Good morning and welcome. I'm Martin Olin, the CEO of BerGenBio. I'm pleased to provide you with our Q2 2023 report. Just remind the audience about the formalities. BerGenBio, in a nutshell, we consider ourselves to be the world leader in AXL biology, and we know that AXL biology is important. It's known to play a key role in the progression of several diseases, including cancer, respiratory diseases, and fibrosis. We have two proprietary, which means our own, clinical-stage program, Bemcentinib, a small molecule, which is our lead program, and tilvestamab, a monoclonal antibody. In multiple phase II trials, we have shown that the relevance of Bemcentinib is quite important as it confers to clinical benefits in non-small cell lung cancer, in AML, in MDS, and myeloma.
The data all points to the same direction, that Bemcentinib actually leads to an increased progression-free survival, but also overall survival for these patients across these diseases. This is quite interesting. We are, however, focusing the development of Bemcentinib in the frontline treatment of non-small cell lung cancer, which is one of the largest cancer killers in the world, where we have a strong competitive position. We have a significant market opportunity, and we have, in our mind, very supportive, both preclinical but also clinical data to support this focus. There is an opportunity or opportunities beyond the first-line setting, and that's being pursued through partnering activities.
We recently closed NOK 250 million, or raised NOK 250 million in a rights issue, which combined with our recent announced streamline of the organization in this focused strategy, will support our activities throughout 2024, and potentially into the second half of 25, if all warrants that were issued in connection with the rights issue are exercised. We believe that our planned access activities hold the potential to unlock significant value and provide guidance for the pivotal, i.e., the final clinical trials in one of the last largest cancer indications in the world. There is additional value potential from the out-licensing activities of tilvestamab. We've discontinued the development ourself and are looking for a partner to progress that. We also have an existing out-license program with ADC Therapeutics, which may also yield milestone and royalties.
Let's focus in on Bemcentinib, our lead molecule. We believe that it offers a very attractive opportunity to address a significant unmet medical need in non-small cell lung cancer. I think it's quite clear for everyone that the treatment of non-small cell lung cancer today, despite the progression and the advancement from checkpoint inhibition, is still representing a significant unmet medical need. In fact, only 50% of the patients actually benefit from today's standard of care. Keep in mind that this affects almost 2 million people every year, so it's a very, very significant disease. If we try to dissect who is responding and who is not responding, we have actionable mutations. These are mutations where there is a treatment available, and we have also the patients who respond well.
They have a PD-1 high expression, so they respond very well to checkpoint inhibition. About 50% of the patients have a very compromised immune system, and they don't respond very well pretty much to anything. This is a quite devastating situation for the patients. bemcentinib, which is our lead compound, is a highly differentiated AXL inhibitor. It's highly selective for AXL, which is important, and we know that it's a because AXL is a key driver of chemo and immunoresistance. Unlike most AXL inhibitors, ours is very selective for AXL, which means that it doesn't target any other molecules or pathways. We believe that selectivity provides a better inhibition for potency, but also fewer off-target adverse events, as we have also seen in our clinical studies.
It concentrates very well in the lung, actually 40-fold over normal tissue, which, which is, if you think about it, quite neat because we are targeting a lung disease. It also crosses the blood-brain barrier, which is important because a lot of these patients, unfortunately, have metastasis in the brain. We've shown that it combines very well with chemotherapy, but also checkpoint inhibition, which is crucial because this is the standard of care in first line, but also second-line non-small cell lung cancer. Quite an important attribute. We have received two Fast Track designations from the FDA in this in a specific disease, which is non-small cell lung cancer, patients that have a mutation in a gene called STK11, where there is no treatment available for these patients today. We have an extensive patent portfolio, and that provides us with protection until 2042.
Why is it that we believe that bemcentinib actually works in this setting? Well, this is taking the clinical data and putting it into the scientific rationale behind it. We know that bemcentinib modulates or remodulates the immune system, which is quite important because this is needed for a patient to respond to checkpoint inhibition and/or chemotherapy. We know that AXL inhibition reduces an EMT immune invasion, which is used by the cancer cells to prevent themselves from being killed by the therapy. It also enhances the MHC-1 antigen presentation, which is also a key driver in the progression of cancer, and it reduces the DNA damage repair. Enhances self death. To the right-hand side, and very importantly, it also reactivates the innate immune system that otherwise doesn't work well for these patients.
