Good afternoon and good morning to the U.S. My name is Anna Niedl. I'm responsible for the investor relations at Medigene. I would like to welcome everyone to today's conference call in which we will describe Medigene's financial and operational results in the first half year of 2022. Today's presentation, as always, is available for download on our website, and this call will be recorded and will be accessible later on our website as well in the same section. With me today here on this conference call are Professor Dolores J. Schendel, our Chief Scientific Officer, and Dr. Birger Kohlert, our Chief Financial Officer. I would now like to draw your attention to slide 2 of the presentation, and would like to remind you, as usual, that during this conference call we will present and discuss certain forward-looking statements.
With this said, I hand over to Dolores J. Schendel and slide 3 of the presentation.
Thank you, Anna. Let's first turn our interest to our investment highlights. Our business model is to leverage our cutting-edge scientific research to develop innovative immunotherapies against cancer. The excellence of our technology is confirmed by our past and present partnerships, and we employ approximately 70 people, and Medigene currently has a market capitalization of about EUR 60 million. Let's look at the next slide. This illustrates how we develop our projects around two pillars. On the left, we deal with generation of T-cell receptors to meet needs for multiple types of cancer by targeting distinct target antigens. At the bottom, you can see we started with two cancer testis antigens for blood cancer, one for our own TCRT trial and the second TCR was out licensed. We use the same and further cancer testis antigens for solid cancers in the middle block.
Three are in the hands of partners for further clinical development. Additional undisclosed T-cell receptors are retained for our own in-house projects or for BD purposes. Third, at the top, we have in-house discovery projects on tumor-specific neoantigens from dark matter antigens to shared tumor mutations that are in earlier stages of finding TCRs and understanding the safety profile of these antigens. The second pillar is built around cutting-edge technologies on the right. I will shortly discuss two of these. Important is that these add-on tools can be combined with different T-cell receptors, as listed on the left, to create the appropriate combination drug products to meet the needs of individual cancer indications. Let me use this slide to briefly elaborate on our partnerships. Hongsheng Sciences as the first example. Medigene was informed that Roivant Sciences sold its holding in Cytovant Sciences in July.
After this sale, Cytovant became Hongsheng Sciences. Thus, Roivant is no longer involved in this company. Hongsheng Sciences has temporarily suspended its development activities within the Medigene partnership until new funding is available. We are currently monitoring events closely and will announce as soon as there are changes relevant to Medigene. 2seventy bio, this was formerly bluebird bio. At the end of June, the research term for this partnership was successfully concluded in accordance with the contract. This conclusion, of course, does not affect Medigene's entitlement to future milestone payments and royalties from 2seventy bio regarding product candidates that arise from the collaboration. Simultaneously to these changes, Medigene has started the extensive work under the new, bigger, and more complex partnership with BioNTech. Let's go to the next slide and discuss how Medigene develops drug products for personalized TCR-Ts against cancer.
As a full-scope TCRT technology company, we have also successfully established a robust process for manufacture of TCRTs that are made individually for each patient. This starts with acquisition of a larger number of white cells through a leukapheresis in step one, purification of the T-cell fraction, introduction of a T-cell receptor selected for a given trial for use in all trial participants. This receptor is transferred into activated patient T-cells in step two. These TCRTs are then expanded to the required numbers and frozen as drug products. The frozen aliquots undergo quality control assessments and shipment of the final drug product to the center for treatment. This is then thawed at the bedside for a single infusion into the patient.
These drug products are living cells, and we want them to expand in the patient, eradicate the cancer cells in the body, and build a persistent memory that is retained by the patient for longer periods of time. If we look at the next slide, one can see the proof of concept of how we implemented this manufacturing, as well as our TCR discovery platform into MDG1011. Medigene performed this first TCRT trial in patients with refractory or relapsed blood cancers of the types AML, MDS, and multiple myeloma. The phase 1 part of this trial was a dose escalation study in which small groups of patients were dosed with different amounts of TCRTs that are increased at each point of escalation. We achieved satisfactory study outcomes in this proof of concept phase I. Our TCRTs did not cause any dose-limiting toxicities or neurotoxicities.
We were highly successful in manufacturing the drug products from very ill patients who had undergone extensive chemotherapy before entering into the trial, and some were very advanced patients with respect to age. In four of the nine patients, we saw signs of biological or clinical activity of the TCRT. In two cases, we observed cytokine release syndrome, which shows that the TCRTs were responding immunologically to the cancer cells in the patients. We saw clinical responses in two patients, one complete response in a patient given the lowest dose of cells, but this response was only transient. We presume that this patient did not receive enough cells to establish long-term persistence, something that one learns through the dose escalation study.
