Earnings Call: Q1 2021

Apr 21, 2021

So welcome to Biotic's First Quarter Report 2021. I'm Guni Larslund, and I'm the CEO of Biotic. I will share the presentation here today with our CFO, Jan Maxson. This year has started really well for Biotic. Our most advanced program, lekanamab, BAN2401 in Alzheimer's disease has further been strengthened by new data and other data in the Alzheimer's field. Our partner Eisai has completed enrollment of patients into the pivotal CLARITY AD study, and our Phase 2b results have been published. Our project portfolio has progressed well and expanded during the Q1 of this year, and I will describe more about this in the presentation here today. Next slide, please. Biotic is listed on NASDAQ.commidcap, This is our disclaimer. Next slide, please. Biotic is a unique Swedish biopharma company with the aim of improving lives for patients with Disorders in the Central Nervous System. When I say that I think it's a unique company, I base that on 4 different areas combined. The first one is that we focus on R and D of innovative treatments for central nervous system disorders, where there is a high unmet medical need like Alzheimer's disease and Parkinson's disease. These diseases affect large patient groups and a relative with a large cost for the society. Today, there are only symptomatic treatments available, and we work with disease modifying treatments meant to affect the underlying disease and slowing down the disease progression. The second aspect is that we have a great organization with very experienced and engaged coworkers and important fruitful collaborations with universities and with our 2 strategic partners, Eisai in Alzheimer's disease and AbbVie in Parkinson's disease. The third aspect is that we have an attractive and well balanced project portfolio. We have projects spanning all the way from early discovery to late Phase III. We have partnered projects that generate revenues by milestones and where our strategic partners carry all the costs for clinical trials. And we have also fully owned projects with substantial marketing and licensing potential. The 4th aspect is that Biotic is well financed with a strong cash position with approximately SEK 1,000,000,000 on the bank. And we have valuable collaboration agreements with Eisai and AbbVie at the value of up to SEK 8.9 SEK 1,000,000,000 plus royalties if we come all the way to the market. So in summary, Biartic is a dynamic and very exciting the company with a huge potential, which I'm happy to lead. Next slide, please. Some highlights so far this year, And I will start with our most advanced program, lecanumab, for Alzheimer's disease. And I will start with the press release that we had yesterday. Then we announced that the Phase IIb trial with lecanumab has been published in Alzheimer Research and Therapy. And we also announced that our partner Eisai has expanded the confirmatory Phase III study called CAREG AD with approximately 200 patients with early Alzheimer's disease. So now the study has completed enrollment. And in total, 1795 early AD patients are part of this trial. And they will now be treated for 18 months, and then we expect the readout in September 2022, so next year. And this study is, of course, aiming to confirm the promising results that we saw in the big Phase IIb trial. The next aspect is what happened at different Alzheimer Congresses earlier this year. And there was a huge Congress, ADPD, in March, where Biartic presented data. And there, we showed that we had significantly elevated levels of soluble A beta protofibril, the harmful forms of amyloid beta. And those were seen in Down syndrome patients in a similar way to Alzheimer patients. And this in contrast to normal controlled person. And the binding of lekanumab to these harmful forms of amyloid beta, the protofibrils, and to Plaques was for the first time demonstrated in Down syndrome patients. So these data together suggest that lecanumab could Health Preserve Brain Function in Adults with Down syndrome with dementia. So I think that is an important step forward for this indication. Eisai also presented results, updated results from the Phase IIb open label extension study at the Congress. There, they have shown that the effects of leucanumab on amyloid reduction that assists for up to 2 years following lecanumab discontinuation. So if you look at the little graph there to the right, for those patients who were part of the core study of the Phase IIb, there we see that Lecanumab dramatically decreased amyloid in the brain. So they are normalizing the levels in the brain of amyloid. When they are without treatment, until the open label extension study started, there we see that The low levels remained for those patients who had got the treatment of lekanamab. For those patients who had placebo in the core study and no treatment. They continue on a high level. And when they have then started the open label extension study. For those patients who previously had placebo, they had now a dramatic decline of amyloid in the brain. So a clearance that is dramatic, normalizing the levels of amyloid in the brain. And for those