Good morning, thank you for joining the Hookipa Pharma fourth quarter and full year 2022 earnings and 2023 outlook conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I will now pass the call over to Matthew Beck, Executive Director of Investor Relations. Please go ahead.
Thank you. A slide deck accompanying today's call is available through the webcast and in the event section of the Hookipa website. Please manually advance the slides as we prompt you through them. Joining me today are Chief Executive Officer, Jörn Aldag, Chief Financial Officer, Reinhard Kandera, and Chief Medical Officer, Katia Schlienger. During today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of investigational agents, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans, future research and development, and possible intended use of cash and investments.
These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve risks and uncertainties that may cause the actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements which are only made as of today's date. The company disclaims any obligation to update such statements. For today's call, Jörn will provide opening remarks. Reinhard will offer high-level comments on our financials, and then we'll open the call to Q&A. With that, I'll pass the call to Jörn.
Okay, good morning, everyone. I'd like to focus first on our accomplishments in 2022, and second, highlight what's coming in 2023. At Hookipa, we're leveraging our Arenavirus platform to create therapies that deliver unprecedented antigen-specific CD8+ T cells to combat disease. In 2022, we saw progress both in and toward the clinic across four different programs in areas of considerable unmet need. Please go to slide three, which is our portfolio slide. Key developments in 2022 were the progress of our HPV-positive cancer drug HB-200 in a phase II single-arm cohort in combination with pembrolizumab. The acceptance of an IND for HB-300, a prostate cancer therapeutic targeting self-antigens.
A material collaboration with Roche for a novel approach to target shared neoantigens in cancers for lung, pancreas, and colon cancers with KRAS mutations, and achieving phase I readiness for our Gilead partnered hepatitis B therapeutic vaccine. Let me give you a bit more background on these major achievements. Our phase I dose escalation study showed that HB-200 was generally well-tolerated, rapidly induced a high magnitude of tumor-specific T cells, and showed early anti-tumor activity in difficult to treat patients as a monotherapy. We progressed to testing HB-200 in HPV-16+ head and neck squamous cell carcinoma patients in phase II. We're currently enrolling patients in three dose expansion cohorts.
A cohort in the non-randomized first line setting in combination with pembro, a cohort in the non-randomized second line setting and second line plus setting in combination with pembro, and a cohort of patients in the post standard of care setting at the recommended phase two dose. Regarding the HB-200 trial, I reaffirm our Q2 data guidance. We will disclose data from 10-20 patients each in the first and second line settings in combination with pembro, and we will provide an update on our monotherapy dose escalation cohort. We will present an update on this trial and all three cohorts in a press release and an investor call in the second quarter and inform about the likely path forward. As a reminder, our HB-200 trial, which targets an oncoviral antigen, supports the first pillar of our three-part strategy in oncology.
The second pillar in our oncology strategy is targeting self-antigens, which we are pursuing with our HB-300 program in prostate cancer. The trial is now open for enrollment as per our guidance to start the trial in Q1 2023. Targeting neoantigens is the third pillar of our oncology strategy. In October, we announced a collaboration in this field with Roche to advance our HB-700 asset, targeting KRAS mutations in multiple indications and an option to develop a second undisclosed candidate. We're pleased by the progress across our oncology portfolio, as well as the acceptance by the FDA last July of our Drug Master File. The information from that master file can be used to support new IND filings using our platform, leading to reduced preclinical cycle times. Regarding our Gilead collaboration, much progress has been made.
After restarting the HIV program, HB-500, under our control to bring it to the end of phase I-B, we're working with our academic collaborators and plan an IND filing in 2023. The hepatitis B program progressed well. As planned, we completed the key preclinical contributions for IND preparations in 2022, triggering a $5 million milestone payment. Gilead guided to the start of the trial of this HBV program in 2023. What's in our plans for 2023? The readout of all three HB-200 phase II expansion cohorts in the second quarter of 2023 shall guide our decision to move into a randomized HB-200 trial in combination with pembro versus pembro alone. We have Fast Track designation for such a trial and a supply agreement for pembro with Merck U.S.
In our HB-300 phase I trial targeting prostate cancer, we're recruiting now and we'll start dosing patients. Expect initial data in the first half of 2024. We had a good start into 2023, with two significant milestone payments reflecting significant progress in our collaborations. First one, $5 million from Gilead for the completion and delivery of a regulatory support package for their phase I clinical trial of a therapeutic cure for chronic hepatitis B using HB-400. The second, a $10 million payment from Roche for starting GMP manufacturing of the KRAS therapeutic, an important step before filing the IND, which we expect to happen in the first half of 2024. We expect to file our HB-500 HIV therapeutic cure candidate, IND, in 2023.
