Hello, and welcome to the Nykode Therapeutics Q2 2023 financial results presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may ask a question at any time by typing it into the Ask a Question feature on your screen. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, CEO, Michael Engsig. Please go ahead, sir.
Thank you very much, and warm welcome to everybody joining in for this call. We are once again very happy and pleased to be updating you on what's been going on in Nykode Therapeutics over the last quarter. Just for formalities, again, as usual, we assume you're all familiar with our forward-looking statements. On that note, we'll move quickly forward. I'm pleased to be joined here today by Agnete Fredriksen, our co-founder and Chief Business Officer, as well as Harald Gurvin, our Chief Financial Officer. Together, we'll take you through an update on our business activities and R&D program, as well as the financial results. Quick look at the highlights, and Q2 for 2023 was yet a very busy and successful, and rewarding quarter for us.
Most importantly, of course, we reported the positive trial results from our Phase 2 trial exploring VB10.16. Hold on. Exploring VB10.16 in patients with advanced cervical cancer in combination with atezolizumab. We'll just give you a brief overview of the key results from from those from that reporting later in this call here. We also announced the expansion of our clinical collaboration with Roche into the C-04 trial, where we'll be combining VB10.16 with atezolizumab again in the potential registrational trial C-04 in advanced cervical cancer. The company has this morning reported the financial positions. Again, we have to report that we are well capitalized with a cash position of $174 million at the end of the second quarter.
After the end of the second quarter, we've still been busy and continuing the business activities, so we have received now the approval from the competent authorities in all 8 European countries for the VB-C-03 trial, exploring VB10.16 in combination with Keytruda in PD-L1 positive first-line head and neck cancer. We've also had the clearance from the independent review committee for continuing with the 9 mg dose of VB10.NEO in the VB-N-02 trial, which we are running together with Genentech. They reported no safety concerns, and obviously, that's very important since this constitute the first time that we get the go to continue the enrolling of 9 mg.
Just to remind you all here, we are exploring 9 milligrams in this study on the basis of the very favorable safety profile that we've seen with our VB10.NEO and all other clinical candidates we've so far had in clinic. Our hope is here to explore whether there is additional efficacy to be gained by upping the dose. We're also happy to report that we are appointing Henrik Søndergaard as head of our dedicated autoimmune research. Henrik will be starting with us first of September, again, a testament, a testament to our commitment to really move the autoimmune field forward.
Quick look at the pipeline. Here, again, I just want to emphasize our VB10.16 program, from which we will be seeing quite a number of activities in the near coming time. We do plan to dose the first patients in the C-03 trial in third quarter of this year here. Imminently, as I mentioned, we have received all the approvals from the competent authorities. We also plan to initiate the C-04 trial, our potential registrational trial and next step in cervical cancer program in fourth quarter 2023.
Again, pointing down to the bottom of this slide, our autoimmune program, we have indicated, and, and we plan to continue with that, that we'll be updating the market on the science and the progress on our autoimmune programs in this quarter, so imminently. With those words, I'm going to hand over to Agnete to take us through an update on the R&D side.
Thank you, Michael. So first, we'll focus on VB 10.16 and the progress we are seeing in the VB 1016 developments here at Nykode. As, yeah, a brief review, VB 1016 is an off-the-shelf therapeutic cancer DNA vaccine targeting HPV-16 induced malignancies. This is the most prevalent oncogenic HPV strain that we are targeting with this product. We're using two full-length proteins from HPV-16 as the antigens in the vaccine. It's both E7 and E6 that are constitutively expressed in cancer cells in patients with an HPV-driven disease. Importantly, this is one of the products that is still wholly owned by Nykode, and we have all the rights for VB 1016 still.
If you look at the right, you see the Vaccibody structure with this particular targeting unit that we're using among many products, giving us this unique immune response profile against the antigens that is included at the other end of the molecule, both E7 and E6, as I mentioned. If you go to the next slide, Michael, this is giving you an overview of the ongoing activities with VB10.16. As you see, now working with multiple different trials in parallel, finalizing, finalizing the C-02. As you know, we reported data in this quarter that we're now reporting from, which was very promising.
