This call is being recorded, and for the duration of the call, your lines will be in listen-only mode. Presenting today is CEO, Antti Vuolanto, after which CSO, Henri Huttunen, and CFO, Tone Kvåle, will join the call for the Q&A portion. You can type your questions in the Q&A section of the webinar dashboard. Questions will be taken in the order they are received. Additionally, during today's webinar, management may make forward-looking statements that involve known and unknown risks, uncertainties, and other important factors beyond the company's control that could cause the company's actual results, performance, or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.
Actual results and the timing of certain events may differ materially from the results implied or timing predicted by such forward-looking statements, and reported results should not be considered as an indication for future performance. Please note that these forward-looking statements made during this webinar speak only as of today's date, and the company undertakes no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. This webinar is being recorded and will be available soon on Herantis Pharma's website under the header News and Events and the subheader Company Live Presentations. With these formalities out of the way, I would like to now turn the call over to our CEO. Antti, you may begin.
Thank you. I'm happy to host the first half report of Herantis. Just to remind you that we are an innovative biotech company, and we develop disease-modifying therapies for Parkinson's disease. Especially we are now concentrating on the HER-096. That is a peptide mimetic compound that has been designed based on the active site of its parent protein, CDNF, and HER-096 combines the very compelling multimodal mechanism of action of CDNF together with a patient-friendly administration. Let's go into the highlights of the first half of this year.
On the financing side, we successfully completed two fundraising rounds, directed share issue and the rights issue with the gross proceeds combined EUR 8.7 million. We have also reported very encouraging blood-brain barrier penetration data in dogs with HER-096, so that rounds up the previous data that we have from smaller animals. We also reported the results of a proof- of- concept study with Nanoform in which we demonstrated a successful preparation of HER-096 nanoparticles. We have also strengthened our management team by appointing Charlotte Videbæk as Vice President of Clinical Development. Of course, then, we have had some transitions as of the CEO.
In January, our board member, Frans Wuite, was appointed as an interim CEO. Now in July, I was appointed as the CEO while Frans still continues in the board. Maybe some words about myself. My background is that I am a Doctor of Science in Technology as training. I have been in the drug development since 2009. Then I was working more on the immuno-oncology side for almost 10 years. After that, I joined Herantis four and a half years ago to lead the operations as I have very strong experience in manufacturing, in quality operations, in preclinical and clinical development, and also developing these kind of expert organizations.
I would say that the transition period now has been quite smooth and I am really happy to be here in my new role. Let's go into the milestones that we have as a company. As I said, we are concentrating now fully on the HER-096, and our near-term milestones include to complete the preclinical safety package that is needed for the submission of clinical trial applications. These will take place during this year.
The first human dose in the phase I study that is planned for next year that we aim to have during the first half of next year and the evidence of HER-096 safety and blood-brain barrier penetration in humans is a target for us for the second half of the next year. As a summary about Herantis what we do— we believe that HER-096 has all the characteristics to be to potentially become a new type of therapy for Parkinson's disease as it has very unique disease-modifying mechanism of action. Then those kind of treatments are currently not available for Parkinson's disease. The market in Parkinson's disease is huge.
Currently, there are over 8 million patients globally, and as I said, no such treatment available that we are currently developing here at Herantis. We know that HER-096 rescues dopaminergic neurons and passes the blood-brain barrier in pre-clinical— based on pre-clinical data. Of course our job is to demonstrate this then later in humans as well. The previous work that we have done with CDNF both in pre-clinical settings and in the clinical settings that really, really risks the HER-096 development as we are basically having the same mechanism of action with HER-096. Our company strategy is to actively work on the partnering side.
We especially are looking forward with the next year a blood-brain barrier penetration data with HER-096 in phase I-A clinical study, as we believe that would be a critical milestone for the partnering discussions together with the safety data that we will get. Let's go then into a short description of where we are with our development. Just reminding you about Parkinson's disease, which is the second most common neurodegenerative disease. Parkinson's disease is a disease in the midbrain where dopaminergic neural cells, they lose their ability to produce dopamine. That causes both motor and non-motor symptoms.