We will continue our work for Roche, both on the KRAS therapeutic as well as on the option package for an additional target which Roche may decide to exercise in 2024. In summary, we've made significant progress in 2022, and we are positioned for an exciting 2023 with material news flow to come from our key programs. Finally, I'd like to highlight that we have significantly strengthened our cash balance. With $113 million at year-end 2022, we're well funded for many major data readouts. With that, I'll turn the call over to our CFO for more financial details. Reinhard.
Thanks, Jörn. Good morning, everyone. I want to give you a few highlights of our financial results for the fourth quarter and the full year 2022. As shown on slide four of our presentation, we ended the year with a strong quarter in revenues, which amounted to $7.8 million and included a milestone payment from Gilead and the start of the recognition of the $25 million upfront payment received under the Roche collaboration. Our Q4 spending was very much in line with the average of the previous quarters, leading to a quarterly net loss of $12.3 million for Q4.
For the 2022 results, I want to start by pointing out our significantly strengthened cash position, which we achieved through our $75 million capital raise in the first quarter and cash inflows from partnering, including $19 million from Gilead and $25 million from Roche. I'm also proud to report that we were able to achieve the significant 2022 R&D progress that Jörn has just detailed at a 17% lower spend compared to 2021. Our G&A expenses moderately increased, but the increase was more than offset by higher grant and interest income. Bottom line, we reported a full year 2022 net loss of slightly less than $65 million, which is 14% below 2021. We continue to manage our burn rate tightly and to rely on partnerships to support our spending.
We expect to moderately increase our expenses in 2023 as the pipeline progresses. The financial contributions from partnerships were already evidenced in the first quarter of 2023 by the receipt of a total of $15 million in milestone payments. With a cash balance of $113.4 million at the end of 2022, plus the $15 million in partner milestone income already achieved in 2023, we consider ourselves well funded to reach beyond important upcoming pipeline catalysts. With that, I'd like to hand back to Jörn for some closing remarks.
Thanks, Reinhard. We're coming to the end of this call. I'm indeed very proud of our talent at Hookipa and their drive to support the company's and our shareholders' objectives throughout this difficult capital market environment. We're laser-focused to produce and present to you our clinical data updates throughout the year. With that, I'd like to reopen the line for Q&A. Operator?
Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll go first to Brian Abrahams at RBC Capital Markets.
Hi, guys. Thanks. It's Leo on for Brian. Congrats on another quarter and thanks for taking our question.
Hi, Brian.
How are you thinking about the bar for HB-200 and what's achievable? If the response rates fall in the, you know, 25%-35% range, how are you thinking about next steps for the program, and what's your sense of where standard of care is for each line and what docs would find meaningful? I mean, would you add more patients to tease out a response or would you pivot and look to modify the program depending on what you see? Yeah, maybe I'll have a follow-up after that. Thanks.
Yeah. I'll let Katia give you more specifics to it, but in general, we know that the standard of care is pembrolizumab. In the second line had a response rate, objective response rate of 15%, and in the first line an objective response rate of 20%. We consider success if we're able to double these, meaning that we reach around 40% objective response with the combination of HB-200 together with standard of care pembrolizumab.
Yes. Adding a little bit to that, you know, we will look at the totality of the data. If we are in the gray zone, if it's not clearly yes or no, you know, we would look at other marker of efficacy. We would look also at the immunogenicity. We will then decide if we want to start the trial or not.
In brief, if we make 40% objective response rate, there's a clear go-ahead signal, but we will be looking at the totality of the data in making that final decision, but because you know that this is going to be a phase III trial with a very significant investment.
Got it. Thanks. Then maybe just a quick follow-up on that. Have you talked about how much follow-up you'll be expecting for the patients that you present at the upcoming data cut? Is it going to be only patients in more than two scans? You mentioned you'll be presenting the data in a press release. Are you still looking at a medical meeting submission around that same time? Thanks. I'll hop back in the queue.
Yeah.
Yes.
We intended at this point in time to have a press release and also, an investor event. We'll substantially detail the data, and be at a medical conference some point, after the summer. Katia?
Yes. No, nothing more to add to that. Exactly that. Of course, we will present our data at a scientific conference afterwards.
We'll go next to Vikram Purohit at Morgan Stanley.
Hi, everyone. This is Will on for Vikram. Thanks for taking our questions, and congrats on the quarter. Just kind of the same vein as Leo's question. How would you frame expectations for the initial data expected for HB-300 in the first half? Could you just give us a sense of what we can expect to see in terms of the data points and what you would consider a win?