We have said as the next step that we will also update further on updated longer follow-up survival data from these patients in first quarter 2024. C-03 is the trial that we are very much looking forward to get fully started. Importantly here, this will be the first time we will test VB10.16 with up to 9 mg. The previous trials has focused on 3 mg dose, and it will be in PD-L1 positive patients in combination with Keytruda, which is an anti-PD-1. It will be in first-line patients.
The C-04 trial, which will be a very important trial for Nykode, which has potential for being a registrational trial, is still on track to be started Q4 this year, in combination with Atezolizumab. If you can go to the next slide. Just briefly reviewing why VB10.16 now will have a lot of focus at Nykode in the coming period. We were extremely enthusiastic about the results that we achieved in the VB-C-02 trial reported back in April, particularly with the focus here on the PD-L1 positive patients. We achieved an ORR of 29% PFS, median PFS of 6.3 months, and median overall survival not reached.
At that time point, estimated to be at least 25 months. We are happy to also share today that the median overall survival has not yet been reached as the newest look at the data. Further details on what that will constitute as the end result is still planned for first quarter next year. As you see, for all these parameters, we are looking at a doubling to up to three times higher efficacy results compared to what we see with checkpoint inhibitors. Importantly, we also included Tisotumab, Vedotin, or Tivdak here to the right, with a different modality, but still importantly, here in the same range with a much shorter overall survivals in the data reported to date.
We continue to, to focus on this long-term durability of responses that is helping us achieving a long survival for the patients. If we focus particularly in the data analysis we did in the second quarter on the subpopulation, was actually constituting 16 patients that are PD-L1 positive and have received only 1 prior line of systemic anti, anti-cancer therapy. Importantly, we enrolled in this trial, patients with 1-5 prior lines of systemic anti-cancer therapy. We're looking at those with only 1. We actually also observe better efficacy data across all endpoints, with up to 40% ORR, 80% DCR, 30% complete responses. Here, actually, the PFS increases to 16.9 months. Obviously, overall survival not, not yet reached in this subpopulation as well.
Why do we highlight this? It's basically because the future trials that we plan, both the C-04 trial will be in PD-L1 positive patients, and it will be in patients with only 1 prior line of systemic anti-cancer therapy. Although the first line treatment has changed, and we include Keytruda in that trial. We obviously see that we have the best efficacy in patients that have not had to undergo multiple lines of previous therapy before receiving VB10.16. Also, as I said, importantly, the C-03 trial is in PD-L1 positive patients, that are actually also in PD-L1 positive patients, and these are actually first-line patients, so have not received any prior line of systemic anti-cancer therapy.
Which means we're moving even one step further up here, focusing on still advanced cancer patients, but not the patients that have undergone multiple previous lines. I think we can move forward. For VB10.NEO, which is an important asset for Nykode, fully out licensed to Genentech Roche. We believe this technology has a potential to be the leading technology for individualized cancer neoantigen immunotherapy. We have, by this product, developed very strong in-house bioinformatics competences and also developed our own proprietary neoantigen selection method. It was trained on our own microdata, and we have seen the immune responses over the last year, giving us comfort that we also in the clinic can generate this unique and also broad CD8-dominated immune responses.
We actually focus in the neoepitope selection on clonal and clinically relevant epitopes before solely looking at immunogenicity, which I think is important as a second qualifier for the, the, the high number of patients, and the high number of new epitopes that we found to be immunogenic in the study. Importantly here, also saw that high-quality immunogenic neoepitopes correlate with clinical responses. As a DNA vaccine, we believe that's a huge advantage in the field of individualized, even more than anywhere else. DNA plasmid manufacturing is an intermediate in mRNA and viral vector productions, as well, by definition, be more rapid and cost-effective and a robust method. So far, we've achieved 100% manufacturing success rate for those patients where we find a biopsy with enough mutations. It's also a very safe and well-tolerated platform.