The last patient in the trial, who received the highest dose of cells, had MDS and cleared all signs of AML blasts in the bone marrow. His disease did not progress to fulminant AML, as predicted to be imminent at the time of trial entry. This patient remained in a progression-free status at his last study visit at 12 months in June. We can still detect TCRTs in the blood, showing our desired long-term persistence. Final data are currently being analyzed and will be published as soon as they are fully available. As announced earlier, we will only proceed to phase II with a partner because of the need to have large patient numbers that must be recruited into the trial and could only be managed in an extensive international study involving multiple countries. Let's look at the next slide.
What distinguishes Medigene from other TCR-T companies in this arena? We have a high throughput robotics platform that allows us to isolate optimal affinity TCRs for an enormous variety of target antigens. We use starting T-cells from healthy donors, so we're independent of patient materials that are limiting, complex to organize, and require screening of many patients to obtain suitable clones. By the use of healthy donors and the screening of many thousands of T-cell clones, we can find TCRs that are earmarked by three characteristics. We call these the 3S TCRs, exquisite specificity, high sensitivity to the target antigen, and clear safety profile, so specificity, sensitivity, safety, representing the 3S's. These TCRs do not need to be mutated to display these characteristics, which contributes to their safety profile and distinguishes us from several of our competitor companies.
Finally, our discovery approach allows us to find TCRs that see peptides from different antigens with different HLA-presenting molecules. This is a peculiarity of how T-cells function in antigen recognition. The capacity to find TCRs seeing peptide with different HLAs broadly extends the number of patients that can be treated in the future with TCRTs, and this is a specialty of Medigene. On the next slide number 8, the second differentiating characteristic of Medigene's technology for TCRTs is that we use our deep science-driven experience to develop better TCRT drug products through implementation of innovations that are developed in-house. The first tool is the so-called switch receptor that we combine with any of our individual TCRs and which can improve persistence of TCRTs in vivo. In the normal situation of solid tumors, TCRTs will express a second surface molecule called PD-1.
When this molecule interacts with its counterpart on tumor cells, the TCRs are rapidly blocked in their function. We purposely place a variant of the PD-1 on the surface of our TCRTs that, upon encounter with PD-L1 positive tumor cells, does not lead to inhibition, but rather leads to activation and enhanced proliferation of the TCRT. Let's look at a minute at the business implications of our switch receptor technology. In the upper half of the picture, you see the approach being applied by other TCRT companies to overcome the PD-1 driven inhibition of T-cell function. They develop combination therapies that include the TCRTs with an antibody to either PD-1 or PD-L1. The antibodies serve to block the PD-1, PD-L1 binding so that negative signals are not transmitted to the T cell.
However, combination therapies are difficult to develop clinically when both components distribute differently in the body and have different toxicity profiles. One is dependent upon another company to provide the antibodies, and the combination therapy will be very expensive since it combines two expensive drugs. We use an alternative innovation and build our inhibitor of the PD-1, PD-L1 pathway directly into the TCRTs by introducing our switch receptor into the TCRTs using the same gene vector that we use to transfer the TCR. Not only do we avoid the need for combination with an external antibody, our switch not only blocks inhibition, but also enhances the activities of the TCRTs and fosters their long-term persistence in the hostile environment of solid cancers. Since both components are present in the same T cells, their distribution is identical and one can assess the toxicity profile of the single drug product.
This reduces complexity, eliminates dependence on the product of another company, and will cost less for patient treatment. Thus, this intrinsic combination therapy remains fully in control by Medigene with our selected TCRs. Let's then turn to slide 9. The second tool allows us to alter the constant region of the two chains of a T-cell receptor, so that they can only pair with each other. When we make TCRTs with our tumor-specific TCR, each recipient T-cell of the patient has its own natural TCR, and we are adding a tumor-specific TCR alongside this natural TCR. With precision pairing of our added TCR, we can keep these two TCRs, the natural one in each individual T-cell and our added T-cell receptor, from mixing up with each other.
This gives us better surface expression of our tumor-specific TCR and inhibits building of unwanted mixed TCRs about which we know nothing in advance, and thereby that presents a potential safety issue. Now let's turn to slide 10. If you look at our two pillars, you can see that we build a compelling pipeline of TCRs in one pillar, and we generate innovative tools in the second pillar. These can then be mixed and matched as best needed for particular unmet clinical needs in each intrinsic combination of TCR and tool. Thereby, we have created a unique drug product, increasing the value of creation that would come from any single component. With that, I hand over to Birger.
