Good afternoon, everyone, and welcome to Lytix Biopharma's Q3 report presentation, where we will present the company's latest highlights and events. My name is Øystein Rekdal, and I'm the CEO and Co-Founder of Lytix Biopharma. Today, I'm joined by Gjest Breistein, our CFO, Graeme Currie, our Chief Development Officer, and Ole Peter Nordby, our Head of Investor Relation. As a reminder, today's presentation is being recorded and will be available on our website later today. There will also be a Q&A session, and to ask question, please follow the instruction via the webcast platform. Before we go into the events of the third quarter, I would like to run through a couple of slides that describe the core elements of our technology and how we fit in the immuno-oncology landscape. We are a clinical-stage biopharma company with ongoing phase II studies.
We own a unique oncolytic technology platform that has significant potential and a broad applicability, meaning that our platform has the potential to be used in a broad range of cancer. The technology has been validated by international experts within the immuno-oncology space. Included is the Nobel Prize winner Jim Allison and the founder of modern immunotherapy, Jim Allison, who sits on our Advisory Board. The technology has also been commercially validated through our licensing deal with Verrica Pharmaceuticals. Our molecules can address several major challenges within today's cancer therapy, including tumor heterogeneity, which describes the fact that solid tumors consist of different cancer cells with different mutations, making it difficult to treat the disease, cold tumors, which means low numbers of T-cells in the patient's tumors, and drug resistance.
Our solution is based on our molecule's unique ability to induce activation of tumor-specific T cells, which could provide a unique way to increase the number of cancer patients responding to immune checkpoint inhibitors. Looking at the current immuno-oncology landscape, the major immunotherapies can be classified into four broad classes, cancer vaccine, oncolytic viruses, cell therapies, and of course, checkpoint inhibitors. Our oncolytic molecules do not fit inside any of these boxes. They represent a new vaccination principle that addresses tumor heterogeneity and differ from oncolytic viruses. Based on their properties, these molecule can serve as an ideal combination partner for cell therapies and immune checkpoint inhibitors. Let's now move on to the highlights for the third quarter of 2022. Our ATLAS-IT-05 study is evaluating LTX-315 in combination with the checkpoint inhibitor pembrolizumab in melanoma patients.
In September, we were pleased to announce that we have received regulatory approval to expand the study to Europe, more specifically to Norway, France, and Spain. Sites in all three countries opened during the beginning of Q4, and this will complete patient enrollment in early 2023. Verrica Pharmaceuticals has licensed LTX-315 for its phase II study in basal cell carcinoma, the most common type of skin cancer. They continue to progress and plan to conclude the first part of the study in the first quarter of 2023. When it comes to a second-generation molecule, LTX-401, we have made good progress with our preparation to initiate a phase I study for patient with liver cancer. Outside of clinical activity, we appointed Stephen Worsley as Chief Business Officer, which I'll come back to a bit later in the presentation.
With regards to post-periodic events, Lytix presented compelling new data at the Annual Society of Immunotherapy of Cancer Conference last week, one of the world's leading organizations dedicated to advancing the science and application of cancer immunotherapy. The data were generated in collaboration with several renowned cancer institution in U.S. and describe how LTX-315 treatment activates dendritic cells through several distinct pathways. Dendritic cells are a type of immune cells that are critical for a proper priming of tumor-specific T cells. The data also further established a mechanism by which LTX-315 both induces the release of tumor antigens and dendritic cell activation. Both are critical steps for generating tumor-specific T cell responses. These are really exciting data, and we were pleased to showcase this news at the largest International Immuno-oncology Conference.
Graeme will present more details on the ATLAS-IT-04 study and the opening of European sites. We also completed a clinical study report for ATLAS-IT-04 study, where LTX-315 was evaluated in combination with adoptive T-cell therapy and achieved proof of concept by demonstrating clinical benefit in heavily pretreated sarcoma patients. This take us to the clinical and operational update for the quarter, which I will hand over to Graeme Currie, our Chief Development Officer.
Thank you, Øystein. Next slide, please.
Sorry.