A good starting point for us to move forward in the individualized cancer neoantigen space. Also now, with additional positive sentiment for individualized cancer vaccines in the community. We go to the next. For that, VB10.NEO, as it stands today, we have two trials, N-01 and N-02, where both are in advanced cancer setting, with multiple different indications included in both trials. Important difference from the N-01 to N-02 trial is here also a dose escalation up to 9 mg. We also today were able to share that we see that the 9 mg dose also seems to not give us any safety concerns, and we have not observed any dose-limiting toxicity.
This is actually the first time that the Vaccibody DNA platform has been tested in the clinic with the 9 mg dose. The reason is because we have seen no safety concern with the 3 mg dose. We see very promising efficacy with the 3 mg dose. So there could also be untapped efficacy that we don't want to be see left on the table. That will be exciting to follow in the future. We can move to the next slide. For additional highlights from our research and development activities and oncology, we are still on track to select the new development candidate from our own internal research in Q4 2023, and looking forward to expand the pipeline in the future with additional wholly owned products.
We also have told you previously that we have started to test our platform technology and tweak it so that it can induce tolerance against specific antigens for application to
I think you can sense that we are doubling down a bit on, on, on autoimmunity. We believe it has a huge, huge potential in, in the future, and we may have a competitive edge. I think that's it from me.
Thank you very much, Maria. I'm going to hand over to Harald to take us through the financials.
Thank you, Michael. Nykode is financially well positioned to execute the company's strategy over the next years with a cash position of $104 million at quarter end. As previously stated, we continue to explore and prepare for a potential listing on the Nasdaq Global Market in the U.S. We can unfortunately not give any guidance on timing, which will depend, amongst others, on market conditions. Looking at the income statement, we reported revenues of $5 million in the second quarter and $8.1 million for the first half, up from $3.1 billion and $3.8 billion for the same period in 2022. Our other income represents government grants from SkatteFUNN and the Research Council of Norway, where we had a total of three projects running.
Looking at employee benefit expenses and other operating expenses, we have been ramping up both the organization and our research and development activities over the last years, resulting in increased expenses. Please note that the first half of 2022 includes the non-cash reduction of $6.6 million in employee benefit expenses relating to Social Security cost accrual on share-based payment. In line with the increased interest rate levels, finance income has increased, mainly due to increase in interest income. Overall, we recorded a net loss of $ 9.2 million for the second quarter and $ 19.6 million for the first half of 2023. Just quickly on the balance sheet also, as stated, we have a strong cash position of $ 174 million at quarter end.
We'll see a reduction in the trade receivables in the year-end due to receipt of the NOK 2.5 million milestone under the Genentech agreement in the first quarter. Moving on to equity and liabilities, we have a total equity of NOK 140 million, which represents a strong equity ratio of 74%. With that, I will give the word back to Michael.
Thank you very much, Harald. Moving on to the outlook, as we mentioned before, we are enthusiastically looking forward to further goals and achievements for Nykode Therapeutics going into the second half year of this year here. Most eminently with the start-up of C-03, our expansion of VB10.16 program into head and neck. As I mentioned earlier in this call here, we expect to dose the first patient in this trial in the third quarter. We are also on track to start up the potential registrational trial, VB-C-04, in the VB10.16 program in the fourth quarter. We have earlier been guiding that we are in the last parts of the discussion with FDA on the trial design.
We look forward to be able to update you both on the trial design and our thinking around the development plan for VB10.16 going forward, including also, how we see opportunities of this program going into earlier stage cancers. We've also indicated that we will be updating and putting a, a name to the next internal program moving into the development phase towards the fourth quarter of this year. That's the results of activities in our own discovery division. Obviously, we are looking very much forward to that part also. We've said we will be updating on the survival data from the VB-C-02 trial.
