharma to generate new ATACs. In September 2022, as an outcome of this work, we signed an agreement granting Takeda an exclusive license to develop an ATAC directed to a previously selected target molecule. Takeda is responsible for further preclinical and clinical development, as well as potential commercialization. We are delighted that this collaboration has progressed so positively. Please turn to slide seven for some highlights from our proprietary development programs. We were excited in February 2022 to enter our lead program, HDP-101, into clinical testing. In ASH in December, we presented first preliminary safety data from the ongoing phase I/IIa trial in multiple myeloma. The data presented, which were from the first two patient cohorts, showed good tolerability.
Andreas will discuss the trial and our development plans in a bit more detail later this presentation. Let me just briefly remind you here about our next portfolio candidates, HDP-102 and HDP-103, which progressed in 2022 as planned. For both ATAC s, we completed production of the antibody material for toxicity testing, as well as production of the toxin linker in both non-GMP and GMP quality for our GMP toxicity and planned phase I studies respectively. We have also conducted further toxicity and other preclinical studies. HDP-104 is our newest proprietary ATAC , which we introduced last fall. Here we are using an antibody that targets Guanylyl cyclase C or GCC, a surface protein that is overexpressed in a variety of gastrointestinal cancers. Like HDP-103, this is an ATAC addressing solid tumors.
At the American Association for Cancer Research, AACR 2022 annual meeting in April, Heidelberg Pharma presented preclinical data on the synergy of using ATAC s together with immune checkpoint inhibitors, as well as data in preclinical models indicating that repeated treatment with ATAC s results in better tolerability without compromising efficacy. Please turn to slide eight for an update on our legacy assets. Turning now to the out licensed clinical legacy assets. In November 2022, our licensee, Telix, reports positive top-line data with imaging agent TLX250-CDx in its pivotal phase III ZIRCON trial. As a reminder, TLX250-CDx is a radiolabeled form of the antibody Girentuximab, which binds to the tumor-specific antigen CA9 on clear cell renal cell carcinoma. Accumulation of this antibody in the tumor tissue can be seen using PET scans.
The global multicenter trial evaluated TLX250-CDx for the diagnosis of kidney cancer in 300 patients compared to the current standard diagnostic method, histology of tissue obtained by surgery. All study endpoints were met, and the data showed 86% sensitivity and 87% specificity, exceeding the predefined threshold for reliable detection of the clear cell phenotype. The study also met the key secondary endpoint, achieving 85% sensitivity and 89% specificity in detecting ccRCC in tumors smaller than 4 centimeters, the so-called “T1a” classification. Currently, a significant clinical challenge in the diagnosis of this clear cell renal cell carcinoma. This diagnostic has the potential to fundamentally change treatment planning for renal cancer patients and may enable the avoidance of unnecessary surgery.
Telix plans to submit applications for marketing approvals as a diagnostic in clear cell cancer, as a renal cancer and to the U.S. FDA and other regulatory authorities worldwide. Should all go as planned, Telix has indicated they hope to launch the diagnostic in 2024, beginning in the U.S.. Heidelberg Pharma is eligible to receive milestone payments and royalties. In addition to the unique indication, Telix also has ongoing phase I and II clinical trials in bladder cancer and triple-negative breast cancer. Let me now ask Andreas to provide some more details on our proprietary ATAC programs. Andreas, please go ahead.
Thank you, Jan. Hello, everyone. Let me start with HDP-101, our lead ATAC candidate, which, as Jan said, entered clinical testing for the treatment of multiple myeloma a little over a year ago. I will talk a bit more about the trial design in a minute. Multiple myeloma is a type of bone marrow cancer that claims about 70,000 lives each year. Proliferation of a single plasma cell clone is responsible for this incurable cancer. Expression of the cell surface protein BCMA is strongly associated with multiple myeloma. HDP-101 is an ATAC directed against BCMA. In preclinical testing, HDP-101 showed a targeted elimination of BCMA-expressing cells, as well as a good safety profile.