As part of our drive to move forward the ATLAS-IT-05 study, we completed a regulatory application through the new centralized clinical trial application system in Europe. In Q3, the clinical trial application was approved under the centralized regulation, and we are actively opening sites in Norway, Spain, and France. These sites are highly recognized for their expertise in researching new therapies for advanced melanoma, and in particular, they are focused on delivering intratumoral therapies. We believe their expertise will enhance both the number of patients enrolled but also the quality of our study. The goal of engaging these sites was to secure patient enrollment and to aim to complete recruitment in early 2023.
Just as a reminder, the primary objective of this study is to document whether LTX-315, when administered to patients who have previously failed a checkpoint inhibitor, are able to produce responses. These patients have advanced malignant melanoma. You could move to the next slide, please. Verrica in-licensed Lytix Biopharma's LTX-315 for certain skin cancer types in August 2020. The licensing deal implies potential future milestones payments of US dollar $111 million in addition to royalty payments from low to mid-teen digits. Verrica intends to focus on, initially, on basal cell carcinoma and squamous cell carcinoma as their lead indications for development. Basal cell carcinoma is the most common malignancy in humans and is estimated that there's 5.4 million cases of basal cell and cutaneous squamous cell carcinomas annually in the U.S.
As mentioned, the US IND for the treatment of basal cell carcinoma was accepted by the FDA in November. Verrica are progressing forward with this indication. As Øystein mentioned previously, the study has begun, and the first part of the enrollment into the study is expected to complete in Q1 2023. The Lytix and Verrica teams are working closely in close collaboration to ensure optimal development. Next slide, please. We'd previously reported that data was obtained from a study combining LTX-315 with adoptive T-cell therapy. In this quarter, the clinical study report was completed.
This is a phase II proof of concept study that showed that LTX-315 combined with ACT was able to stabilize disease in heavily pretreated sarcoma patients who entered the study with progressive disease at baseline. This data was presented at a scientific conference in the summer, and a manuscript is under preparation, which will be submitted to a peer review journal. Lytix is currently exploring a number of strategic options to continue development of this combination realm with ACT therapy. Move to the next slide, Øystein. Lytix continues to look to develop molecules based on the underlying technology. A second-generation oncolytic small molecule, LTX-401, is currently moving towards clinical development.
The focus of this treatment with LTX-401 is more deep-seated lesions, and in particular, there's an interest based on preclinical data in liver cancer. LTX-401 may solve a high unmet medical need in patients who have visceral lesions, including patients that have metastases that have spread to the liver or, as I mentioned, liver cancer or hepatocellular carcinoma. Preclinical results have documented very promising anticancer efficacy with a safety profile that looks very encouraging. We have started IND-enabling activities and plan to initiate a phase I trial next year after completing the necessary regulatory applications. I'll now hand back to Øystein.
Thank you, Graeme. As you can see from our pipeline, a lot of activities are happening on the R&D front, which we believe will generate solid clinical data over time. We have truly a unique technology engine that can deliver several drug candidates, all with significant commercial potential in the cancer therapy area. What also makes these molecules so exciting is that they can be effective both as a standalone therapy and in combination therapy with other types of immunotherapies to improve the effectiveness of the treatment. Our lead candidate is currently being evaluated in two phase II studies in the U.S. and Europe as a monotherapy and a combination therapy in basal cell carcinoma and melanoma respectively. In addition, we recently completed a phase II study with the LTX-315 in combination with adoptive T-cell therapy.
We are also working on an IND application for our second-generation molecule LTX-401, and when approved, we will initiate the phase I study in patients with liver cancer as early as next year. Lytix has also out-licensed a third oncolytic molecule to a US-based veterinary company exploring its effectiveness for cancer in pets. Preparing for a future and broadening our pipeline, we have also several additional molecules in the discovery phase. As mentioned earlier today, we are pleased to welcome Stephen Worsley as Chief Business Officer. His main areas of responsibilities will be to focus on market opportunities and actively place our unique technology in front of key stakeholders in the immuno-oncology space to drive partnering activities and ultimately to drive business growth. He brings 25 years of experience to Lytix and has led negotiation of award-winning technology and product partnership for leading therapeutic companies.
You will be seeing more of him moving forward. I will now hand it over to our CFO, Gjest, who will provide you with a financial update.
