Ladies and gentlemen, thank you for standing by. Welcome to the Medigene AG Half Year 2024 Earnings Call and Live Webcast. For our call operator, I would like to remind you that all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one . For operator assistance, please press star and zero. The conference must not be recorded for publication. At this time, it's my pleasure to hand over to Pamela Keck. Please go ahead.
Welcome, everyone, and thank you for joining us. With me today is Dr. Selwyn Ho, CEO of Medigene. Today, we announce financial results for the six months ended June 30, 2024. You can access the press release on the Investor Relations page on our website at medigene.com. Before we get started, let's quickly run through the forward-looking statements. Please note that as part of our discussion today, management will be making forward-looking statements. Although we believe our expectations are based on reasonable assumptions by their very nature, forward-looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements made on the call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward-looking statements.
With that, I'll hand the call over to Selwyn.
Thank you, Pamela. Good morning, afternoon, everyone, and thank you for joining Medigene's Half Year 2024 Earnings Call. I look forward to reflecting on our achievements from the past six months and our plans going forward. Over the past decades, research into the causes and treatment of cancer has contributed to major breakthroughs, with important reductions in patient mortality. However, despite these advancements, significant challenges remain, particularly for solid tumors, and new precision immunotherapies and treatment modalities are still needed to further improve survival and patient quality of life. At Medigene, our work starts with the patient in mind to deliver highly efficacious, safe, and durable therapies, and with a vision to unlock the immune system's potential to treat and cure cancer.
Our focus and expertise is in generating extraordinary T cell receptors, or TCRs for short, for use in multiple different modalities of first-in-class and best-in-class TCR-guided precision immunotherapies. The basis of these TCRs and TCR-guided therapies is our proprietary end-to-end platform. Before we discuss the first half of 2024 and the significant progress we have made, it would be remiss of me if I did not mention that this month marked a major milestone for the potential of TCR T-cell therapies, with the FDA approval of the very first TCR-T therapy for the treatment of a rare solid tumor. This approval is a huge step forward for the company involved, Adaptimmune, the entire immuno-oncology sector, and above all, for patients with solid tumors, and we congratulate all the researchers, physicians, healthcare specialists, and patients involved in making this happen.
This approval also clearly paves the way for further innovation with the next generation of TCR-T therapies, which will be designed for greater efficacy, safety, and further durability. For Medigene, with our lead TCR-T program, MDG1015, we now have a clear benchmark against which to measure ourselves, with the goal of developing the best possible therapeutic options for solid tumors. Overall, the first six months of 2024 was relatively stable for the biotech-focused capital markets, following the rally at the end of 2023. However, access to public capital in the equity markets remained very challenging, with a number of publicly listed biotech companies unable to fully finance their operations. However, at Medigene, with the successful completion of an oversubscribed capital raise, we've been able to focus on our core strategy and meet all our targets and commitments.
In terms of our end-to-end platform, we continually expanded this, and I'd like to highlight the addition of our UniTope and TrackR combination technology for high-precision TCR tracking. This technology uniquely tags the TCR and exactly tracks its location, allowing precise evaluation and localization of a TCR-guided cell therapy, whether studied in vitro or in patients, and provides insights into cell therapy efficacy, safety, and the mechanism of action. We've had several data presentations in the first half of 2024, and the totality of these presentations across MDG1015 and MDG2011 continue to demonstrate the three key solutions and resultant benefits that Medigene is providing that address the major challenges for optimizing TCRT therapy. Firstly, the importance of having an extraordinary, specific, sensitive, and safe, so-called 3S TCR-... as a starting material for any TCR T-cell or any TCR-guided therapy.
Secondly, overcoming the immunosuppressive tumor microenvironment, or TME, to ensure superior T-cell functionality and tumor cell killing, as well as a favorable safety profile of TCR T-cells through armoring and enhancing with our PD1-41BB costimulatory switch protein, or CSP. And thirdly, the importance of optimizing cell therapy drug product composition to enable short, efficient, 6-day production process, which leads to younger, fitter cells and results in very high proportions of T-cells with stem-like qualities, leading to longer cell durability and marked reductions in the overall vein-to-vein duration for patients to less than 3 weeks. Finally, with the advancement of our end-to-end platform, has been an expansion of our patent portfolio. As of June 30, 2024, the patent portfolio consisted of 97 issued patents and 124 pending patent applications.