Laboratory research by a team at MD Anderson demonstrated that HDP-101 might be particularly effective at attacking tumor cells from multiple myeloma patients with a 17p deletion. This deletion is associated with a much poorer prognosis and thus represents a high medical need for more effective therapies. This information supports the potential to use this chromosomal deletion as a biomarker for patient stratification, and we are planning to evaluate this option in the phase IIa part of our ongoing clinical trial, which we started in February 2022 with the first patient dosed. Please turn to slide 11. Coming now to the design of our phase I/IIa clinical trial with HDP-101. The study is an open label, non-randomized, multicenter phase I/IIa trial evaluating HDP-101 in patients with relapsed and refractory multiple myeloma.
The phase I dose escalation part of the study is to determine an optimal and safe dose of HDP-101 for the phase IIa part of the study. It is planned to treat up to 36 patients who will receive HDP-101 intravenously every 3 weeks until disease progression, discontinuation at investigator's discretion or patient withdrawal. During this part of the trial, tolerability of different dose levels will be evaluated, and the potential biomarker will be evaluated retrospectively. During the phase IIa dose expansion part, the recommended dose of HDP-101 will then be administered to at least 30 patients. We will include BCMA-naïve patients, where patients in this part will be stratified based on their 17p deletion status. Currently, we do not intend to include patients already treated with approved BCMA-directed therapeutics, such as Blenrep.
The reason is that this BCMA ADC from GSK missed the primary endpoint in a phase III confirmatory trial. The FDA subsequently withdrew market authorization for the drug in November 2022 because the conditions for accelerated approval were not met any longer. GSK pulled Blenrep from the U.S. market. The primary objective of the phase IIa part of the trial is to assess preliminary antitumor activity of HDP-101, along with further evaluation of the safety of the drug. Currently, we have six active clinical sites in the U.S. and Europe. You see them listed at the bottom of the slide, and we are in the process of bringing additional sites on board in Europe. Sites in Poland and Hungary are being initiated. So far, we have completed three patient cohorts of the phase I part at dose levels of 20 mg/kg , 30 mg/kg , and 60 mg/kg .
In total, eight patients have been treated. As Jan mentioned, we presented positive safety data for the first two cohorts at the ASH meeting in December last year. Those limiting toxicities were not detected in these early cohorts. We have not yet seen efficacy as this is too early. Patient safety is a top priority for Heidelberg Pharma. Following completion of the third dose level in March, a data review was conducted by the Safety Review Committee. The SRC concluded that the treatment is safe and well-tolerated in these 3 cohorts and recommended to escalate to the new next dose. It was determined that there was no evidence that the safety issues with MGTA-117 were related to all immunoglobulin carrying ADCs in general, and most likely the issues were in connection with the selected target of the CD117.
To be abundantly careful, we decided as an extra precaution to implement further safety measures for our patients, especially regarding the identification and exclusion of those patients who might be prone to develop respiratory events. Additional examination will also be included to detect any similar events early on. These additional measures will be included in the study protocol and implemented with the fourth cohort at the trial sites. We expect that these additional precautionary measures will take at least three months to implement before the fourth patient cohort will then be able to be treated with an increased dose as planned. Under the current planning, we expect full enrollment in the trial not before early 2024 and consequently to initiate the phase IIa part of the ongoing trial in mid-2024. Please turn to slide 12. Let me now briefly discuss our next two product candidates.
Jan already reported on the manufacturing and preclinical development steps. HDP-102 is an ATAC targeting CD37, which is overexpressed in B-cell lymphomas. Given this, we plan to develop HDP-102 for specific indications of non-Hodgkin lymphoma. There's a high prevalence of 17p deletion in this disease, and so it is another indication where it will make sense to use our biomarker to determine the patients most likely to benefit from treatment with HDP-102. Preclinical data have shown that the CD37 ATACs demonstrated strong antitumor activity and inhibited the growth of hematological tumors even at low concentrations in addition to good tolerability. Furthermore, the high efficacy of anti-CD37 ATACs in patient-derived Richter syndrome xenograft models were also published in Blood together with a research group from the University of Turin.