who already have had the clearance of amyloid from the brain. There was only a small further decline. Importantly also was that lecanumab, when it was dosed 10 milligram Perkeg Biweekly, was shown to reduce amyloid levels in the brain to normal levels In more than 80% of patients who participated in the core and in the open label extension study, and this as early as 12 months into treatment. Other really important findings and presentations at the Alzheimer's and Parkinson Congress was that We now can note that 3 different anti amyloid antibodies have shown clinical effects action of amyloid in the brain of Alzheimer's disease patients. So I think that all supports the amyloid anti amyloid hypothesis and further strengthen lecanumab. And when we compare lecanumab with other late stage competitors, We can note that lekhanumab is very competitive. Next slide, please. And other highlights during the Q1 were that we had important learnings at the Alzheimer's Parkinson Congress in Parkinson's disease in that field. And that supports now AbbVie, our partner, when they are designing the Phase II program. So right now, we are discussing with AbbVie about the design of Phase II and preparing for the Phase II program. And other highlights was that we had European patent granted for new antibodies targeting truncated forms of amyloid beta. And our patent portfolio has expanded further during the beginning of this year. So now it includes more than 230 granted patents and 60 pending patents patent applications, and this is within 13 patent Families. Our project portfolio has also expanded, and I'm really excited about this that We have now 2 new Alzheimer's disease projects that are coupled to our brain transporter technology. So that technology platform has Evolve in a great way, and it's now linked to 2 of our Alzheimer project. And for myself, Personally, I also had a highlight when I had the opportunity to present Biartic and our important research in Alzheimer's disease to the Swedish Royal Family. And I was really impressed by the high level of engagement in this area. So in summary, Biotic has got a great start of this year. Next slide, please. Biotic has an attractive and well balanced portfolio, and it's all focused on Central Lervus System Disorders. And we have divided it in 5 different areas. Alzheimer's disease is the largest area. And when I say it's balanced, I mean it from on 3 different ways that we have several projects in different areas And that we have also projects spanning from early discovery all the way to late Phase 3. And the third is that we have a combination of fully financed partner projects and innovative fully owned projects with great potential. And our strategic partners finance the expensive clinical programs in Alzheimer's disease and Parkinson's disease, whereas Biotic finance less expensive preclinical phases, where we can increase the value of the project before going into partnering discussion. And we can also notice that for this quarter, We have expanded the project portfolio with 2 new early discovery projects, together then with our brain transporter technology. And you see them as ADBT-two thousand eight hundred and two and ADBT-two thousand eight hundred and three. Next slide, please. Biartic has 2 long standing successful partnerships, together with Eisai in Alzheimer's disease all the way back since 2,005. And Eisai is a great partner, and they are very committed to dementia and to Lekanema. We have so far received EUR 65,000,000 Out of the total aggregated value of the agreement of up to EUR 222,000,000, there is still a lot to receive if the program continues to progress well. And if we come all the way to the market, we can also expect Royalties of substantial value. I think that they could be like blockbuster revenues for Biotic, and that means that we could see revenues more of more than US1 $1,000,000,000 per year. And I think this is quite impressive if you consider that we are not having any costs for the clinical program. And furthermore, we also have the right to other indications, And we also have the right to commercialize lekanamab in the Nordic region for Alzheimer's disease. So I really think that Biotic has a great business model. And that model is also applied in Parkinson's disease where our partner is and we have a very successful collaboration with them as well. In this collaboration, we have so far received USD130,000,000 out of the total aggregated value of USD 755,000,000 And If we come all the way to the market, we could also expect substantial royalties here. And as we have already mentioned that they are planning to start with Parkinson's disease for ABBV805, but they are also looking into other potential indications for ABB0805. Such indications like multiple systemic atrophy and Lewy body dementia. So this collaboration could also lead to substantial revenues for Biotech if it all continues to progress well. So I'm really happy and proud of these two collaborations. Next slide, please. We'll talk a little bit more about lecanumab, where our partner Eisai are strongly committed, and they have a broad program, and there are