In totality, these four principles of mechanism of action are remodulating the immune system, is translating into very interesting clinical data for patients that otherwise doesn't respond well. As I said, we've done multiple trials, and the one that I will home in today is in non-small cell lung cancer. We've treated more than 100 patients in second line, non-small cell lung cancer, where we have used the AXL expression level, i.e. What's the level of AXL expression in the tumor or in the immune cells that works together? It's very clear that once we home in on that population, the patients have a significant benefit from the combination of our drug and pembrolizumab or Keytruda, which is the marketed checkpoint inhibitor by Merck.
We've also done a detailed predefined Kaplan-Meier analysis for the RAD-18-008 data, which is the study I referred to. That shows that, very interestingly, that there might also be other hard-to-treat mutations that actually respond equally well to the combination of bemcentinib and pembrolizumab. This is actually really encouraging. This is just a snapshot of the study, the RAD-18-008 study that we have previously reported. I won't spend too much time on it, other than this is first-line patients who have progressed on prior treatment. They either, they either received chemo, checkpoint inhibition, or the combination of the two, and they have progressed, i.e., they no longer respond. We have treated those patients, and the outcome is very encouraging.
First of all, the median progression-free survival, 6.2 months, but also the median overall survival of 13 months, and 25% of the patients are still alive at two years. This is very well above the mark that you can expect for today's treatment as a second-line patient. More encouraging even is that when we then stratify and select those patients who actually have a high AXL expression, which accounts for almost 90% of those patients where we had an possibility to test this, you see that the median overall survival is now statistically significant, and it comes out at 14.1 months. This is indeed very, very encouraging, and you can also see those that have an AXL negative status actually don't respond very well. It makes sense. If you don't have an AXL expression, you don't have the target.
Doesn't really make a difference to target it. If you have an AXL expression, it makes a huge difference in terms of the outcome. You can see a total separation of the curve, which is for the statistician, the most important thing here. Even further, and very encouragingly, we can also see that when we administrate bemcentinib plus pembrolizumab, patients that normally don't respond to pembrolizumab because they don't have a high PDL-1 expression, actually respond as if they had a high PDL expression when we combine it with bemcentinib. This is what the hypothesis is, that we can make those that have a low or negative PDL-1 expression, which is the vast majority, respond to pembrolizumab and bemcentinib. This is really encouraging. Why is it that it could work like that?
Well, PD-1 is present in multiple systemic immune cells, in the lymph nodes, and of course, in the tumor cells. It's not very often that it's tested, whether it's around in the immune cells or in the stromal cells. Although you may not test it to be positive, it's still around, and you may respond. We know that bemcentinib actually enhances the activation and the proliferation of CD8+ T cells that is enhanced or released by the immune checkpoint inhibition. It all works together. This is why bemcentinib actually reactivates the potency of checkpoint inhibition. Another and most recent analysis is even encouraging us further as to where we're going, because these on the left-hand side, this is a list of what is called hard to treat mutations. What does it mean?
It means that if you have a mutation in these genes, it's very unlikely that you're going to respond well to the standard of care. There's no treatments that are effective for these patients today, and this is a rather significant population in non-small cell lung cancer. We count that the numbers are small because when we say we have 100 patients, 10% is only 10%, but this is not the importance, importance of it. The importance of it is that if you look at it, what is really interesting is that we can make the mutated patients that doesn't respond well to respond like a wild type patients, as if they didn't have the mutation. It seems that bemcentinib, in addition to pembrolizumab, actually makes these patients respond as if they didn't have the mutation. This is, of course, very interesting.
If we finally take our data and say the all comers, so no stratification, just all the patients, and compare it to historical trials, we can definitely see that you are gaining something like 3 months above anything that you could expect. If we then stratify for AXL, it becomes 4 months, which is kind of 40% above what you can expect as a patient. This is indeed very, very. I should say that this is from the second-line, 008 study with a non-optimized dosing regimen, which we have optimized in the clinical study that we're going forward with. We do expect this to be even as we go forward. The safety profile, which is always important because it's the balance between efficacy and safety.