HDP-102 has a promising therapeutic window, and these data are supportive for the potential of HDP-102 to treat non-Hodgkin lymphoma. Another ATAC candidate we are bringing forward into the development is HDP-103, an anti-PSMA ATAC for the treatment of metastatic castration-resistant prostate cancer. prostate-specific membrane antigen, PSMA, is a surface protein that specifically appears on prostate cells and is overexpressed in prostate cancer, while expressed in only a limited way in normal tissue. This makes it an attractive target for an ADC approach. Advanced prostate cancer is another area where there is a high prevalence of around 60% of the 17p deletion, and so another good indication to apply our biomarker. In vitro and in vivo efficacy, tolerability, and pharmacokinetic studies have shown that HDP-103 has a promising therapeutic window. We are planning to submit IND applications for both candidates next year.
We introduced a new ATAC candidate, HDP-104. For the target, the antibody is Guanylyl cyclase C, GCC, a transmembrane receptor protein for regulation of intestinal electrolyte homeostasis. In healthy tissue, GCC is restricted to the lumen of the intestine, where it is not accessible to antibodies or ADCs circulating in the bloodstream. High GCC expression can be found on more than 95% of colorectal cancer and approximately 65% of esophageal, gastric, and pancreatic tumors. In advanced GI tumors growing through the wall of the intestine, GCC can then be reached by intravenously administered and circulating antibodies or ADCs. This way, we aim to specifically eliminate these cancer cells with our new ATAC candidate. We are currently preparing HDP-104 for preclinical development.
We will prioritize validation of the ATAC platform through HDP-101 and HDP-102 in hematological tumors to be complemented by the solid tumor treatment, HDP-103. With HDP-104, we plan to start further development in 2024. With that update, let me now turn the call back to Jan.
Well, we are now coming on slide 14 to the fiscal year financial results. Thank you, Andreas. Let's start with our profit and loss statement for the year 2022. As a reminder, our fiscal year ends on November 13th. The slide shows our guidance as of October 2022. We have updated our earlier guidance from March 2022 as the license agreement with Huadong and the corresponding license payment significantly increased our sales revenue for the year. Development expenses increased compared to 2021 but remained below plan due to the later production of some steps on the follow-on candidates. Both factors impacted operating results, which were expected and did improve, substantially reducing our funding requirements for 2022. Looking at sales revenue and other income.
For fiscal year 2022, sales revenue and other income totaled EUR 19.9 million compared to EUR 2.3 million for the prior year. This sharp increase was mainly due to higher sales revenue from the strategic partnership with Huadong. Total sales revenue of EUR 18.5 million comprised revenue from collaboration agreements for the ATAC technology of EUR 17.5 million, including EUR 8.5 million from Huadong, as well as revenue of EUR 0.5 million from our service business and one milestone payment of EUR 0.5 million from an earlier out-licensing agreement. Turning to operating expenses. Operating expenses, including depreciation and amortization, increased to EUR 37 million in 2022 compared with EUR 27.9 million in the previous year, mainly because of the research and development costs increased in line with planning.
Cost of sales relates to costs directly related to sales revenue. These costs mainly related to expenses for customer-specific research and for the supply of our 18 linker material to licensing partners. As in the previous year, they amounted to EUR 4.7 million, representing 13% of operating expenses. Research and development costs rose considerably year-over-year to EUR 26.4 million compared to EUR 18.7 million for 2021 due to the cost-intensive external manufacturing for ADCs projects and the ongoing clinical trials with HDP-101. The production of antibodies for HDP-102 and HDP-103 was also a factor. At 71% of operating expenses, R&D remains the largest expense. Administrative costs were EUR 4.1 million compared to EUR 4 million in 2021 and accounted for 13% of operating expenses.
This included staff costs of EUR 2.6 million compared to EUR 2.3 million for 2021. The increase results from growing number of employees due to the expansion of business activities. Administrative costs also included legal and operating consulting costs, as well as expenses related to the annual general meeting, supervisory board, and the stock market listing. Other expenses for business development, marketing and commercial market supply activities, which mainly comprise staff and travel costs, were EUR 1.1 million compared to EUR 0.5 million in 2021 and represented 3% of operating expenses. Please turn to slide 16. Turning to our financings and the balance sheet. Despite the challenging market environment, we were quite successful with our financing activities in 2022. Already in December 2020, dievini confirmed the financing commitment of up to EUR 50 million.