The trial that we did report the final data from in April this year will be reporting up follow-up data in first quarter next year. Also excitingly, we will be updating the market on the progress in our Ultraviu program during the third quarter, so during the month of September. We are very excited to invite you all to a Capital Markets Day. We'll be hosting, we'll be hosting the U.S.-based one on the 20th of September in New York. More details will follow on that.
We are very happy to, to announcing that we'll also be inviting a key opinion leader within the field of cervical cancer, to come and present the perspective, the outside perspective of the field and Nykode's VB10.16 program in that context. We will also be hosting a secondary Capital Markets Day in Oslo in the following week on September 27th. Unfortunately, that will not include the key opinion leader, but otherwise, the program will be the same. We hope to see as many of you as possible for, for those two meetings. With those words, I'm going to hand the words back to the operator to take us through the questions.
Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please type it into the Ask a Question feature on your screen. One moment please, while we poll for questions. Our first question today is coming from Gonzalo Artiach, from ABG Sundal Collier in Stockholm. The question reads: Yesterday, the U.S. Department of Health and Human Services awarded more than $1.4 billion for a project to support the development of new ways to protect against COVID-19 new variants. One of the goals is to develop more effective and longer-lasting coronavirus vaccines. I was wondering if you could give us how your COVID-19 vaccines fit in this, given the VB10.2210 data that you released in September 2022, showing induced protection against conserved antigens outside spike, potentially providing protection against new variants of concern.
Thank you very much, Gonzalo. I think my initial response is, it's tempting to react to this one here, and we certainly also understand the background of your question. No doubt that there might be opportunities here. We strongly believe that the long-term success of a company like Nykode, relies on our ability to really prioritize our resources and focus on the activities that we believe generates the most effective shareholder value for the shareholders. On that line, we are currently focused entirely on our oncology pipeline, our partnerships, and as we've mentioned here, the new activities in the autoimmune disease setting. We are for now, sticking with our decision not to continue the development of the VB10, sorry, VB2210 program without a partner.
We will continue the efforts to identify a partner, but as I said, before, we have identified a partner, we will not be doing more development in, in this program.
Thank you. Our next question today is coming from Geir Holum, from DNB Markets in Oslo, and it's in several parts, so I'll ask them one at a time. Our first question is: How many people will be in the new tolerance research group led by Henrik Søndergaard?
Good question, Geir. Thanks a lot. This is always a, a bit of a tricky question to answer in, in a simple way when you're working in a matrix organization like our research department is. The most simple way to put it up is we will have somewhere between 10 to 15 people engaged throughout the research organization in the activities related to the autoimmune disease field, including, of course, our Henrik Søndergaard, our new head of the tolerance program.
Our next question from Geir Holum, from DNB Markets in Oslo: Given the technology's potential, are you also considering developing therapies for patients with rare diseases? Both Moderna and BioNTech have made such efforts, it's often highlighted that therapies addressing such diseases have a relatively shorter path to market.
Yes. Again, thanks for the question, Geir, if we understand the background for the question, I'm gonna answer it in two ways. The first one is the rationale that drives Moderna and BioNTech to look at this especially from a technology point of view, would certainly also apply to Nykode. We have the same conditions and circumstances that would actually allow us to play in that field. However, as I mentioned under the first question from Gonzalo, we are right now set in a disciplined focus on our priorities, our priorities is, as I said, our partnerships, our oncology program with the VB10. 16, internal discovery and oncology at our efforts in the autoimmune disease area.
So we for now, do not have any plans to expand into the field of rare diseases, but, but I do see the, the opportunity space that you bring up here. We can take the next question.
Sure. The next follow-up from Geir Holum, from DNB Markets in Oslo. To what extent is Nykode using AI or artificial intelligence in your drug discovery efforts?
Yeah, I, I think that's a good question, and as I alluded to during the R&D update, we started to build an AI group with internal competencies within this field quite early, also because of the use of this know-how in the neoepitope selection method.