Currently the treatment is only capable of treating the symptoms, but they cannot affect the disease progression. This is very important to keep in mind when we are developing a disease-modifying treatments. At the time of diagnosis, approximately half of the dopaminergic activity in the midbrain has already been lost. Basically, if we want to affect the disease progression, we need to be able to treat early-stage patients. We cannot wait, for example, until 10 years, as then, the dopaminergic activity has been reduced by maybe 85%-90%. We also need to bear in mind that the economic burden of Parkinson's disease is huge. Currently, only within European Union, it is estimated to be over EUR 14 billion per year.
It is also expected that the number of Parkinson's patients are increasing over the next decades. Our aim is to develop a completely new type of treatment for Parkinson's disease in order to stop the progression of the disease. Now I give the word to Henri Huttunen, our CSO, to go through more about the HER-096 and where we are with the development.
Thank you, Antti. While neuropathologically, Parkinson's disease is characterized by the progressive degeneration of dopaminergic neurons and also accumulation of deposits of aggregated protein in the brain, on the molecular and cellular level, there's more diversity and particularly the disease progression involves multiple types of mechanisms. HER-096 similar to CDNF, actually engages with three very important facets of the disease, if you will. First of all, the compound is interacting and targeting the unfolded protein response pathway in the cells. This is very important.
The unfolded protein response pathway is an adaptive stress responsive mechanism that aims to protect the cells from, for example, proteotoxic stress that appears in dopamine neurons in Parkinson's. We're targeting a key mechanism to help the cells to survive. Also, HER-096, similar to CDNF, has direct effects on alpha-synuclein aggregates. The alpha-synuclein protein in aggregated form is the main constituent of the Lewy bodies that accumulate in the patient brains and are kind of like the key neuropathological hallmark of the disease. This protein aggregation pathology is for example targeted by various immunotherapies aimed to reduce the alpha-synuclein aggregate levels in the brain.
We know that HER-096 also in preclinical models, for example, has robust effects on the alpha-synuclein aggregation pathology. Thirdly, and also very importantly, there is inflammatory processes triggered by the continuous progression of degeneration of dopamine cells, as well as various type of glial cells responding to— Pardon, we have some technical issue here. Inflammatory processes, particularly neuroinflammation, is an important part of the disease process. The unfolded protein response pathway is centrally— Again, apologies for the technical issue. Neuroinflammatory processes are essentially involved in the disease pathophysiology and in the progression of the disease.
The unfolded protein response pathway is on the molecular level very tightly linked to the inflammatory processes. We are targeting key essential elements of Parkinson's disease on the cellular level by HER-096. To remind you, while CDNF, an endogenous protein of the human body, provided an excellent opportunity for disease modification in Parkinson's, it had also challenges, particularly because of the protein nature, the drug, CDNF. The drug had to be administered directly into the brain. This is technically very complex and also involves safety risks for the patients.
Several years ago at Herantis, we started a program for development of next generation compound based on the CDNF biology and HER-096, which was released last year as the preclinical candidate. It is now the small synthetic peptide mimetic compound that engages with exactly the same pathways as what CDNF does. The key additional feature for HER-096 is that it can penetrate the blood-brain barrier, which is the key technical challenge in all CNS drug development programs. We are combining two very important parts in a single molecule. We have the disease-modifying potential, addressing multiple important pathophysiological mechanisms of Parkinson's disease, together with the compound's ability to penetrate the blood-brain barrier to allow peripheral administration.
See, HER-096 also has additional benefits compared to a biological drug and particularly CDNF. One is that it's manufactured very cost efficiently by a simple chemical synthesis instead of a complex biological processes which was required for a protein. Also we have now extended patent protection since the key patents for HER-096 were filed in 2019, end of 2019. Now CDNF, the decade of research by Herantis and also by many others on the academic side has provided a wealth of data on CDNF biology, on its effects in various disease models. This provides a great basis for HER-096 development. We believe that this is an essential de-risking element for the whole HER-096 development program.
There's now a good understanding of CDNF mechanism of action. There was actually a new paper that came out this week from the team at the University of Helsinki showing how CDNF modulates the unfolded protein response pathway on the molecular level. These type of incremental increase in our understanding of the CDNF biology is of course important for Herantis as well. There's evidence from various preclinical models, animal models of disease in Parkinson's, ALS, Huntington's, others, stroke, that CDNF really can protect various types of neurons and improve the symptoms in these animal models of disease. Of course, the phase I study that we completed with intracranial CDNF in moderately advanced Parkinson's patients provided an excellent data set to support further development of HER-096 as well.