Thank you very much, Dolore s. The financials for the first six months of 2020 contain revenues of EUR 25.3 million, R&D expenses of EUR 3.7 million, and as a bottom line, EBITDA of EUR 15.4 million. However, R&D expenses as of now are below the expected range for the whole year of 2020, and as a consequence, the EBITDA is too high either. However, we still hold on our published guidelines, as the current picture is highly influenced by the BioNTech deal that was concluded in February and continued R&D expenses are included in our expectations. Cash and cash equivalents as of June 30, 2020 amounting to EUR 39.4 million. No milestone payments or cash inflows included from existing or future partnerships or any other transactions are included in our planning.
Meaning our sufficient financial resources to fund business operations is quarter four, 2024. Thank you.
Thank you, Birger. Let's try to sum this all up on slide number 13, and illustrate how Medigene tries to maximize value creation for our shareholders. We have different levels of TCR discovery, starting from our existing TCRs, discovery of new T-cell receptors in our alliances, exploratory studies for exotic antigens with potential broad application in the future. From this diversity, we position ourselves to be able to select the best clinical development programs that we can afford to develop in-house. By choosing wisely, we create new business development options as reflected in our BioNTech deal. Our TCRs are envisioned to be combined with tools from the second pillar, creating a multiplicity of drug products.
Our goal is to achieve clinical validation of the best TCRTs through our own in-house programs and through our alliance partners. Of course, in the end, this should all drive to the successful development of treatments for patients with solid cancer. As you all know, Dr. Selwyn Ho became our new CEO on the 25th of July. I very much enjoyed the opportunity to guide you through today's earnings presentation, covering our achievements until now in 2022, and look forward to many more events in the future under the lead of Selwyn. Please allow me to make one further closing remark. With Selwyn just arriving last week, we did not yet define and publish our financial calendar for 2023, as we would usually do in our half year report. This will come in our Q3 2022 quarterly statement.
Thank you to all of you for joining today, and we all look forward to passing the baton to Selwyn Ho as our new CEO. With that, I turn back to Anna.
Thank you, Dolores, and thank you, Birger, for the presentation. We can now switch over to the Q&A session. I have received some questions in writing, which I will read out, and we answer them here in the room. Otherwise, I would now hand over to the operator. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from Xian Deng from Berenberg. Please go ahead, sir.
Hello. Thank you for taking my questions. I have a couple, please, if that's all right. I guess the first one is that with the ongoing, you know, exciting collaboration with BioNTech, I was just wondering if you could share, you know, any comments, you know, on this collaboration, like how is it going? You know, any comments on the, you know, progression of, you know, TCR four or, you know, any other project you're working on, you know, that would be great. The second question is on 2seventy bio. Just wondering, I mean, your comment that, you know, the current part of the collaboration has been concluded. I was just wondering if you are expecting any upcoming milestones.
Also just wondering for this, you know, collaboration with 2seventy bio, you know, will we be developing new targets for them, going forward, or is it kind of on hold, for now? And lastly, if I may, on Medigene MDG1011, you know, after the initial sort of, you know, clinical result that you reported earlier this year, just wondering, you know, when do you have a rough timeline of when we'll be publishing the final analysis, please? Thank you very much.
Okay, thank you. I'll pick up on all three of those. BioNTech, we are in full force with the collaboration with BioNTech. We have started all of the projects that they've specified up to this point, and we have those adequately staffed. A very strong alliance is developing, very good interactions at the scientific level, and those projects are commencing according to plan. Additional projects will be named by BioNTech through the course of the alliance, and we feel we'll be able to meet all the expectations that BioNTech places on us for moving different dimensions of this very complex project alliance forward. 2seventy bio, we have completed the formal research TCR discovery part of the alliance, but beyond...
2seventy bio is responsible then for development of clinical programs, and they have continued to announce that they're moving forward with their MAGE-A4 project. They are reporting on the timing and the constellation of how that moves in clinical development. One can follow that through BioNTech's or through 2seventy bio's announcements on the MAGE-A4 program. For MDG1011, we've finished the formal part of the phase I after the last patient had the last clinical visit at the end of June. That means that part of the trial is now concluded, and one is working on preparation of the clinical study report and preparation. There are still multiple laboratory investigations going on, looking at the T-cell persistence and the impact on biomarkers in that patient.