The last tranche of EUR 5 million was drawn down in February 2022, prior to the announcement of our agreement with Huadong. As I mentioned earlier in the presentation, Huadong invested EUR 105 million in Heidelberg Pharma. We implemented a rights offering and received gross proceeds of EUR 80 million in the third quarter, in which the bulk of the proceeds came from Huadong, becoming a 25% shareholder. We issued 12.4 million new shares at the price of EUR 6.44 per share. Per the investment agreement, Huadong sought to have an ownership level of 35%. To achieve this, Huadong acquired additional shares as planned from our largest shareholder, dievini, at the same price as the rights offering. Let me just point out a few highlights from our balance sheet.
At November 30, 2022, Heidelberg Pharma had cash and cash equivalents totaling EUR 81.3 million. Looking at current liabilities, current liabilities rose to EUR 28 million at the close of the reporting period, compared to EUR 14.9 billion for the prior year. This included current contract liabilities of EUR 5 million compared to EUR 0.5 million in 2021, which related mainly to deferred income caused by the revenue recognition of the Huadong upfront payment shown as current contract liabilities. In addition, current liabilities included the increase of the dievini loan up to EUR 15.8 million. Trade payables were EUR 3.1 million compared to the previous year, EUR 4.9 million. Other current financial liabilities were EUR 4 million for 2022, compared to EUR 3 million in 2021. These figures increased versus 2021 as a result of expanded business activities.
Equity was EUR 66.6 million at November 30, 2022, compared to EUR 6.7 million at the end of the prior year. The equity ratio was 66.3% compared to 30.8% at the end of 2021. Let me wrap up with a look on what to expect in the year ahead on slide 17. Looking at our proprietary pipeline, dose escalation is ongoing in the phase I part of our phase I/IIa trial with HDP-101 in multiple myeloma. Additional clinical sites in Poland and Hungary have been initiated. They will start with patient enrollment after the implementation of additional precautionary safety measures as introduced. This includes a protocol amendment and approval by regulatory authorities, as well as implementation at the trial sites.
The next dose level of this is expected in three months at the earliest. We look forward to seeing initial efficacy results from the study later this year. We expect to complete the phase I part in early 2024 with a dose to bring forward the phase IIa. The start of the phase II part is planned for 2024. In the additional precautionary safety measures in our ongoing phase I trial, as well as the difficult capital market environment, will lead to a slight deprioritization of our early pipeline assets. Preclinical and tox studies with HDP-102 and HDP-103 are ongoing, and we now expect to be able to file INDs for these product candidates in 2024. Preclinical work with our newest product candidate, HDP-104, is focused on generating additional IP.
This brings me to our financial guidance for 2023 on the next page. We expect sales revenue and other income to be between EUR 7 million - EUR 10 million in fiscal year 2023. We expect about half of the sales revenue to be related to partnerships with the ATAC technology, and half of it to come from deferred income and potential milestone payments to Heidelberg Pharma AG. The main reason for the decrease compared to 2022 is the strong value effects of the Huadong partnership. Please note that at the end of February 2023, Magenta terminated the R&D linkers supply agreement which will lead to lost revenue for us in the low single-digit million range in 2023. Further consequences of the contract situation depend on the course of Magenta's strategic realignment and cannot be estimated at present.
We assume that our partnership with Magenta will not be continued. Other income will mainly comprise government grants and the passing of patent costs related to the out-licensed drugs. Operating expenses are expected to be in the range of EUR 37 million-EUR 41 million , higher than in the reported year, due to the continued development of our pipeline. Earnings before interest and taxes for 2023 are expected to be between - EUR 28.5 million and - EUR 32.5 million . The results of operations for the next few years will generally depend to a large extent on whether we'll be able to enter into additional agreements for ATAC partnerships and license agreements with pharmaceutical partners. Heidelberg Pharma assumes that over the next few years, expenses will exceed income, which is typical for biotech company at this stage.
