Earnings Call: Q3 2021

Oct 21, 2021

Hello, and welcome to the BioArctic Webcast with Teleconference. Throughout the call, all participants will be in a listen only mode and afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present CEO, Gunilla Oswald and CFO, Jan Mattson. Please go ahead with your meeting. Thank you, and good morning, and welcome to Biotic's 3rd Quarter Report 2021. I'm Gunilla Oswald, and I'm the CEO of Biotic. I will share this presentation with our CFO, Jan Matsson. I think it has been a great quarter for Bioartic and Lecanumab. Our partner Eisai, after discussions with the U. S. FDA, initiated a rolling submission for an accelerated approval for lecanumab in the U. S. If it gets approved, lecanumab could thereby potentially be helping patients even earlier than previously expected. And I will talk more about that in the presentation here today. Next slide, please. My Arctic is listed on nastax.comincap, And this is our disclaimer. Next slide, please. Bioartic is a unique Swedish biopharma company with the aim of improving lives for patients with CNS disorders. When I say that I think it's a unique company, I base that on 4 different areas. The first one is that we focus on R and D of innovative treatment for brain disorders with high unmet medical need, like Alzheimer's disease and Parkinson's disease. These diseases affect large patient groups and their relatives, and it comes with large cost for society. Today, there are only symptomatic treatments available, and we work on disease modifying treatment affecting the underlying disease and slowing down The decision progression. The second aspect is that we have a great organization with very experienced and engaged coworkers and important fruitful collaboration from universities and our 2 strategic partners, Eisai in Alphamet Disease and ABZY in Parkinson City. The third aspect is that we have an attractive and well balanced project portfolio with projects from early discovery all the way to late stage Phase III and now even in the regulator process. We have partnered projects that are generating revenues by milestones and where our strategic partners carry the cost for the clinical trials. And we have then the fully owned project with substantial marketing and out licensing potential. The 4th aspect is that Biotic is well financed, and we have a strong cash position with close to SEK 900,000,000 on the bank, which is approximately US100 $1,000,000,000 We have valuable collaboration agreements with big pharma like Eisai And see at a value of up to SEK 8,900,000,000 plus royalties if we come all the way to the market. I think that Biotic is a dynamic and very exciting company with a huge potential. And our most advanced program has Initiated the regulator process towards market approval. And at Biotic, we have started to build a commercial organization. Next slide, please. As I said, that My Arctic has an attractive and well balanced portfolio focusing on brain disorders. Alzheimer's disease is our largest area. For lecannamab, which is our most advanced program, our partner Eisai has Now initiated the regulatory process in the U. S. In parallel with the 2 large Phase 3 programs. And even if this is the first step for disease modification treatment to be successful for Alzheimer patients, There is still a large medical need for more treatment options and for combination of therapies. Therefore, it's very important that we continue with our other early programs. And at Bioartic, we have 6 early disease modifying programs for Alzheimer's disease, of which 2 of them have been combined with our brain transporter technology. In Parkinson's disease, Our partner, AbbVie, recently presented encouraging results from the Phase 1 program. And I'll talk a little bit more about that here today as well. And I'm pleased to see that our whole portfolio is progressing really well. Next slide, please. We have 2 long standing successful partnerships with Eisai in Alzheimer's disease since 2,005, And Eisai are very committed to dementia and to lekanimab. We have so far received EUR 66,000,000 And we have an ongoing research collaboration with Eisai, which was recently prolonged. We have a total aggregate value of agreements of up to EUR 222,000,000 with Eisai. There is still a lot Left if the program continues to progress well. And if we come all the way to the market, we will be able to get substantial royalties. So that could be like blockbuster revenues for Biotech, which means more than US1 $1,000,000,000 per year without any cost for the clinical program. And Bioethic, we also have rights to other indications outside of Alzheimer's disease, and we have tried to commercialize daclanumab in the Nordic region for Alzheimer's disease. And that's something that we have started to prepare for and we are really looking forward to. In Parkinson's disease, we have a successful collaboration with Ample since 2016. We have so far received $130,000,000 out of the total aggregated value of up to $755,000,000 So there is also here a great possibility to get more substantial milestones and if we come all the way to the market, substantial royalties. As we have mentioned that they will start with Parkinson's disease for ABOV-eight zero five, But they are also looking into other different potential indications, like multiple systemic atrophy and dual body dementia. So this could also lead to substantial revenues for Biotic if it continues to progress