Immunogenicity.
Yes.
We're looking at a self-antigen. Clearly, establishing immunogenicity against the antigens that we've chosen, would be a significant win in the first half of 2024. Katia?
No, exactly that. I think it's our first readout as well as the germ safety profile. We don't expect a lot of surprise, you know, based on an excellent safety profile that we have demonstrated with the HB-200 program using exactly the same vectors. All this information will come in 2024.
Okay. Great. Is that going to be just a press release or is that going to be associated with a medical conference as well?
It depends on the timing of the data availability versus a major conference at which we could present. It's not decided yet.
Okay. Well, thanks for the color. Appreciate it. Congrats again.
Welcome.
Thanks.
We'll move next to Alec Stranahan at Bank of America.
Hey, guys. Thanks for taking our question.
Hey, Alec.
Hey. Just a couple from us. Appreciate the additional color on the 2Q updates for the HB-200 program. You know, as we're thinking through the historical controls, obviously those are in a broader head and neck population. Is there any reason to think that KEYTRUDA monotherapy would perform better or worse than a HPV-16+ population? Just trying to think if that's an apples to apples. Just on the capital allocation priorities the next 12 months, starting a few new studies, obviously you've got some partner funding as well. I guess where does that sort of put you guys in terms of runway and where is sort of your main focus in terms of capital allocation? Thanks.
Katia, will you take the KEYTRUDA monotherapy question?
Yes. Yes. Absolutely. In KEYNOTE-048, which is a randomized phase III trial that led to pembrolizumab approval in first line for patients with head and neck squamous cell carcinoma, there were no known difference between those patients with HPV-positive or HPV-negative head and neck. That's to answer the first question. Were you thinking of something specific around that question?
No, I think that's helpful.
Yeah.
Just on the capital allocation.
All right.
Yeah.
On the capital allocation, clearly the key priority at this point is moving HB-200 along. HB-300 from a strategic perspective is important because we're targeting in self-antigen. If we're able to generate significant T cell immune responses against self-antigens and by that breaking tolerance, we're clearly in a pretty good count. That is our priority number two, strategically important. Clearly also important from a capital allocation perspective are HB-500, which is the HIV program which we are running until after the end phase I-B, where Gilead has an option to take it in. The very interesting KRAS program that we're running with Roche. Both these programs are basically funded through payments that we're receiving from Gilead and Roche.
Your question actually addresses the key spend, and that's obviously HB-200 and its progression, and where we have various avenues to take it forward, including the HB-200-04 randomized trial, and HB-300. Regarding the cash runway, I would like to have Reinhard answer that question.
Given the uncertainty of the business and the dependence on R&D outcome, we don't give specific numbers, but I can give you some orientation. I've mentioned that our R&D cost is gonna increase moderately. On the other hand, we have two big partnerships with Roche and with Gilead that provide increasing support from partnership revenue to cover that cost. By and large, expect our net loss in the current year to be similar than in the previous year, around $65 million. As I've mentioned, we have more than $113 million in cash at year-end. There is another $15 million that already came in from partnerships in the first quarter.
I'll let you do the math of where this takes us approximately in terms of cash runway.
Great. Thank you. Looking forward to the update.
Thanks a lot.
We'll take our next question from Arthur He at H.C. Wainwright.
Hi. Hello, everyone, and thanks for taking my question. Just for the HB-200 program, regarding the randomized study, could you give us a more specific regarding the study initiation, and when could we expect the data from the randomized phase II study for the first-line patient?
For the first point, obviously, a lot of preparation has been done. We have manufactured HB-200 product. We have a clinical protocol in place that we can apply. We have had discussions with the relevant CROs that would support the clinical trial. We have to make the decision and informed folks that we would make that decision based on information that is coming from our clinical trial, which is currently ongoing and running, and which we will be reporting about in June. More specific timelines, you will hear when we do the data release. Katia, maybe a flavor on initial data from the HB-200 program, the randomized trial when it gets started.
Yes. Just as a reminder, we have a Fast Track designation already that we obtained from the FDA for that study. We have this supply agreement with Merck. We have already discussed the design of our trial with the FDA, and we just, you know, would like to have a deep look into our data from the H200-01 data in the singular cohort to make basically the decision to move ahead. Is that helpful, Arthur, or should I answer something else, or?
No, that's helpful. Yeah, that makes sense anyway. For your upcoming presentation at AACR, it's quite interesting for the target. Could you elaborate more on that particular candidate?