Thank you, Øystein. In the third quarter of 2022 , Lytix made good progress according to our development plan. Our licensing agreement with Verrico Pharmaceuticals continue to generate income as Lytix delivers a supply of LTX- 315 to Verico's development program. In Q3, this led to, uh, an income of one point four million, and this is the first time, Lytix has a commercial agreement with, uh, a third party. The re- the remaining operating income for the period, uh, stems from public grants such as the SkatteFUNN R&D tax incentive scheme and the Oslo Regional Research Fund. Total operating income for the period, um, was in line with, uh, last year. And as a drug development company, R&D efforts are representing our majority. The ATLAS-IT-05 study was already ongoing in the U.S., uh, at MD Anderson Cancer Center in Texas and the Mount Sinai Hospital in New York.
In the third quarter, we started the process of opening additional sites in three European countries, Norway, France, and Spain. Recently, sites in all these three countries has been opened and are ready to recruit patients. We also continued the progress on the IND, aiming to open a phase I study in next year with LTX-401. Overall, we have a lean organization with a strong focus on being fiscally responsible while simultaneously pushing our development program forward. For Lytix, clinical data is the most critical area of value creation. Therefore, most of our resources are invested directly into clinical trials, which will provide valuable information and data to support the growth of the company and the advancement of our technology engine and product candidates.
Our cash position, including short-term financial investments, amounted to approximately NOK 772 million at the end of the quarter, compared to NOK 209 million at the same time last year. In Q3, we placed about NOK 50 million in a liquidity fund, and that explains the increase in short-term financial investments. Now I will hand it back to Øystein.
Thank you, Gjest. We have run through a lot of information today, but there are key elements that we would like to take with you. These are exciting time for Lytix with one foot in the U.S. and the other in Europe. This allows us to get access to knowledge and experience from the two of our most important markets and to expand our R&D efforts across two continents. With that, the key objective moving forward is drive enrollment in the ATLAS-IT-05 phase II trial towards completion. Continue to support Verrica Pharmaceuticals phase I with the supply of LTX-315 and with all knowledge and experience of the technology. To continue the ongoing IND process to bring LTX-401 into the clinic.
We will also continue to strengthen our position in the immuno-oncology space. We'll do this by presenting our data at scientific, clinical, and business congresses worldwide, build strong network and relationship within the industry, continue to bolster our team through the recruitment of highly experienced colleagues. The result of this work can be represented by the image on the right-hand side of this slide. Here you see the effect of a sarcoma patient with lung metastasis who have failed earlier treatment. The patient then received local treatment with LTX-315 in a tumor lesion in the lower back. This resulted in the patient experiencing shrinkage of tumor lesion that were treated, but also lesions that were not treated. On the image, you see a non-treated tumor in the lung that was shrunk by 63%.
We have observed similar systemic anticancer effects in a substantial number of cancer patients after local treatment with LTX-315 monotherapy. This is why we are highly motivated to move forward and feel confident about our molecules making differences for the majority of cancer patients who still face few or ineffective treatment options. Normally, this would be the last slide before we jump to the Q&A session. Today, we would like to draw your attention to our Capital Markets Day, which is taking place Tuesday, November 22nd at Hotel Continental in Oslo. I will now hand it over to Ole Peter, who will take you through the agenda for the Capital Markets Day.
Thank you, Øystein. As we have demonstrated throughout today's presentations, many exciting developments are taking place at Lytix, both in the clinic and from a corporate perspective with new hires. This is why we would like to invite you all to attend our Capital Markets Day next week. On Tuesday, November the 22nd, we will have a closer look at the core of the Lytix technology and its versatility, as well as some selected parts of the clinical development program. As part of this event, you will hear from Øystein Rekdal, our Chief Executive Officer, as well as from Stephen Worsley, our newly appointed Chief Business Officer. They will discuss the technology, but also the commercial potential for our oncolytic molecules. You will also hear from external experts outside of Lytix.
Niels Junker, who is Chief Physician at Herlev Hospital in Denmark, will visit us. Dr. Junker was the investigator of the ATLAS-IT-04 study we recently completed. He will explain how LTX-315 was applied in the context of adoptive T-cell therapy, and also discuss the encouraging results and proof of concept from that study. Aurélien Marabelle is Professor of Clinical Immunology at Institut Gustave Roussy in Paris at the University of Paris. It is a great pleasure to present Professor Marabelle as a world leading expert in intratumoral therapy and liver cancers. He will discuss how oncolytic molecules fit into the therapeutic approaches for liver cancers, and also represent a highly needed new opportunity for clinicians and patients worldwide. This event will, as I mentioned, take place at Hotel Continental in person here in Oslo.