Particularly, we're excited about the biomarker data that was generated in this study. We have now done some back translational work, if you will, to connect these biomarkers also to HER-096 and quite excited about the new data that's coming. Over the years, the data set that has been building for CDNF provides also good translatability for HER-096. We know that CDNF on in- vitro cellular models, various models, CDNF engages with the UPR signaling pathways, and it protects neurons in a way that's dependent on modulation of the UPR system.
In animal models, we have shown that in Parkinson's models, both in toxin models and also alpha-synuclein based models, CDNF has a robust neuroprotective and neurorestorative effects. We've also learned that in aged non-human primate model of Parkinson's, CDNF has very robust neurorestorative effects and also improves both motor and non-motor symptoms of the disease. Here, for example, you can see on the top right corner, now that the cursor is not moving. The top right corner, you can see the difference of the sprouting of dopamine neurons in the nigrostriatal system of the monkey. Compared to the placebo group, the CDNF group has a really strong effect on a restorative effect on the dopamine neurons.
In the box number four here, top, bottom left, again, the translatability is strongly supported by the phase I data with CDNF showing biological signs and biological response to the treatment in individual patients. This all now forms the basis to support HER-096 development. We've already learned over the past year that HER-096 can and shown that HER-096 engages with the same targets with CDNF, and it has exactly the same type of neuroprotective effects on dopamine neurons in the alpha-synuclein- based animal models. During the first half of 2022, we have taken the preclinical program of HER-096 forward. The top right corner summarizes the pharmacokinetic and distribution data that we have generated.
We have now confirmed in three different animal species effective brain penetration. In mice, rats and beagle dogs, we see that subcutaneous delivery injection of HER-096 results in pharmacologically active dose levels concentrations in the CNS, particularly in the cerebrospinal fluid. The PK profiles in between different species are quite similar, which is good for prediction of what might happen in the first human study. Importantly, we are on track with our method development for phase I-A so that we would be able to demonstrate the BBB penetration next in healthy volunteers in the phase I study. On the left-hand side is a brief summary of our pharmacodynamic studies.
We have shown by using an aged mouse alpha-synuclein model of Parkinson's or alpha-synucleinopathy in general, we have shown that subcutaneous injections of HER-096 three times a week are effective in protecting the dopamine neurons from the progression of the pathology. We have shown that there is a robust decrease in alpha-synuclein aggregates in the affected brain region. We also have shown there's a very, very strong effect on reducing microgliosis and neuroinflammation in the affected brain region. Importantly, also during the first half of 2022, we've produced data to show that the dose response in this animal model is very much as we predicted based on the known CDNF biology and previous CDNF studies.
Now, moving towards the first human study, of course, preclinical safety and toxicology is important. We have completed preclinical toxicology studies in rats. 28-day GLP toxicology study, the in-life phase was completed during the summer, and the reports are now being finalized. A similar 28-day GLP toxicology study in beagle dogs is currently ongoing, and I believe the last dosing will take place tomorrow. Which then, we'll follow up with detailed analysis of the animals post-mortem and hope to finalize the reports for the toxicology program by or during the Q4 this year. This means that we're on track with our preclinical program. There hasn't been any unexpected findings in these toxicology studies so far.
Our goal of submission of the clinical trial application for the phase I study by end of this year is on schedule. I believe this concludes our R&D review, and we can now move on to questions.
Yes. Correct. Thank you, Henri.
Thank you, Antti and Henri. Let's see. We do have a handful of questions here. Let's start by saying, if you would like to ask a question, please type your question in the Q&A section of the webinar dashboard. We are receiving the questions and answering them in the orders that we get them. The first question is: Now, with a new CEO, has the company's vision and goals changed? Can you provide us with some of your new vision for the company in the short term and in the long term?
During the first half, actually, I think it was in January, we communicated about the strategy that the company will focus on HER-096. This is clearly the vision and the goal of the company also now. In that sense, nothing has changed. Now we focus on the lead asset, HER-096, and we want to demonstrate the safety and blood-brain barrier penetration in humans next year, as we believe that is a major milestone for HER-096.
As Henri explained, reaching the target tissue in the brain has been one of the major obstacles in developing new pharmaceuticals for CNS diseases, and that's why we believe that once we have done that during the next year, we are in a good place to further develop the compound and also related to the partnering discussions. That's— the other aim that we have, so be very active on the partnering discussion side as well.
Well, that almost answers the next question. Can you give us a little bit more detail on the ongoing partnering discussions?