As soon as all of that data is available, we will be releasing further information and are already envisioning where information from this trial can be presented to the scientific community and to our, to the interested parties who want to learn more about the MDG1011 trial. We are just very pleased that after 1 year, this patient is still doing fine. Has no signs of progression to secondary AML, which was judged to be imminent when the patient came into the trial, and we can still detect our TCRTs at 12 months. That was one of the very important characteristics that we were looking to establish in this, in this trial.
In addition to establishing that we have a very robust manufacturing platform now, which can be expanded, extended, modified, for use in our upcoming solid tumor TCRT trial. That was a major step forward for us, having that manufacturing approach validated, having the quality control assays that teach us really a lot about our drug products, and having sophisticated immune monitoring tools that are allowing us to track long-term persistence of TCRTs in blood samples from our patients.
Thank you.
Okay. As there are no further questions, I will hand over to Anna for the written questions.
Okay, thank you very much, operator. Some of the written questions were already covered here, so I will now move through them. Dolores, a question to you again. Is BioNTech or Medigene funding the ongoing development of TCRs for which BioNTech has already acquired a purchase option?
Yes, for all of the work that we're doing with BioNTech, we receive for all experimental work an addition of information and continuation in investigation of candidates of interest to BioNTech. They fund our full R&D expenses.
What is the approximate share of Medigene's man hour capacity in research that is taken up by BioNTech at this point? Will this likely increase, or phrased differently, what share of man hour capacity is still available for other potential partners or for Medigene's own research projects?
Well, as I outlined, we have reached the conclusion of the TCR discovery projects for 2seventy bio. That freed capacity, experienced scientists to work on projects. With the current pause in the Cytovant in the Hongsheng collaboration alliance, we have also capacities available, and we can apply those both to the BioNTech projects, and as we've indicated, there are multiple projects being done with BioNTech, as well as to our own in-house projects, so that we have fully adequate capacity to pursue both arms of research and development at Medigene. We're well-positioned to meet BioNTech's needs, but also to keep our own projects moving forward expeditiously.
Thank you. There are further questions also regarding MDG 1011 and its future partnering. Is Medigene at this stage in negotiations that could realistically result in a partnering for phase II clinical trials? Medigene had any exploratory talks for partnerships beyond BioNTech and MDG 1011 during the last quarter? Is the focus for partnering more on traditional TCRs or on dark matter TCR targets? How is Medigene actually addressing potential partners to form new partnerships? Is Medigene primarily offering its own TCRs with or without its tools, or has Medigene also offered licenses to its tools, i.e., with or without its TCRs, to third parties other than BioNTech?
Well, that's a really complex set of questions, so let me just phrase it this way. I would call our ongoing business development activities business as usual, since we are in constant discussion with potential partners for future business development activities. In essence, I can say yes to all of the above options that we have gone through. For example, the clinical study report for MDG1011 is now an important document to complete for MDG1011 discussions. Because each month that we could continue to observe the final patient staying in remission gives us valuable clinical information, but that is also backed up by our sophisticated immune monitoring tools that are telling us about the persistence of the TCRT.
That was kind of a waiting point for many discussions around MDG 1011, to have that one year end of trial visit for the last patient in the trial. We're constantly in discussion with various potential partners regarding different assets, and as usual, would inform the public as soon as there is something specific to report on. Regarding our tools, we certainly see them as independent of T-cell receptors, and so we are open to and hold discussions to license or to engage in projects around our specific tools. In which we also gave licenses to BioNTech for two of those tools.
We have one last question in writing here. Dolores, again to you. Allogeneic TCR solutions and soluble bispecific TCRs are currently a main focus with other biotech players and thus with analysts and investors. Medigene could obviously also contribute TCRs to such solutions. Has Medigene itself investigated the potential of such a product, or has Medigene been approached by other players, by players working on bispecific antibodies for potential collaborations or contributions in this direction?
Well, I think one important point at this point is that the Immunocore market authorization of their TCR bispecific has really raised the level of understanding and interest in these bispecifics. There's no doubt that Medigene has the capacity to find and develop the TCR binding arm of such bispecifics, and we're open to engage in such collaborative efforts. Here in-house, we continue to concentrate on our TCR expressing cellular drug products. That comes to the very special dimension that distinguishes TCRTs from bispecific antibodies. One needs to consider that bispecific antibodies both use a T cell and TCRTs both use a T cell receptor to bind the drug to the target cell.
A bispecific is very much like an antibody, so it's a molecule that will be cleared from the body, and that means for long-term tumor control, one will need multiple applications. We know from the antibody field that not every antibody specificity turned out to be clinically relevant, so there needs to be a lot of research to understand and probably just sort through which binders will be effective in a soluble form. We see the advantage in the cellular drug products from the dimension of being able to include add-ons in the recipient T cells.