In terms of our pipeline, we have advanced this in TCR T-cell therapies and expanded the use of our extraordinary TCRs into new TCR-guided treatments beyond TCR T-cell therapies, such as TCR-guided T-cell engagers, or TCR-TCEs for short, that could further complement our existing cell therapies and further address the unmet needs in treating solid tumors.
Our TCR T-cell therapies are advancing well, and our lead program, MDG1015, a third generation NY-ESO-1, LAGE-1A targeted T-cell receptor, combined with our PD1-41BB costimulatory switch protein, is near clinic and remains on track for submitting an investigational new drug, IND, application to the FDA in the third quarter of 2024, and a clinical trial application, or CTA, to the European Medicines Agency, or EMA, in the fourth quarter of this year, with a plan to enter the clinic at the end of 2024, subject to IND CTA approval and further financing. As an example of the progress made, work with our potential trial clinical investigators in the United States and the European Union, and the manufacture of our cell therapies is virtually complete.
Our lead KRAS program, MDG2011, a KRAS G12V specific T-cell receptor targeting HLA-A11, combined with our PD1-41BB costimulatory switch protein, has advanced to preclinical stage. We also announced the lead selection for our second KRAS program, MDG2021, a KRAS G12D specific TCR, again, targeting HLA-A11, in June of this year. Our recently announced partnership with WuXi Biologics for our new program, MDG3010, is an off-the-shelf TCR T-cell engager, or TCR-TCE, targeting solid tumors, and marks a real milestone for the company as the first of our TCR-guided therapies beyond TCR T-cell therapies, enabling us to potentially provide greater access to new treatment types that will benefit greater numbers of patients.
TCR T-cell therapies, which despite their benefits, are complex to optimize, difficult to manufacture, and require a lag time from a patient providing cells to a therapy being precision manufactured for them, of up to 6 weeks. In contrast, a TCR-TCE is a so-called off-the-shelf therapy, meaning it can be stored at the physician's office or pharmacy and awaited decision for immediate treatment without any lag time. Our existing partnerships with BioNTech and Regeneron have been progressing as well. More on that later. Finally, in terms of corporate updates, in 2024, including our oversubscribed successful capital raise with subscription rights in May, with gross proceeds of approximately EUR 5.9 million, this financing round was one of the first successful transactions of a publicly listed small cap biotech in Europe, and the only one in Germany in 2024 at that time.
This has enabled Medigene to extend our cash runway into July 2025 and advance our operations further. During our discussion with investors, we have continued to receive positive feedback on the advancement of our end-to-end platform and pipeline, as well as our updated corporate strategy into new TCR-guided modalities. The support from our existing shareholders, as well as new investors, validates our approach. Our end-to-end platform is dynamic and has also progressed and expanded in the first half of 2024. Our modular format has easily allowed us to incorporate new technologies and support the new TCR-TCE and TCR-guided modalities. Our TCR generation and optimization modules provide the unique proprietary differentiation that enables us to generate our extraordinary potential best-in-class 3S T-cell receptors.
These have unique and distinctive attributes that are utilized in multiple therapeutic modalities, such as TCR T-cells, TCR-guided T-cell engagers, and TCR natural killer cell therapies for both in-house product pipeline and for potential partnering. The platform includes multiple safety-focused technologies here in yellow, efficacy and enhancing technologies in pink, and development optimization technologies designed to make the development process more efficient, of higher quality, cheaper, and faster in light blue. From our end-to-end platform, we now have 3S TCRs built into our current pipeline of multiple modality TCR-guided therapies. Starting with MDG1015, our lead TCR T-cell program, this is targeting NY-ESO-1/LAGE-1A, and as stated earlier, following positive European and U.S. regulatory interactions, we remain on track for an IND submission in the third quarter and a CTA submission in the fourth quarter of this year.