Based on our current expectations, financing requirements for fiscal year 2023 are expected to increase compared to 2022. Cash burn is expected to be between EUR 32 million - EUR 36 million, which corresponds to an average monthly use of EUR 2.7 million - EUR 3.1 million. This planning takes into account potential cash inflows from license activities in the context of the ATAC technology at Heidelberg Pharma Research. Based on the deprioritization of our early assets and current planning, Heidelberg Pharma expects to have sufficient funding to conduct its business until mid-2025. Let's come to the investment summary. We are excited about what the future holds for us, and we are driven by our vision of developing new options to address major challenges in cancer therapy. We have potentially disruptive technology, and our excitement for our work is validated by our partnerships.
The transformational deal with Huadong is supporting our strategy to become an important global ADC player. We believe we are well positioned to reach our goals and to bring new hope to patients. That concludes the formal part of our presentation, and we would like to open the call to questions.
Ladies and gentlemen, at this time, we will begin the Q&A session. You may ask a question using the raise hand icon below the presentation window. We will call on each person and ask you to unmute yourself. You can also ask questions in writing via the Q&A button below the presentation window. I will then read the questions aloud. One moment for the first question, please. The first question is from the line of Marietta with Pareto Securities. Please accept the request to unmute. Your line is now open. Please ask your question.
Yes, thank you very much. I have a couple questions, please. One is a financial question. How should we think about revenues and cash use beyond 2023? Should we expect revenues to grow mainly as a function of Telix and cash use to go down modestly as a result, or are there any other moving parts that we should be aware of? The second question relates to news flow. I was just wondering if you could please be a little bit more specific in terms of when and how we should expect updates on HDP-101, in terms of, you know, the next safety data in three months' time, and would you communicate that by press release? Do you have a particular congress in mind? Would you expect first efficacy data at ASH?
Also is there any news flow to look forward to this year from your earlier stage assets, and/or any collaboration assets? Thank you.
Well, thank you, Marietta. First, let's go to the financial question. Well, as always, our turnover planning is quite, let's say conservative. We are looking into existing collaborations and what we expect from those. We have not yet included Telix. Telix is preparing the delay this year. They want to approve or to apply for approval for their new drug in the course of the year and expect approval next year. No turnover anticipated from Telix this year. With regard to the news flow and 101, maybe Andreas, do you want to comment on the course of the actions with 101?
Yes, of course. Maybe for clarification, I'm not sure whether you got it right. The additional safety measures needs to be implemented so that it will take at least three months until we can continue for the phase I trial. There will be no major update, let's say, till the mid of the year. Of course we will, let's say, go for the next cohorts. The plan of today is that we, like last year, we submit an abstract to ASH because that's a major conference in the field. You should look forward to an ASH presentation about the major update about the 101 trial. Since for the other programs we are, let's say, in the preclinical development, they're usually, we don't publish any news.
We will publish the next year if we go for the clinical trial, application for these programs.
So, 101 is certainly the key, this year and very important to validate our technology.
Can I just quickly follow up? Would we expect initial efficacy data at ASH, or would you expect to have initial efficacy data in-house later this year and then sometime next year we would actually see the initial efficacy data?
This is always a little bit, let's say, looking in the glass ball. We are running a phase I trial. Our expectation is that with the next two cohorts, we see efficacy. Of course, we cannot guarantee this one. Of course, we are keen as soon as we have efficacy data, with a good profile, we will publish this, let's say very likely. Hopefully it will be available at ASH. Again, we will, let's say, keep you updated with exciting news from the trial as it occurs.
Thank you. Jan, if I can just quickly follow up on the financial question. I was really just mainly trying to look out beyond 2023 because your cash reach guidance of mid-2025 seems to imply that fund use is going to be lower in sort of 2024 and first half of 2025 than it is in 2023. I was just wondering, is that mainly driven by an expectation of higher revenues with relatively stable cost? You know, for our own modeling, I mean, how should we approach 2024 and 2025?