Yeah. As very standard for small biotech companies, we have been in ongoing discussions with all, like, I would say, all the pharmaceutical companies that are active in the, let's say, on the aging-related diseases, CNS diseases over the years. During this year, especially when we have been able to create a very compelling data package of HER-096, including the preclinical efficacy data, mechanistic understanding, and demonstrating the blood-brain barrier penetration, I think we have had very fruitful discussions during the first half of this year. Now we will continue those discussions. We will open up some more discussions.
Now after the COVID restrictions have been lifted, we really look forward for active in-person meetings with several companies as we are able to participate in live partnering events after two years of COVID restrictions. However, it's good to keep in mind that the outcome of such discussions is very difficult to predict, and the timelines in these discussions is long. I'm anyway very positive about our current data package and the opportunities that it gives in these partnering discussions.
Great. Our next question is, congratulations on your recent raises. What will the proceeds be used for, and how will it create value for shareholders?
Tone, will you take this?
Yeah. Thank you. We are pleased with the investor interest in Herantis, and also the fully subscribed rights issue, especially under these difficult market conditions that we have been seeing now the first half of this year. The net proceeds will be used to conduct a phase I-A clinical study with HER-096 next year. As both Henri and Antti said, the aim of the study is to demonstrate the safety and also the active, that we can see the active concentration of HER-096 can reach the brain after a subcutaneous administration in humans. We think that this is a very important milestone for the company, and it will de-risk further development of this asset. We also believe that if we are achieving this milestone, it will create significant value for shareholders and also open up new prospects for partnering.
Great. Thanks , Tone. You are now preparing for the first in-human study for HER-096 for the first half of 2023. Where are you in the process, and what are the remaining steps? Can you give us some details?
Henri, please.
Yes, I would be happy to do so. Of course, there are various things to consider. One, if we start from manufacturing, we are currently in the process of manufacturing the drug substance, the active pharmaceutical ingredient. And the GMP manufacturing of the drug substance will be completed by roughly end of Q3, so end of September. We will move on to manufacturing the drug product. The formulation is fairly simple for the subcutaneous injectable product. We will be ready by the drug product manufacturing as we will be submitting the CTA. Of course, the pre-clinical program will be completed on schedule.
Now we are close to having completed the in-life phase in the toxicology program. All studies are on schedule in that sense. We're now starting to prepare documentation for the clinical trial application. The phase I-A study design has also been more or less fixed where we're ready with that. The study will be a single ascending dose study in healthy volunteers. Essentially, the duration of the study will be much shorter as compared to previous clinical studies with Lymfactin and CDNF, for example. We expect that we can complete the whole study from first patient in to actually completed data analysis within about half a year.
During the first half of the year, we should have the data completed by the second half of 2023. We have also importantly initiated negotiations with the clinical trial site. This will be a single center study. The site, the CRO and the bioanalytical partner we are now currently negotiating with so that we would be ready to start the study again during the first half of 2023.
Great. Thank you, Henri. Could you elaborate a bit on your biomarker strategy and at what stage could you determine the optimal target population for HER-096?
Well, this is something that we're actively working with. There's of course no rush there as in the phase I-A study will be recruiting healthy volunteers, including an aged cohort for CSF sampling. However, of course, beyond phase I-A, we're currently doing internal work, discussing also with our scientific advisory board on what would be the optimal patient population. I think it's a little bit premature to actually make a strong position there as of now. However, I would like to remind that our CDNF phase I study provided us with some very interesting findings, including some signs of biological response in, for example, LRRK2 G2019S patient. That was one of the subjects in this study. This definitely an area of active work at Herantis.
Great. Given that you have produced preclinical and clinical data with CDNF, how should we think of the development risk with HER-096? What type of conclusions can be drawn between the compound in terms of, for example, safety data?
Yeah. HER-096 is even as it's based on CDNF protein, it's still an individual compound on its own. As with any other compounds, there are significant risks involved in developing a new drug molecule. We can exploit the data that we have obtained with CDNF both on the, let's say, the safety data and then efficacy data, especially from the preclinical settings. That can facilitate the development program. It also to some extent decreases the risks. But of course, drug development is always a high risk, they are high- risk projects, and in that sense, HER-096 is still a high- risk project. Even though, maybe a little bit less with the background with CDNF than if that would be without that, parent molecule understanding that we have.