now 3 different clinical studies underway. We'll start with CLARITY AD, the Phase III confirmatory study in early Alzheimer's patients. The study is progressing well, and patient enrollment was completed earlier this year, as I said. And we now have 17 95 early Alzheimer patients who will be part of the primary endpoint readout with 18 months data, which Eisai expects to be available in September 2022. The second study in the same patient population, which is mild Alzheimer's disease and NCI, Those 2 together are called early Alzheimer's disease. And the second study there is then the open label extension study linked to the Phase 2b study, which is ongoing with about 180 patients. And this is where we get data continuously since this is an open study, which is being presented at congresses, and we just had this presentation at ADPD and other congresses earlier this year, as I just mentioned. Then the 2nd Phase III program is in even earlier stages, very early stages. And now we talk about individuals who are not yet having any symptoms. So this stage is called preclinical Alzheimer's disease. But these individuals, they have increased levels of amyloid in the brain, and they are then part of this Phase 3 program called AHEAD-three forty five. And this is a study which where The Alzheimer Clinical Trial Consortium has selected lecanumab, together with Eisai, to be part of being explored as more of a prevention program at this very early stages to and the aim here is to see that we can reduce amyloid levels in the brain and normalize them and then also evaluate therapeutic effect of lecanumab on the progression of this disease. So we're very impressed by how our partner Eisai are driving lecanumab in a broad approach to support and help Alzheimer's patients. And we are really looking forward to following the progress here. So next slide, please. So what about our early stage portfolio? Well, our early stage portfolio continues to progress well and according to plan despite the COVID-nineteen pandemic situation. And I think the ways that we have adjusted, and of course, we work a bit differently, but so far, we have managed Progress our early stage portfolio without any noticeable disturbances. I think it's important to have Several different possibilities to target Alzheimer's disease since it's a huge disease affecting many, many patients around the world. We say that about 30,000,000 patients around the world are affected by Alzheimer's disease. And it's really increasing and increasing since It is linked to age, and the population around the world is getting older and older. So therefore, we are working on different targets. And I think in the future, we will also most likely see combination of different targets in order to give the patients the best outcome of the treatment. So we have 6 fully owned disease modifying antibodies now in our Alzheimer portfolio. And we also have out licensed a backup compound to BAN2401 in collaboration with SAI, which also is in early stage. So this quarter, as I said, we have expanded the early stage portfolio with 2 new Alzheimer project linked to our brain transporter technology. Our preclinical programs in Parkinson's Disease and in other CNS disorders. It's also progressing well. And we are also, as I said, progressing the Down syndrome with dementia patient segment with new data, as I just reported. And I'm really excited about how well the brain transporter technology platform is progressing. And also, as I said before, we're working on this diagnostics. And this is another area where important things are happening in the field around us, where blood markers are looking to be more and more promising. And that will be an important complement to the disease modifying treatment in order to identify the patients at an early stage. So also great progress for the early stage portfolio during the beginning of this year. Next slide, please. So by that, we are now coming to the financial summary, and I will hand over to our CFO, Jan Matsson. Thank you, Gunilla. And for those of you that don't know Biartic so well yet, I'd like to point out that we currently don't have any Steady revenues, but we have a business model that is focused on partnership agreements, which means that our financials are very much linked to milestones And that income is related to research projects with our partners. With that, let's start looking at Our numbers and my comments here relate to the quarter's number. Net revenues were SEK 7,000,000 for the quarter Patrick, 36,000,000 in the same period last year. The decrease in the quarter compared to last year relates to lower revenue from the Parkinson's disease program, which is according to plan, together with the fact that during last year in the same quarter, we had a one off Of SEK 23,000,000 that was recorded attributable to a remeasurement of total costs on the Parkinson program. Looking at OpEx, total costs are in line with last year from 36% to 38%, of which project expenses in total increased To 11% from 10% in the Q1, and this was mainly related to and explained by our increase In our own projects and our expanded