Subject to additional financing, we expect to initiate a phase I trial for MDG1015 by the end of this year, and to unveil early data from the dose escalation phase in the fourth quarter of 2025. Importantly, our approach to this proposed trial differs markedly from the current approved therapy, which is only used in the rare soft tissue cancer, by targeting patients with higher medical need in a broad range of solid tumors, including common phenotypes such as gastric, esophageal, and ovarian cancer, as well as the rare soft tissue cancers such as synovial sarcoma, myxoid round cell liposarcoma. With MDG1015, this means that we can also target significant numbers of patients in this trial, and thus a significantly large market opportunity of over 108,000 patients in the top eight markets.
Most recently, we announced the lead selection of our next KRAS program, MDG2021. Again, a potentially best-in-class, third generation TCR T-cell therapy targeting KRAS G12D, HLA-A11. We will progress our announced KRAS program towards IND/CTA-enabling work and lead selection, respectively, over the next 2 years. Our partnerships with BioNTech and Regeneron for the MAGE-A4 and PRAME TCRs, we have licensed respectively, continue to progress well and provide crucial scientific validation of Medigene's technology and assets. As these partner programs move into clinical development, they will also provide further clinical proof of concept alongside Medigene's owned program. Additionally, our latest strategic partnership with WuXi Biologics, focused on the co-research and co-development of TCR-guided T-cell engager therapies, for which we expect to have our proof of principle study outcome by the end of 2025. This now brings me on to our partnerships.
To support the development of our research projects, we've established a partnership network of both biotechs and renowned academic bodies. In January 2024, Regeneron Pharmaceuticals, formerly 2seventy bio, commenced patient enrollment in an investigator-initiated trial, or IIT, in Greater China for the program utilizing Medigene's TCR targeting MAGE-A4. Upon reaching the contractually agreed milestones for the IIT, Medigene anticipates receiving an additional set of milestone payments from Regeneron. In February 2024, Medigene and HongSheng Sciences mutually agreed to terminate the remaining framework agreement of our partnership, including the agreements regarding the DC vaccine and the license of discovery. As a reminder, due to the prolonged funding and development pause by HongSheng Sciences, that also included Medigene's NY-ESO-1 targeted TCR returning to us, and the parties mutually agreed to terminate the partnership agreement as it relates to this asset in the third quarter of 2023.
In May 2024, Medigene and BioNTech announced their collaboration to advance TCR immunotherapies against cancer, will extend beyond the initial three-year term outlined at the signing of the Global Research and Collaboration Agreement in February 2022. This extension enables ongoing and future work required to potentially generate novel TCRs directed against multiple, newly nominated antigen targets, that could further expand the BioNTech warehouse of TCR candidates. Subsequent to the quarter, on August 8, Medigene and WuXi Biologics entered into a three-year multi-target strategic partnership to design and co-research T-cell receptor guided T-cell engagers, or TCR TCEs, for the treatment of solid tumors.
We are delighted to call WuXi Biologics our new partner, which combines the respective expertise of each company with Medigene's extraordinary 3S TCR generation and characterization capabilities, combined with WuXi Biologics' unique anti-CD3 monoclonal antibody, its industry-leading TCE platform, a proprietary bispecific antibody platform, WuXiBody. The company is going to co-research and co-develop novel TCR-TCE constructs, which will be owned by both cooperation partners, with options to further advance their development. The development of our research projects is also supported by our long-standing partnerships with academic institutions, notably the Helmholtz Munich and the Technical University of Munich. We remain very active in developing new partnership opportunities to maximize the value of our current and future assets and technologies, and ultimately deliver novel and differentiated TCR-guided therapies to patients. Moving on to our financial results.
For the financial data for the first six months of 2024, our revenue consists of income from service contracts with partner companies, pro rata revenue recognition from upfront payments received in the past, as well as milestone payments. Revenues in the reporting period amounted to EUR 4.5 million, an increase of 45% compared to the EUR 3.1 million in the first half of 2023. This increase is due to the reversal of the remaining contractual liability to HongSheng Sciences HK Limited, following the termination of the partnership.... Selling and general administrative expenses decreased by 5% to EUR 4.1 million in the first half of 2024, compared to EUR 4.3 million in the first six months of 2023, in particular, due to lower personnel expenses.