Great. Thank you. Okay, next question. Can you share your thoughts on the recent progress in the Parkinson's field? For example, anti-a-synuclein targeted antibodies, new findings on biomarkers, etc.?
Henri, you can take this.
Yes. If we start with the immunotherapy side of things, so the alpha-synuclein antibodies. This is of course an approach that has been in development for two decades, starting from Alzheimer's with anti-amyloid antibodies and then moving on to Parkinson's with anti-alpha-synuclein antibodies. I believe throughout this 20 years of development, there has been many times many experts have raised concerns whether this would be sufficient for disease modification. Whether we can actually by lowering the alpha-synuclein levels first in the periphery have an effect in the brain that would be sufficient to actually translating to a clinical effect. It has been debated a lot, and I know there's a lot of experts in the field who think that this approach simply will not be sufficient.
What we've seen in the field in the past 20 years, despite the Biogen approval earlier, it is a challenging approach. I'm personally not very surprised to see that this has been taking so long to have any products approved in this area. On the biomarker side of things, however, I think there's a lot of exciting things happening. There's a lot of new digital biomarkers coming, which I believe, particularly in Parkinson's, will help a lot because the clinical outcome measures have been a challenge. They work well for the symptomatic treatments, but they have been very challenging for disease modification. Also there are issues with objectivity and continuity of the data and so on. Digital biomarkers will play an important role in Parkinson's clinical development in the future.
Also, there has been recently reported that alpha-synuclein PET tracers have now moved forward. This of course, if you again take an analogy from the Alzheimer side of things, the amyloid imaging agents that started coming roughly 15 years ago, they really made a big difference in the field, and I believe that the alpha-synuclein PET tracers will come sooner or later, and that will again fuel our clinical development in Parkinson's disease and facilitate things.
Great. Thank you, Henri. You have mentioned that earlier out-licensing is a possibility within Parkinson's disease. Could you expand a little bit on this, maybe, share some feedback from potential partners, et cetera?
Yes. As I already mentioned, we have had discussions with potential partners over the years. A few years ago when we started the development of the new generation compounds that led to the nomination of HER-096 as the lead compound. The main message that we got from those discussions were that having a molecule that combines the mechanism of action of CDNF with easier routes of administration, such as the subcutaneous administration that we are currently using with HER-096, that would be the package that the potential partner would be especially interested in. As Henri explained, we have just earlier this year or during the first half of this year have been able to in a way have a full pre-clinical package.
Now we are even more strengthening that with the final GLP safety and toxicology data. This package now is much more compelling than we have had before. This has also been very visible [audio distortion] are we able to, or is it— Is that attraction now, can we transform that into a deeper discussion? That to be seen, but I think we are currently in the right place. We have seen overall in the Parkinson's disease space that there has been transactions already in the preclinical stage, so actually in the same place where we are currently. We are there in that sense, and let's see how the discussions proceed.
Great. Thanks, Antti. Next question. Does Herantis already have a granted patent for the HER-096 molecule?
Henri?
The first patents that deal with HER-096 and the library of compounds that we developed around HER-096 were filed in December 2019. We're currently in a stage of PCT extension, which means that we have filed now the applications in a very large number of countries. All these applications are currently being inspected by the patent agency or offices nationally. We're not expecting the grants, the patents to be granted in the next year or two or so. I t will take time, and this is typical for the process.
Great. Thanks, Henri. Just a reminder, if you'd like to ask a question, please type your question into the question section on your dashboard. The last question here for now is, you mentioned that the clinical trial will be a single ascending trial. What would be the next step?
Yeah. Obviously we have been planning ourselves and together with our, let's say, collaborators what kind of a program we could build after the phase I-A. Today we will not comment on any specific details of such potential plans. We will do that later once the data and everything is mature enough for such disclosures.
Okay. Thanks, Antti. As of now, we no longer have any questions in the queue. I think I will turn it back to you, Antti, to have some closing comments.
Yes. Thank you everybody for joining this webinar. I hope that we were able to provide you with the data that helps you understand and follow what we do and how greatly we have progressed over this year. As I said, we are going to join several events during autumn, so you can meet us at Nordic Life Science Days in Malmö in September, in BIO-Europe in Leipzig in October. We will also host an R&D day later this year to give you a little bit more details of the recent development of the R&D side. Thank you for joining today, and I wish you a good day.
With that, we close today's call.