portfolio. Moving to operating results, it was down to minus SEK 29,000,000 in the quarter compared to plus SEK 4,000,000 in Q1 of last year. And just as for net revenues, this relates to The Parkinson disease program. And to look at our costs in the coming year, we forecast To have costs of in the range of SEK 180,000,000 to SEK 220,000,000 Next slide, please. Looking at cash and net results. The cash balance continues to be in good health and amounted to just below SEK 1,000,000,000 at the end of the quarter. Now cash flow from operating activities was minus €38,000,000 compared to minus €36,000,000 in Q1 of last year. Net result for the period was minus 29% compared to plus 4% same quarter last year. And So in summary, we continue to be in good financial shape. And with that, I hand back again to Gunilla. Thank you, Jan. So by that, we are now coming to upcoming news and closing remarks. And now we are on Slide 14. So upcoming news flow. Eisai are progressing the broad clinical program for lecanumab in Alzheimer's disease in a great way. And we expect more data to be presented at coming international congresses. The next one to look out for is the AAIC Congress in July, which will be partly virtual. And everyone in the Alzheimer field is also, of course, very excited to follow the FDA decision on aducanumab, where the review period is until the 7th June. In Parkinson's disease, we look forward to the continued Phase I study being completed by AbbVie and with AbbVie's preparation of the Phase II programs, where we got a lot of important learnings from the competitors at the ADPD Congress. And the diagnostics area there, we have seen great progress in the Alzheimer's field, where we will follow this closely. And I want to point out, especially the blood biomarkers like phospho Tau217, which looks really promising. And this could be a very important contribution to the disease modifying treatment for Alzheimer's disease. And our brain barrier technology platform, We will also continue to develop that and see when we can do further sharing of results there. So we can conclude that we have had a very good start of 2021 and that we have exciting times ahead. Slide 15, please. And I just want to close by saying that Biotech is built on great science. We have great projects. We have great partners. And it's all being done by our great people working for Biotic. And everything we do is with patients in mind, and our aim is to help patients with brain disorders. And I think that we are on our way to help Alzheimer patients within not too long. Next slide, please. And by that, I thank you for your attention, and we are happy to take questions. Thank you. And our first question comes from the line of Joseph Edin from Rx Securities. Please go ahead. Your line is open. Good morning, and thanks very much for taking my questions. This morning's release, you announced the first time Programs where you're coupling antibodies with your brain transporter technology. I I was just wondering if you could give any more color on those programs, for instance, targets of the antibodies, The timeline to preclinical data or clinical data? And then the second question I had, it looks like The preclinical data on the Down syndrome, there's proof of mechanism there. It's quite promising. What steps Do you see that you still need to complete to get to a Phase I trial? When might that be? Thank you. Excellent questions. Thank you, Joseph. I wish I could reveal more information for you on the Brain Transporter. But I think what we can say now is that our Brain Transporter technology platform has progressed so well and we are working on a broad potential for the platform as such. And then we have selected 2 Alzheimer programs that will be the frontrunners with this technology. And I'm not in the position right now that I can revealed the target and the time lines. But I can say that we are very encouraged and pleased to see that it's now being applied into some of our projects as the first step. So I think it's really exciting. And then your second question on Down syndrome, well, I also agree with you. It's exciting that we have been able to show the proof of mechanism at least in the laboratory stage. And We have had a presentation at ADPD. We also have had one publication so far come out just recently, now in April. And there are some more steps that we can take before we would go in 2. And I would say we could go directly into Phase 2 here since we have so much learnings already about lekandemab. But Important for this patient population is to have a subcutaneous formulation, and that is one of the things that we are working on. That's why it still will take a bit of time before the clinical trials will start. But then I think we can start with Phase 2. So I hope that was answered to your question. Yes. Thanks very much. If I could just possibly ask a follow-up on the Early Blood, Brain and Barrier Technology. Is that technology something that you're open to license? It's just I know that certain other companies in neurodegenerative space have their own technologies, and It's becoming quite a hot field. So are you getting