I think that gave us a head start for having internal competence and using this competence not just to predict new epitopes for the individualized space, but we also have that knowledge now for exploring, for other drug discovery, for understanding how we best design new vaccines, but also how we capture and analyze, and take the advantage of all the data that we generate in or have generated so far, and make sure we learn the most out of that for future discovery efforts. In principle, I think we are approximately 10-15 FTEs as well, in the group working with different aspects of AI in Nykode. Next question.
Our next follow-up is... Just wanna make sure this next follow-up has come from Geir Holum, from DNB Markets in Oslo. The partnership with Adaptive is no longer mentioned in your report, and there's also limited signs of an active partnership looking at Adaptive's material. Following the pause efforts with SARS-CoV-2, is the partnership still active, and if so, in what way?
Yeah, I think due to the fact that we have announced that, on the back of the positive data we've seen in oncology and the need to focus in oncology, and also now with autoimmunity, where we believe we have an interesting technological competitive dimension and a very interesting future, we decided to not invest further in the development of the SARS-CoV-2 vaccine that we did together with Adaptive in-house, and rather focus on having this available for potential partners that would like to take a T-cell-based vaccine into further development. Obviously, that is the simple reason why you don't sometimes see it in the report anymore. Obviously, we still have a relationship with Adaptive.
We're working with Adaptive on, on multiple different aspects, including a lot of different analysis of the data that we are generating in multiple trials.
Thank you. Our next question is coming from Sebastian van der Schoot, from Van Lanschot Kempen in Amsterdam. Regarding the potential registrational study in cervical cancer, can you go over your, over your thinking on how the implementation of Keytruda in the 1L setting may impact the efficacy results as seen on C-02?
... Thank you very much, Sebastian, for, for that question. Let's see if, if I catch your thinking on, on this one here. The VB-C-02 data showed us several things. In addition to, to the product once again being very well tolerated, it also showed us a compelling overall response rate in, in the patients, in particular, the patients that were PD-L1 positive, and in particular, the patients that had only received one prior line of treatment. It also showed a long and durable response, both in terms of, of survival, but, but also in terms of immune responses. These factors together do lead us to believe that this, this product have a, a very competitive, competitive edge going into the earlier stages, including, by the way, also adjuvant setting.
Therefore, we also do think that moving it, first line in patients that are refractory to Keytruda, it will have the, the ability to provide benefit to these type of patients. I don't think we, and I'm confident the regulators also do not expect, expect to see the same level of objective response rates that we saw in the VB-C-02 trial. And we don't think that is necessary in this patient setting here. Obviously, you will see a different response rate when you take this product into patients that are checkpoint inhibitor refractory. I think that is fully in line with, with our own and the regulators' expectations, and will not, as such, provide any hindrance for, for the regulatory strategy that we have. We can take the next question.
Yes, there is a follow-up from Sebastian van der Schoot, from Van Lanschot Kempen in Amsterdam. Also, on the VB-C-04 trial, do you anticipate that a potential registration can be based on ORR alone or will require durability data?
Again, thank you very much, Sebastian. Here we are now, of course, working on the various scenarios in front of us. The base case scenario for our regulatory strategy is to base the accelerated approval on the ORR data alone. Should we require durability data, it's merely a matter of extending the trial to include these measurements also. The base case scenario in our planning is built on the assumption that we'll be able to take the registration forward with ORR.
By the way, it's worthwhile noticing that in our dialogues with the regulators in the U.S., they certainly have given a very clear signal that in the end, approval of a product in this segment, which still has a very high unmet medical need, will not be based on one parameter. It will be based on the totality, which includes also the safety profile, compared to the competitive alternatives. That's where we think we have a very, very good profile as well as the durability.
Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments.
Thank you very much, Kevin, and thank you very much to everybody dialing in to, to our call this afternoon. Wish you a continued good day, and we look forward to see as many as you of you as possible to one of our two Capital Markets Day in either New York or in Oslo. Thank you very much.
Thank you. That does conclude today's webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.