Research and development, or R&D expenses, increased by 21% to EUR 6.3 million in the first half of 2024, compared to EUR 5.2 million in the first half of 2023. The reason for this is the focus on the development of our TCR-T therapies, MDG1015, MDG2011, and MDG2021, for the treatment of solid tumors, and preparatory activities for clinical trials for MDG1015. The net result of the first half of 2024 improved by EUR 0.3 million- EUR 6.7 million, compared to the first half of 2023, which was -EUR 7.0 million.
In the first half of 2024, the company's EBITDA improved by 10% from -EUR 6.6 million -EUR 6 million, due to the reversal of contract liabilities. As of June 30, 2024, cash and cash equivalents amounted to EUR 14.0 million, compared to EUR 16.7 million, including time deposits for December 31, 2023, with a cash runway extended into July 2025, previously April 2025. This leads me to our current 2024 financial guidance. Performance in the first half of 2024 was in line with the executive management board's expectations. As mentioned earlier, in May, the company reported that it successfully completed an oversubscribed capital raise with gross proceeds of approximately EUR 5.9 million. The company subsequently amended its guidance and extended its cash runway into July 2025.
Initial guidance for 2024 was for a cash runway into April 2025. Research and development costs were also amended and are expected to increase from prior estimates of EUR 11.0 million-EUR 13.0 million- EUR 11.5 million-EUR 13.5 million in 2024, to support additional activities enabling first patient enrollment for MDG1015's phase I clinical trial by the end of 2024, subject to further financing. The company maintains its guidance on expected revenues to be between EUR 9 million and EUR 11 million in 2024, which is unchanged. These projections include potential future milestone payments from existing partnerships that are highly likely to materialize. See the annual report for 2023.
They do not include potential milestone payments from future or new partnerships or transactions, as the occurrence of such payments or their timing and size largely depend on third parties and cannot be controlled or influenced by Medigene. Finally, moving on to our vision. I wanted to confirm what our short, medium, and long-term plans for Medigene are. At the core of our expertise and capabilities is our ability to generate extraordinary 3S TCRs from our unique proprietary end-to-end platform, validated by our numerous partnerships. Further expansion and innovation of our platform is a key enabler for the success of our plans for multiple future TCR-guided modalities, allowing greater access for patients for a range of different but potentially complementary therapies.
In terms of our TCR-T cell therapies, we remain fully committed and are focused in providing clinical validation of MDG1015, and of our emerging library of third-generation KRAS-targeted TCR-T cell therapies, targeting broader cancer patient populations. As mentioned, we hope to initiate MDG1015 by the end of 2024, subject to additional financing, and would subsequently expect an early data readout by the end of 2025, which will provide clinical validation of this as well as our platform. We will continue to extend our collaborative approach to R&D, maximizing our existing partnerships and evaluating new partnerships for our technology and assets. As we develop these highly differentiated therapies, we will continue to seek partnering for these new TCR-T and TCR guided modalities and technologies, leveraging our expertise together with our partners' research and development strengths.
In summary, as a near-clinical stage oncology platform company developing multiple TCR-guided immunotherapies, the first half of 2024 has been incredibly successful for the company. We expanded and executed on our scientific and corporate strategy and have delivered fully, including the first steps against our vision to develop differentiated, best-in-class, TCR-guided therapies for large numbers of patients with solid tumors, while managing expenses prudently and improving our financial position through a successful oversubscribed capital raise. With a range of value catalysts, we're very excited about the second half of 2024 and the prospect of shortly entering the clinic, providing a treatment solution for patients with solid tumors and demonstrating the significant value of our approach. Thank you, everyone, and this marks the end of today's prepared remarks. At this time, I'd like to open up the call for questions.
Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star two. Those on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Anyone with a question at this time. One moment for the first question, please. The first question comes from Joe Pantginis from H.C. Wainwright. Please go ahead.
Hi, this is Sha, in for Joe. Thanks for taking our questions. So I was just wondering if you could provide more specifics about your new partnership with WuXi Biologics, like, about what the partnership will look like over the next three years, and also any terms from the deal that you're able to disclose.