well. So in summary, I think that we have 2 great partners with successful collaborations, and I think we have a great business model. Next slide, please. So if we think about this quarter 3 this year, I think it has been an exciting quarter where our partner, Eisai, has agreed with the FDA to submit the BLA for lecanumab as a rolling submission, utilizing the accelerated approval pathway. And I will talk more about that in just a minute. At the latest Alzheimer Congress, AAIC, in July, EISA had several presentations on lecannamab. Data continue to support what we have seen previously. Importantly, a rapid and profound clearance of amyloid deposit from the brain and also importantly, continued low frequency of the side effects Area E. At this occasion, it was also the first time that Eisai presented some clinical efficacy data from the Phase 2b open label extension study. And those data support the efficacy that has been seen in the Phase 2b study. Furthermore, Eisai presented blood biomarker data, which mirrors the amyloid petrocell. And this could then potentially be a convenient way to monitor the effect of lecanumab in patients in the future. In September, as the Movement disorder, Parkinson Congress. AbbVieck, for the first time, presented data from the Phase 1 program, showing very encouraging results with a good safety and tolerability profile and a half life of about 30 days supporting a once a month dosing. In addition, Biartic presented preclinical data on EBV0805, showing that the antibody Has a very strong preference for binding and eliminating the aggregated harmful forms of alpha synuclein, while sparing The alpha cyclin monomers, which has important physiological function. During this quarter, BioArctic has also taken The first step in building a Nordic market organization in order to prepare for a potential launch of liconamil. The introduction of new drugs require careful preparation in order to provide the right patients access to pre treatment. And we are therefore pleased that Anna Kaja Gremnlaz, who previously was General Manager of Sanofi in Sweden, and have taken the position as a Chief Commercial Officer to lead these efforts for Biotic. Our confidence in lekanamab is the driving force in this initiative, of course. But we also see that other But drug projects at Biotic could benefit in the future from establishing a marketing organization in the Nordic region. Next slide, please. So now a bit more focus on what has happened with regard to lukanumab during this quarter. So based on the breakthrough therapy designation, which the FDA granted lekanumab in June, Since then, Eisai has interacted with the FDA to seek the most optimal regulatory pathway. They have agreed 3 important things. The first one is to submit the BLA for Lekanumab as a rolling submission. This means that Eisai will submit Completed sections of the application on a step by step basis, which can be reviewed by the FDA on a rolling basis. The second one is that they agreed to use the accelerated approval pathway, which is based on clinical efficacy and biomarker Market data and safety data that is already available. So this is primarily based on the comprehensive Phase 2b study in 856 patients that was concluded during 2018. Data from the ongoing open label Phase 2b extension study and blinded safety data from the ongoing CLARITY AD Phase 3 study will also be included in the application documentation. In other words, the FDA does not need the clinical efficacy data for from CLARITY AD for an accelerated approval. The third important thing that they agreed Was that the results from the Phase 3 CLARITY AV study can serve as the single confirmatory study to verify the clinical benefit of leucanumab. So I think that this was really great news for naclanavab and for Biotech. Next slide, please. Our partner Eisai is strongly committed to lekcanumab, and they have a broad program and now with 4 clinical studies underway. Clarity AD, which probably is the most important one right now, is the Phase III confirmatory study in early Alzheimer's disease patients. The study is progressing really well, and patient enrollment was completed in March this year with 1795 for early Alzheimer patients. ASI is targeting to have the 18 month data available in late September next year. The Phase 2b openly label extension study is ongoing in early Alzheimer's disease patients, and new data here is coming along continuously since This is an open study, and data will be reported at Congresses. And the data we have seen so far further strengthened the positive Phase IIb results, and we look forward to future congresses with more data coming from this study. The other large Phase 3 program is called AHEAD-three forty five, and this is compromising on 2 sub studies, A3 and A45. And this is driven by Eisai together with Alzheimer Clinical Trial Consortium And a total of approximately 1400 subjects around the world will be included in this program. This program is intended for preclinical asymptomatic Alzheimer's subjects. Maybe we can call them pre symptomatic AD subjects. They have intermediate or elevated amyloid levels in the brain. The program is aimed at evaluating the therapeutic effect of lucanumab on the progression of the disease. Then the news for this quarter is that Eisai has Recently initiated a new clinical study for a subcutaneous formulation of nikanumab. And I think this is an important alternative for the patient, which