The take-home message is that it's quite safe, it's well-tolerated, and there's no new safety signals occurring from the addition of bemcentinib to pembrolizumab. The evidence, the preclinical, the clinical data, but also the medical need, is the rationale for why we are moving forward in first-line non-small cell lung cancer patients or patients that have not been exposed to a treatment before. We believe, as I said, that the rationale for that is there. There's also a unmet medical need in second line. We believe that's equally attractive, but as a small biotech company, we are not able to pursue both of these opportunities in a dual setting, so we are looking for a partner to progress the opportunity in the second-line setting. STK11, we've talked about it for a long time, and why is it we believe in it?
As I showed you before, we can reverse the mutation into a wild type situation, as you saw before, but it's a very, very significant part of the non-small cell lung cancer patients. It's actually 30,000 patients in the U.S. and the five big EUs. What is common for these patients is that there is a low response rate, low PFS, and low overall survival with the standard of care, i.e., the patients don't respond very well. There's no targeted available therapies for these patients, and they almost universally have a high expression of AXL, which makes the argument strong for combining bemcentinib on top of standard of care. Although it's a non-actionable mutation, it's actually identified by liquid biopsies or solid biopsies that are taking when you are diagnosed. We're not creating something that doesn't exist in the diagnosis of patients today.
Patients are tested for this. If they have a mutation, they will be able to be directed towards our study and hopefully in the future, our treatment. This is just a real world data. It's not a small number, as you can see, and it's published from two very, very prestigious hospitals, showing very clearly that if you have a STK11 mutation, the outcome is pretty devastating. You're looking about a 50% reduction almost. This is kind of on the back of a cigarette pack calculation of what's the market potential. It's of course, still an estimate, but the nominal data of the number of patients are quite well-established. We are only talking about for how long will we treat the patients? What's gonna be the price per month of treatment?
If we reference what is the price for other treatments that have similar outcome, but also for how long we would expect to treat these patients, remember, these are first line, not second line, so they will be treated longer. We're talking about an annual potential of around or more than $4 billion on an annual basis, so a very significant opportunity. If you look into the competition, what's around? Of course, there is competition, but none of the competitors are addressing the specific population, which is STK11, with any other co-mutation. Mirati, Amgen, Novartis, and the others are focusing in on KRAS G12C plus a STK11 mutation. We will also be able to address these, and even if they were taken by these competitors, it represents a very small portion, around 10%-12% of the total STK11 population.
Indeed, we are addressing the lion's share in this unmet medical need. We are progressing our study in first line or frontline non-small cell lung cancer by a phase Ib, IIa study. The Ib part is in the US, where we have sites activated and are enrolling patients. This is a traditional 3+3 study design. Once we have the two first doses cleared, we will move into the phase IIb part, which will be for specific non-small cell lung cancer patient that actually carry the mutation in the STK11 gene, and that is, is going to include European sites. In totality, there will be around 36 sites enrolling patients once it's fully up and running, including the phase IIa part.
We will, of course, do an extensive biomarker analysis to be able to see if we can also remodulate the immune system in the first-line setting, which we do believe is even more likely than in the second-line, because the patients have not been exposed to treatment, and therefore, their immune system shouldn't be as affected as a second-line patient. To summarize it, STK11 is a very common non-actionable mutation. There's no targeted therapies available. The market opportunity is above $4 billion annually in our own opinion. We know that this highly immune-suppressed toxic environment actually confers to a high level of AXL expression, so we know the target is present there.
We also know that inhibition of AXL may delay the resistance to chemotherapy and rescue the anti-tumor immune response, which are two very, very important elements for the treatment of non-small cell lung cancer. We're not curing the disease, but we are providing very meaningful extension of life, and we have a very strong IP protection. In addition to the focus here, we believe that BerGenBio offers additional value drivers. There is the severe respiratory infection, which we are not pursuing currently in the clinical setting, but we have very strong data from 2 phase 2 studies indicating efficacy in COVID-19 and potentially also in other respiratory diseases from our preclinical data. We are in the out-licensing process of Tilvestamab with ongoing discussions, and the outcome of that may yield an additional upside. Of course, the ADCT-601 program with ADC Therapeutics may also yield milestone and royalties.
From a financial perspective, we have previously announced the rights issue, in connection with that, we also streamlined the organization and refocused it to the purpose of pursuing the STK11 opportunity in first-line non-small cell lung cancer. We have reduced the organization by roughly 40%, we are reducing our cost by 30% going forward. This is a significant reduction in the burn rate for the company going forward, you can already see it here on the Q2, that the effect of the implementation of our cost reduction efforts have led to a significant reduction of the operating expenses compared to the historical burn.