We do know that a significant number of immunotherapies are suboptimally working with regard to efficacy because they're lacking T cells at the site of the tumor. For that reason, we were claiming that we're able to drive very high levels of antigen-specific T cells, and that this ability to drive these antigen-specific T cells towards the tumor could actually help a number of different immunotherapies to work. You may remember that last year at AACR, we demonstrated the combination with 4-1BB. In this AACR presentation, you will be looking at a different immunotherapeutic, IO102, which we think has a significant promise in combination with HB-200 as well.
What we're trying to show, albeit preclinical for the time being. Is that with these types of combinations, we can actually significantly enhance therapeutic effect in cancer patients across many different diseases. We're very pleased that at AACR we have the mini symposium, so an overall presentation of that data that you're referring to.
Oh, great. Thanks for the additional color. Congrats on the progress. Talk to you soon.
Thank you.
Thank you.
We'll go next to Asthika Goonewardene at Truist Securities.
Hi, guys. Thanks for taking my questions. I want to go back to the first question asked about the bar here in the 10 integrated patients, what they did that they're looking forward to in the second quarter. You told us the bar in response rate, but as we know, IO also shows that the IO works, you have a nice durable response. What do you think is the bar for duration of response in both these cohorts that you're planning on presenting? I've got a couple of follow-ups on that.
Yes.
Katia.
Yes. No, absolutely. We're planning also to look at a number of other efficacy endpoints like disease control rates. You know, indeed there are some times when we have shown that with our vector as a single agent, we see some patients with stable disease for months. We're planning to report that as well. In terms of duration of response, you know, this will be what we will have, you know. Knowing that we have started enrolling those patients at the beginning of 2022. We will put, you know, the maximum of data that we have at this point. We guided to 10-20 patients in first line and 10-20 patients in second line plus.
Yeah. Katia, maybe I'll ask it more directly. Do you think the duration of response data will be mature enough to see a signal when you present this data in the second quarter? Would you need more follow-up to really understand what the median duration of response is in these cohorts?
Yes, we will probably need to continue to follow up. You know, it's quite frequent that for this kind of data, there's updates on the data regularly at each of the conference. We will continue to follow up those patients no matter what. You know, this would be a first release, but we will continue to follow up those patients and provide regular updates at scientific conference.
I think that it's important to note. Yeah, sorry, Katia.
No, no, go ahead, Jörn.
Yeah. It's important to note that the median progression-free survival, for example, for pembro alone, is very short. While we will not have data that has fully matured across the entire data set of patients, you will be able to see how we compare against the median progression-free survival of pembro alone.
Okay. You know, when you're looking at this at the more longer term follow-up, maybe either hopefully later this year or maybe early next year, what is the bar then for progression-free survival or duration of response that you would like to see? Given that you said that you're looking for double the ORR, would you want to see double the median PFS or the double the duration?
I can take that. We know that for immuno-oncology, PFS is not necessarily the best primary endpoint. You know, we know that for pembrolizumab, for example, it's three months in first line and two months in second line plus, and that does not reflect the huge OS advantage that is provided in first line and second line for those patients. I would like just to caution that yes, we will provide all what we have, but PFS is not necessarily the right measure for immuno-oncology product. In terms of duration of response, so this is measuring the time on treatment without progression in patients who are responding. This will take, you know, several months to assess. We will probably provide an update later on through scientific conference abstract and presentation.
Got it. Okay. Just lastly, just bigger picture here. Previously, in our discussions, you know, the really strong immunogenic response that you were generating with HB-200 and the platform that was really attractive. It kind of made sense that adding something like PD-1 was a logical step to making this work. Given what you know today, and the emergence of other data, preclinical and otherwise, how do you feel about that? If there's anything that you would like to add, that to a combo, what would that be?
I'm not clear about what you specifically want to find out here. Could you just specify your question a bit more?
Yeah, yeah. I mean, I'm just wondering like, Is it, you know, you're getting the immunogenic response with HB-200. You're getting checkpoint blockade with the PD-1. Is there anything else from an immunological perspective that you think would be useful to add to this combination? Maybe like, do you think like getting more danger signals with chemotherapy? What do you think is the next logical component that you might want to add to this type of therapy here?
It may be interesting to look at the data that we will present at AACR. I let Katia answer the question.
Certainly, like, we know. What we saw in monotherapy, you know, we saw that we were able to see clinical response and stable disease in some patients. We saw huge immunogenicity induction with very high level of CD8+ T cells specific to the tumor antigen in the circulation. We saw that those T cells are polyfunctional and that they do infiltrate the tumor. We would like to continue to develop those data in monotherapy and in combination with pembrolizumab over the next months. To tell you exactly what we will show and what it means, you know, I think generally the field is looking for general correlation between the immunogenicity and efficacy, and we will definitely look at that and report what we find.