It may also be followed by webcast. Please remember to register at our website for the event by clicking through to the events section at our investor page. We are now ready to move into the Q&A session, and I ask the team to prepare for the questions. We have a first question here from the webcast, and it goes for you, Graeme. Who are the highly recognized sites with expertise within intratumoral immunotherapy in Europe you are opening? Please.
On the unmute.
Unmute.
Apologies. I was on mute.
Thank you, Ole Peter.
Thank you, Ole Peter. We have engaged leading cancer centers in France, Norway, and Spain. Among those, as you've mentioned, Institut Gustave Roussy, based in Paris. We have a hospital in the south of France in Lyon. The University of Navarra, another well-known location, that have studied a lot of intratumoral therapies. Patient recruitment in Norway will take place at Oslo University Hospital, Radiumhospitalet, and Ahus Hospital. We are looking forward to presenting an update on progress as soon as we get these sites really getting active and recruiting patients.
Thank you, Graeme.
Thank you.
We have a question regarding the ATLAS-IT-05 study, and it goes as follows. Can you remind us if there are any interim data expected from this study? Also, when would the final results be expected? Would you answer that?
Yes.
Yes.
Yeah. Happy to, Ole Peter. As I'm sure you understand, it's difficult to predict an exact date for when interim data would be available. The study is an open-label study, and we do expect that we will report interim data within 2023.
Well, thank you. For you, Gjest, we have a question here. What is your expected cash runway, and do you get to the phase II completion?
We said when we went to Euronext Growth that the capital raised there then would last approximately two years and be enough to fund the ATLAS-IT-05 study. The ATLAS-IT-05 study has been delayed as we have communicated, meaning that we haven't used as much capital at this time as earlier expected. We still have quite significant capital in the bank, and when we will raise capital next time, that's up to the board to consider.
Thank you. There is a question here also regarding the adoptive T-cell therapy application and the like. Will there be further development of LTX-315 with adoptive T-cell therapy?
Yeah. We are quite satisfied with the data we have seen from the ATLAS-IT-04 study with LTX-315 in combination with the patient's own T-cells. What we plan to do now is to really look into the companies that are working with cell therapies. This data we got is confirming that patient may benefit from a combination of LTX-315 to generate the right T-cells and adoptive T-cell therapy to take out the T-cells and produce them to a much high number before they are taking back. We look into it, and that's also one task for our new CBO, Stephen Worsley, who will look into this field within the industry of immunotherapy and cancer therapy.
We have a question regarding Stephen Worsley as the CBO of the company. When can we expect to see results from his efforts announced?
Stephen Worsley, we are very pleased to have him on board. We are already seeing him using his experience and network in the immuno-oncology field. He has a lot of good network in U.S. He's located in U.S. We already see he's starting to approaching companies to, in a way, make or get us on the radar. So far it seems that he already is in a good progress with that. Of course, to see when we will have concrete results of that is very difficult to say. That maybe go along with the data we are waiting for next year from the ATLAS-IT-05 study.
To something else, different. The question goes as this. It is not easy to understand the significance of the data you presented at SITC earlier this month. The press release leaves the impression that you have spotted possibilities for new applications of LTX-315, but that would not be in ACT.
That's right. These results really confirm the versatility and applicability of our technology and opens up for additional combination therapies. Again, it's early to say which type of opportunities, but we are really looking into this and we are very confident with the data we have obtained with the NCI, National Cancer Institute, and Weill Cornell in U.S. on this data. Well received at the SITC conference. We are really now starting to look into what other opportunities, which we all, of course, have some ideas on. We will come back to that, what sort of combinations, opportunities, and eventually partnership that can give us.
There's a final question here for you, Graeme. Will you elaborate on why you expect opening sites in Europe will boost the recruitment to the study?
Yes. Happy to address that. We've been running the current trial with a small number of studies in the U.S. We are engaging cancer centers focused on patients with advanced melanoma. The number of sites that we've opened in the three countries that we've raised will certainly allow the opportunity to review more patients and allow us to enhance our recruitment activity. We're confident that these sites will allow the study to complete in early 2023.
Well, that should be all. No further questions. Thank you all.
Thank you.
Thank you.
Thank you.