any interest from potential partners coming Do you to use that technology or is that something that you would be open to? Absolutely. Great question. And I mean, as you have heard me say before, I'm really excited about this technology. And I think that we have something which is really in the front run-in this area where we are competing with some big players as well. And what we are thinking about is, of course, several non exclusive licenses here. And I think the first step is to Start with a couple of our own, but then definitely we're open to discussions that we are all the time, if any big pharma I want to have collaborations with us and so forth. So that door is always open. But our approach is that we would like to start now with our 2 Internal Program. Okay. Thanks very much, Gunilla. Thank you. Thank you. Our next question comes from the line of Georgiana Amkruis from Redeye. Please go ahead. Your line is open. Hello, and good morning to everyone. My first question is about the article that was published yesterday. How did the study results from the B2B study inform the CLARITY AD? And I mean Exactly the endpoint, the design and the measurement. Why were they selected exactly in that way in the new CLARITY AD study? And what was learned from the 2b study? That's my first question. Excellent question. Thank you so much, Gergana. So of course, I'm very pleased to know that we now I've got the Phase 2b results published in Alzheimer Research and Therapy. And the Phase 2b trial was a specific study In order to, 1st of all, see that we have an effect confirm To see that we have an effect and a good tolerability profile and importantly select the right dose for Phase 3. So there are some really important learnings from that study that is being applied in Phase III, especially with regard to the dosing and patient population is the same as in Phase 2b. And that I think is very important. Then when there are interactions with regulatory authorities, They prefer CDR somber boxes as the primary endpoint. And CDR somber boxes was one of the clinical comes in the Phase 2b trial. But now in the Phase 3 trial, which is aimed to confirm the encouraging results of the Phase 2b. There, the primary endpoint is CDR Summer Boxes. And secondary endpoints are the other clinical scales like at ADAS COGS, the cognition scale and ADCOMS. And then it's also important to see that and to confirm that lekonimab is clearing amyloid from the brain and normalizing the amyloid levels in the brain and also confirm The good tolerability profile with a low level of the side effect area that we have seen so far. So I think that and then the difference is, of course, with regard to the design of the trials, the Phase 3 program is a very traditional study with 2 arms, placebo versus one dose of lekalimab. So and but I'm very pleased that the article is out, so everyone can see. And It's the same information as we have been providing all the time, which I also think is very reassuring. It's now peer reviewed Artigal, which is in great consistency with the communications that has been going on since the results came up. Thank you. And my second question is actually comes from a retail investor who wrote it to me. And yes, how do you think if the aducanumab and ilkanumab both get approval, How would then the market split or the because they both are promoted by the same company, how would it look like in terms of marketing and What if both aducanumab and lekanumab comes out on the market? Yes. How would it look like in terms of sales and marketing? So I think that first of all, this is a huge patient population. It's an enormous number of patients around the world who suffer from Alzheimer's disease. So there is room for many different treatments. And I think if we look at what we have shown with lecannamab is that we have a very consistent result in our Phase IIb trial On clinical outcomes, we have also seen that we have an early effect at 6 months, which will increase more and more over time And a dramatic effect in clearing plaques rapidly. Where we differ also In contrast to this earlier effect and so forth, it's on the side effect profile, where we have shown that we have a very low frequency of the ARIA and a very, very low frequency of any patients having any symptoms. So Lecanerab is the only treatment which can be given with a top dose directly without any Titration by giving the doses slowly titrated upwards like others. So I think that lekandemab is very well positioned no matter what other compounds that will be coming into the market. So I think definitely there is room for Different. And if you compare just aducanumab with lekanumab, lekanumab is the only one that really targets those toxic forms of amyloid, the protofibrils and clears those, whereas aducanumab has a slightly different profile and targets more the fiber. So but I definitely think there is room for several. Thank you, Camilla. Thank you. Thank you. There are no further questions at this time. Please go ahead, speakers. Okay. Then I thank you so much For your attention and for the great questions, and I wish you all a great day and stay safe.