From a cash point, we ended the quarter with NOK 226 million in the bank, and the average historical operating has, of course, been close to 70, but going forward, we believe it's closer to below 50. There is a significant reduction again, and therefore an extension in the runway compared to the previous structure of the company. This is a snapshot of what we have said previously, so first half of 2023, but also what we are looking to present in the next 12 months. First of all, we have initiated and enrolled patients in the 16 study, the first-line non-small cell lung cancer study. We have presented the data at AACR. We've presented very promising biomarker data from the studies, as I just alluded to. We have presented very positive data for AML and MDS, an indication that we're not pursuing.
We have shown that in myeloma, which we presented at ASCO, the primary endpoint was actually met. We have a manuscript published by MD Anderson. As we announced yesterday, we have a publication in Lung Cancer in the August edition. We are presenting our data at the SITC conference in November, but also at ESMO in October. We are looking forward to provide more insight into the data from the first-line non-small cell lung cancer study, and hopefully soon, the selection of the doses for the phase II, where we're going to take 2 doses forward to test the difference between them. We have also decided that we want to have an FDA advice to basically elucidate the pivotal trial requirements, i.e., what would it take if the...
If the outcome from the NO-21-016 study is positive, what will it take from a clinical trial perspective to get an approval from a regulatory point of view? We believe this is key and essential, but it also provides additional insight for the market and potential partners of what is the requirement for developing bemcentinib all the way to an approval in non-small cell lung cancer. We're also working with a prestigious hospital in the US to analyze the biopsies we have from the RAD-18-001 patients, to further validate what we say is the modulation of the immune system. This could be even more beneficial and add to the hypothesis of what we have seen in the second-line study. We are going to present our data as we move forward, so this is basically the new slew.
I think a lot of people have asked us over the past year, or at least since I joined, "What's the end game of the company? I mean, is it realistic that this company can actually take bemcentinib to the market?" I think the answer is very clear, not in first-line non-small cell lung cancer. It's simply too big and too much of an effort for a small company to establish the resources and the infrastructure to actually go all the way to the market. What we believe is the right strategy, and this is what we're pursuing, is that we're focusing on the indication where we have the strongest evidence, or we have a nice or very attractive competitive situation, and where we believe the time to market is reasonable.
We are doing that by focusing the organization, extending the runway, retaining the opportunity outside of the first line, because second line is, of course, still there, we would like to pursue that with a partner. We believe we can offer the most attractive data set or data points for our partner to take the program forward, and we're looking for the right partnership at the right time. Meaning we would like to retain the non-small cell lung cancer first-line STK11 opportunity as long as possible before we before we partner it, because we believe this will maximize the value for the shareholders instead of partnering it early on. That's not the same as we are not entertaining partnership discussions for other opportunities or opportunities outside the first-line setting.
We do believe that generating the data in the first-line setting is an incredibly valuable potential driver for the shareholders, and this is what our strategy is all about. That's the presentation for me today. I think we may have some questions.
Yeah. Before we go into the online question, we can ask if there are any from the live audience, any questions here? If not, we will take the online questions. It's questions about a question about the ongoing phase 1b for the lung cancer study.
Yeah.
The minimum is, nine patient in the three cohorts, but will you inform the market when the enrollment is complete?
We will inform the market when we initiate the two-way path.
Can you share any more...
Which is, which is very likely before the completion of the enrollment in the Ib.
Can you share any details of the current enrollment?
We don't provide any specific guidance on enrollment as a number. What we can say is that we're very close connections with the activated sites, which are now 5 in the U.S. We have assurance from the investigators there's absolutely nothing wrong with our protocol, and there is a patient feel relevant, and they do believe in the opportunity of combining bemcentinib with standard of care. We have an incentivized audience, and now it's about execution, which I think is reassuring in a setting where you are competing with some of the big Pharmas. There's no competitive trials per se, that should prohibit us from allowing to enroll the patients.
Then there's a question about Tilvestamab and out-licensing partnering efforts. Are there still ongoing discussions, and are there any expected timeline on that?
First part of the question, yes, there are ongoing discussions, and we expect to have more transparency on those discussions before the end of this year.
Thank you, Martin. That completes the Q&A section.
Thank you for attending.