No, thank you very much for the question. So at this moment in time, we have not disclosed specifics of the deal, other than to say it's a potential multi-target collaboration, looking at multiple TCRs combined to their CD3 WuXiBody construct. The idea would be over the next 15-16 months, I think we have guided towards the end of 2025. We'll be ensuring that the combined TCR CD3 construct will be ready for its first lead selection for the first target, and you know, contingent on that, then that partnership will allow us to decide to move further into potential development, i.e., into IND-enabling work and then potentially into clinic.
At the point where we take a selection of the leads based on the TCRs that we will decide in partnership with WuXi, we have the opportunity also to partner out. And historically, just to give some kind of context, WuXi have done this with previous big biopharma partners in January 2023 last year. For example, they partnered out three preclinical candidates with GSK. So there is a kind of benchmark out there to give you some sense of how both companies are thinking. However, I also would add that there is the opportunity for Medigene or WuXi to continue development if we see the further opportunities to create incremental value near-term for both of ourselves.
Perfect. Thank you for the information.
To ask a question, you may press star and one at this time. The next question comes from Abhishek Rawal from AlphaValue. Please go ahead.
Hi, this is Abhishek Rawal, and thank you for taking the question. So my question to the management is around how different is this management, the current management, versus the previous ones, the ones that we have seen over the last 10 odd years? And could you please elaborate also on the cost saving measures that are being undertaken in recent times?
Sure. Thank you, Abhishek, for the question. So, we have members of the previous management on the call with our previous CEO, Dolores, who is currently our CSO. So I'll just make some very general statements. I mean, first of all, the management team has been changed quite dramatically, with biotech specialists coming into the management team with extensive experience, not just in biotech, but also in big pharma. If I look at the team, we have specific expertise now in corporate development, business development, corporate financing, commercialization, and also, we've brought in specialists for early-stage clinical development, particularly and specifically in cell therapy, which is an area that we haven't necessarily had prior.
So to summarize, a very broadened, very expanded, and very highly skilled management team now, that is focusing on moving to the next stage of development, which is to bring our TCR T therapies and TCR-guided modalities into the clinic. In terms of cost savings, just again, to give you a perspective and something that we have communicated over this year, and actually last year as well, we've kept a very tight look at costs, looking at prioritizing programs, reducing programs out of the pipeline, halting and postponing programs, as well as keeping a very tight control over both the R&D and G&A costs, really focusing on projects of maximal value.
So we've been told consistently by potential investors and partners, as well as our colleagues and partners in the investment banks, that delivering clinical data is critically important to validate our platform, but also would give very clear view of how differentiated our platform is. So we have really focused our activities on moving forward our MDG1015 program as fast as possible into clinic. But also, as you can see, we've built out our pipeline in a very careful, judicious way, looking at brand new TCRs, where we believe that there are huge patient benefits still unmet by current or in-development therapies, particularly with the TCRs targeting KRAS, as an example. Finally, in terms of personnel costs, you can see from our financial reports this year, we have managed to do all of that and decrease our G&A costs, predominantly through reductions in personnel costs.
Hopefully that gives you a sense of, you know, the broader picture of what we're trying to achieve.
Thank you. Thank you so much, Selwyn. And just, if I may add just, one last question from my side. In what time frame do you expect the next milestone, probably from BioNTech or, WuXi? So at the earliest, what is, what is the range of time frame that you expect a milestone payment from, any of your partners?
Sure. So in terms of progressive milestones, we've already included in guidance for this year that we expect milestones from our partners. We've not specified which partners or the amounts, and linked them to a specific partner. But if I said to you that we have guided to a $1 million milestone, as well as a EUR 2 million milestone, you'll be able to join the dots together, and we expect that this year. Obviously, as well, that we are working very well with BioNTech, and so we are working on a number of targets, beyond what we have previously communicated and is in the public domain.
We would expect milestones based on the natural progression of delivering data that shows compelling differentiation, and then that will be up to BioNTech to nominate and therefore choose any given particular TCR that we develop for them. We see a milestone this year, and we see milestones in 2025.
Thank you so much. That was very clear on your side. Thank you.
Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Pamela Keck for any closing remarks.
Thank you, operator. Thank you. Can you hear me? Yeah.
Yes, we can.
Okay, thank you. Thank you everyone for joining us on the call today. Thank you for your time, and we're looking forward to providing you with the next update in due course. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.