I've spent some specific time trying to point out the true advantages of, for example, our switch receptor technology, because this is a tool that goes beyond what any normal T cell that is attracted to the second arm of a bispecific could ever be expected to do in the body of a patient. Ours are really tailored through the combination intrinsic switch receptor with the T-cell receptor to provide enhanced functions, but longevity, persistence, long-term memory. We think those are attributes that will really have the most power in treatment of patients with solid cancer. You can't incorporate such an add-on, that kind of tool, to a bispecific. Again, you would be into using combination drug therapies with different patterns of biodistribution, different individual toxicities, and quite some complexity in using those in clinical development.
I think that's the major differentiation why currently at this time, we're open to partnering TCR binders for others, developing bispecifics, and we're pushing to have our intrinsic TCRTs that bring the add-on technologies behind our platform for innovative tools.
We received one more question in writing. Dolores, this is again to you. Medigene promotes a TCR 3S tools metrics approach. Could you please shed some light on the availability of precise products in this respect other than the TCR-4 at this point in time? What is the service that Medigene could offer to interested parties?
Okay, let's go back to what has happened in the first half of 2022. We put major efforts into initiating and getting the BioNTech alliance running smoothly and at full capacity while keeping our new in-house projects progressing well. Up to this point, to add another large deal for a company our size would have been difficult. Now that things run smoothly, we open up broader discussions once again. As before, we continue to generate interesting TCRT products. We build next generation drug products with our tools, and we'll have new TCR receptors as well as tools coming up in our emerging pipeline according to our matrix concept. These then become opportunities for advanced clinical development projects coming through the Medigene pipeline, as well as business development opportunities for additional partnerships, as we did with BioNTech in the first half of the year.
Okay, ladies and gentlemen, as a reminder, if you wish to ask a question, you may press star followed by one on your phone. The next question is from Victoria English from Evernow Publishing, publisher of MedNous. Please go ahead, ma'am.
Yes. I'm reflecting on your slide 13 and your item regarding dark matter antigens. I'm wondering if you could just give us a little background information on how your discovery efforts there are going.
Yes. Well, this is a project that we initiated with the Université de Montréal out of the interest to understand peptides that are presented on the surface of tumor cells that are not derived from protein coding regions of the genome, but are derived more from regulatory regions of the genome, which normally one thinks are silent. In some cases, in an aberrant tumor microenvironment, they can be translated and displayed as peptides on the surface of tumor cells. In our collaboration with the Université de Montréal, we gained access to a collection of these dark matter. That's what they're called dark matter, because they're coming from regions of the genome that we know very little about. We acquired access to near to 50 of these peptides.
The next step is it's not hard to define which HLA molecules are presenting those peptides, but it's a big step to determine, are any of these of interest to T-cells? We have lots of peptides on the surface of cells that the immune system will ignore. That required our high-throughput robotics platform to look for evidence of T-cell responses to these dark matter antigens. We, Shu did the extensive work to look for reactive T-cells and came up with a more limited spectrum of those peptides that could be seen by T-cells.
Once we could bring the number down to a workable number, and we would have access to five candidates, if we see that they are good targets for T-cells but also safe targets for therapy, then we could move on to very extensive biomarker studies, which we are currently working on to determine the true distribution of these peptides with respect to tumor types, because one would ideally want broad tumor expression in multiple different cancer types and then high levels of expression in tumors for a given indication in multiple patients so that they can pull in an adequate patient size for clinical development. But parallel, one needs to understand the safety profile of these, and that requires deep scientific expertise to establish that.
That is the final characteristic that we're working on to be certain that we would understand adequately the nature of these antigens and where they are expressed or not expressed in cancers versus healthy tissues, in order to make a determination. Are those good target molecules or in our platform, are there other target molecules that we explore in parallel that might build better business development cases and be more interesting for us to frontline at this time? Those are decisions we are now-
If I can just follow up and ask you, how far away are you from reaching a conclusion about a handful of molecules?
Well, that will certainly happen in the next period of time. That will be decided certainly in this year.
Okay, thanks.
Ladies and gentlemen, once again as a reminder, if you wish to ask a question, please press star followed by one on your phone. So far, there are no further questions, and I would hand back to Anna Niedl for closing comments.
Thank you, everyone. Thank you for joining the call, and thank you for asking so many questions. With this, I would like to close the call now and let's speak again and meet again, I guess, through our next conference call, which will be with the annual report 2022 at some point next year in March. See you and goodbye. Thank you to everyone. Bye-bye.