Yeah. In the longer run, of course, Telix will kick in and further collaborations will kick in with further milestones. As we are right now focusing on the, let's say, key portfolio to validate our technology, there is currently also a lower use of cash for creating new material, so we are quite well established with that or equipped with that. For the time being, we don't expect further cost increases in the following years.
Thank you.
Thank you. The next question is from the line of Olga Smolentseva with Bryan, Garnier . Please accept the request to unmute.
Good afternoon, thank you for taking my question. I have one on HDP-101 as well. Just regarding the precautionary measure, to exclude patients with pulmonary complications, what would be the profile of such patients? Basically meaning that there are, for instance, rare pulmonary parenchyma or interstitial lung diseases, but also another thing is lung infections. Maybe a little bit of a clarity on what type of lung involvement you would be excluding.
Of course, it's driven by the Magenta event. We don't have any belief that this is an issue for our platform. We haven't seen anything in our patient, but we all agree together with the investigators that we should take these measures just to be on the safe side and to take every precaution for the patients. We are doing scans. We are looking into the details of these scans. The protocol is currently be finalized to that end and aligned with the investigators. Also we look in, let's say, in prior history of infections, but I can't give you details about what parameters in the scans we are looking at for exclusion of the patients.
Okay. Thank you.
There's also this aspect of having a baseline, so just to see where the patient comes from.
Got it. Got it. Thank you. Maybe also in the context of recruitment of BCMA-naïve patients, how are you thinking about approved bispecifics and CAR-T therapies?
Yeah. We were discussing this. Again, we would like to make our life easier. However, we believe that we can also, let's say, work on sequential BCMA-directed therapies, but to have a much cleaner cohort for the expansion trial. We look into this one. The withdrawal of the Blenrep makes, let's say, the competitive landscape much more favorable for us. We can be first in class for an ADC. We also let you notice probably that we are also going for Eastern Europe, where these drugs are not approved. That's our way forward to go to these kinds of patients.
Got it. Thank you. Maybe, just a last one for me, please. If you could share any color on the program in licensed by Takeda and maybe next potential milestone payment that might be associated with it.
Jan, that's a lawyer.
Well, of course, we cannot comment on the targets. They are not disclosed.
Yeah.
Well, the only thing I can say, there's a high interest from our partner. We have a very intensive collaboration and, we expect, let's say, that the program is progressing as fast as a very professional organization can do that. We don't know yet to which extent we might be able to communicate on progress. This has to be done when we cross the bridge when we come to it.
Thank you.
Thank you. The next question is a written question from Thomas Schisler with Equitable Advisors. He's asking: What makes you confident that the severe side effects at Magenta's CD117 will not affect your own projects?
Yes. Thank you, Thomas, for that question. Of course, we had a long discussion in our company with the investigators of the study with external consultants. There are a lot of arguments supporting this. First, we have treated so many non-human primates with different antibodies targets. We have never observed any lung toxicology along with any of these programs. For human mushroom intoxication, again, lung has never been described as any side effect of the mushroom intoxication. If you look a little bit more into the, let's say, expression profile of the CD117 target, you will notice that you have expression on the MES cells, hematopoietic stem cells are present in the lung, and furthermore, the AML patients are prone to lung adverse effects. This altogether makes us highly confidential.
Of course, drug development, you never can be 100% sure, but let's call it 98% or 99% confident that this will not show up in our own projects.
Thank you. A follow-up question from Thomas: Will CD45 A-type project be stopped as well? What will be the consequence on the balance sheet or the write-down?
Yeah. Maybe for the first. The project will be stopped because Magenta terminated all, let's say, ATAC projects.
Yeah. We have not, let's say, any balanced position on that in our balance sheet, so we'll write down in the balance sheet.
Thank you. There are no further questions at this time. This concludes the Q&A session. I will now hand the call back to Jan for closing remarks.
Yeah. Thank you, Regina. Thanks to everybody for attending and hope to see you soon and to be able to give you more positive news on Heidelberg Pharma. Thank you.