Awesome, guys. Thanks. I look forward to it and look forward to your updates at AACR as well.
Great.
Thank you.
We'll take our next question from Roy Buchanan at JMP Securities.
Hey, great. Thanks for taking the question. Just a few quick ones. First one for Reinhard. Can you just remind me if Gilead has a timeframe they need to make the purchase of stock? I think there's $30 million they're still eligible to purchase. Is there a certain timeframe on that?
Yes, there is a timeframe. We have actually the choice to draw that additional equity, and it is until end of 2023.
Okay, great. Thank you. Has Gilead said if the phase I in hepatitis B is gonna be in patients or healthy volunteers?
Katia, we haven't disclosed that yet, and I don't think we can. We have to leave that to Gilead.
Okay. fair enough. Just the last one, can partners use the Drug Master File? Like, can Roche use it for the KRAS program?
Yeah, we can use it, as we're preparing the phase I, phase I-B, we're doing the IND work, we can use that Drug Master File from HB-200 and HB-300 in that context as well.
Okay, great. What about partners that are doing the phase one themselves? Can they use it?
Katia, can you answer this?
Yes. They can certainly use it, you know, like, when they use our product, this could be something that they can use when they file an IND in products that are related to those, you know, the ones that are using Gilead is a bit different than the one that we're using in oncology. That Drug Master File was done for the two-vector replicating, which is different from the HB-400 technology. Depending on what our partner will use. For example, for Roche, absolutely, this will be used for the IND submission as well.
Great. Okay.
Yeah. It's just very, very briefly, yes, they can use it. At this point in time, no one is doing a phase I with our program.
Got it. Thank you.
With, arenaviruses. Great.
Our next question comes from Suzanne van Voorthuizen at Kempen.
Hi, Suzanne.
Hi. Good afternoon. Thanks for taking my question. I just wanted to circle back to the Q2 update on the HB-200 program. I'm not sure I heard it right. Can you clarify what you will include in terms of duration data in the press release? Will it include both duration of response and PFS? What conference in the later half of the year are you targeting to get the data presentation? Then I'll have a follow-up as well.
Katia.
Yes. In terms of duration of response, you know, The challenge would be to obtain a million for all patients. Probably we will not have a million at that time, but I'm just speculating. The duration of response, you know, for pembrolizumab is 22 months. We, you know, it's difficult to know if we will be able to reach a million at that time. We will disclose on what we have in terms of objective response rate, disease control rate, and associated efficacy endpoint. We will disclose also the safety profile and the immunogenicity data that we will have at that time. Is that helpful or?
Yes, for sure. Thank you. What conference in the latter half of the year are you targeting for presentation?
We did not decide yet and we will, we will re-release it when we are ready.
Got it. All right. Then, a follow-up is on a different topic. With now Gilead and the addition of Roche as partners for Hookipa, how are you looking at potential further BD? Just would like to hear your considerations and preferences in terms of type of deals, oncology or infectious diseases, development stage or platform deals. Yeah, just some thoughts that you can share there.
Yeah. Any, any collaboration is actually quite a complex undertaking. Working with bigger pharma companies like Gilead and Roche, does trigger a lot of activity, organizational and otherwise, within an organization. And adding business development activities has to take account of that. We, at this point in time, would like to retain value in our programs and not partner them away. Having said that, we have a technology platform, and we know that there are many different antigens that we're currently not tackling, which we could if a pharma company was interested in it. And clearly, the development of capital markets, the way we're seeing them today, may also trigger one or the other thought about interesting deal structures that would provide funding capital to the company.
You're asking a complex question. At this point in time, we're very, very happy about our collaborations with Roche and Gilead. We can see that as our data sets mature and the strength of the technology gets more and more proven, other people could be interested, and we would not be adverse to partnering. At the same time, we do know that retaining value in the company, is important. Therefore, we would have to look at it, at the moment that such partnership discussions come up.
Got it. Thanks a lot.
There are no further questions at this time. I would like to turn the conference back over to management for any additional or closing remarks.
Very briefly, I think we've had a great year, 2022. We're gearing up to some important value inflection points and milestones, looking forward and curious to see the outcome of all of this. Would basically tell our shareholders that we're doing our utmost to keep our burn low up until better times in capital markets, to really progress the company to big value inflection points that will change its valuation and with that, the future. Thanks a lot, talk to you soon. Bye-bye.
That does conclude today's conference. Thank you for your participation. You may now disconnect.