can make the administration of licanumab more convenient for patients. We are really looking forward to the progress of this impressive broad program that Eisai is driving in Alzheimer's disease. Next slide, please. I think there has been a lot of progress in the altoamify field this year, which is looking very promising for the patients. If we start with the diagnostics area, the blood biomarkers are continuing to progress quickly and will be important to facilitate diagnosis and possibly also important to follow disease progression in Alzheimer patients. If we then turn to treatment. The first Disease modifying product was approved in the U. S. By the FDA. And that was Biogen's Aduhelm, which is an antibody against amyloid beta. And this was approved in June by an accelerated approval with further requirements by the FDA. The decision was based on very complex data from 2 early terminated Phase 3 studies and on biomarkers that are reasonably I think it's important to understand this, and it was not based on proven clinical effect. And that is needed in order to get the full approval. And I think that to start a new study in this It will take several years to get those results. Following the U. S. FDA's approval, Lecanumab as well as lilystonanumab and Roche gantenerumab have all 3 been granted breakthrough therapy designation by the today. And this is based on the encouraging biomarker data. And out of these 3, Lecanumab is so far the only one which has initiated a submission to the U. S. Authority. Going forward, it will be interesting to see how other regulatory authorities in other regions will respond to the advancement of the field. And I think it's important to understand that the regulatory requirements are a bit different at different regions. For example, we expect that in Europe, the CHMP will shortly come with its opinion of Aduhelm. And their statement will, of course, guide on what data that will be required for an approval in Europe. I just want to point out that from our perspective, Both the negative and the positive opinion for Aduhelm could be good news for Biotic. If we start with the potential of a negative opinion for Aduhelm, Then that could lead to that lucanumab potentially could be first in line for an approval in the EU, of course, pending a positive Phase 3 results. And those data we will know about this time next year. A positive opinion on the other hand would help to pave the way for a possible future launch of Lecanumab. So I think in both cases, Lekanumab stands on its own merits, and we are impressed with Eisai's work to ensure high quality data for future Leccano observations. Next slide, please. Now we are moving and turning to ABV-eight zero five, a potential disease modifying treatment for Parkinson's disease. As I just mentioned, a highlight for us at Biotech was that several presentations were held at the Parkinson Congress in September, and all giving strong support for further development of ABBV805. Just want to point out a couple of things. And one is that the high selectivity or more than 100,000 is a differentiating factor for EBITV805 versus competitors. We have previously shown a very strong preclinical proof of concept data And news in our presentation at the Congress was also then that we have been able to show 805 Has a strong binding to the target in the brains of our Parkinson patients. And as we presented Phase 1 results, which supports Phase 2 development with dosing once monthly. Next slide, please. I just want to mention that in addition to lecanumab and EBBB-eight zero five, our broad early clinical stage portfolio Continues to progress well. Next slide, please. So by that, I hand over to Jan Maastricht for the financial summary. Thank you, Gunilla. For those of you who don't know Biooptix so well yet, I'd like to inform 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 very much linked to milestone payments and their income is related to research projects with our partners. With that, let's start looking at our numbers and my comments relate to the quarter's number. Net revenue were €4,000,000 for the quarter compared to €11,000,000 in the same quarter of last year, the major part of the revenues derived from the research collaboration Agreement that we have with Eisai. Looking at OpEx, total costs amounted to SEK 42,000,000 in the quarter compared to SEK 32 SEK 2,000,000 last year. And operating results amounted to minus SEK 37,000,000 in the quarter compared to minus SEK 21,000,000 in last year. And we have lowered our expenses outlook for the current year with around SEK 10,000,000, thanks to a more efficient work in the projects. But going forward, costs will increase as we start building a commercial organization and as we further progress our expanded portfolio. Next slide, please. Looking at our cash and net result. The cash balance amounted to SEK 892,000,000 at the end of the quarter. Our cash flow from operating activities was minus SEK 35,000,000 compared to minus SEK 9,000,000 in Q3 of last year. The net result for the period was minus €38,000,000 compared to minus €21,000,000 same quarter last year. And in summary, we continue to be in good financial shape. And with that said, I hand back to Daniella. Thank you, John. So I will finish with some upcoming news and some closing remarks. So if we go to Slide 16, please. If we look at Alzheimer's disease, Eisai are progressing the brewer's clinical program with lekanamal. And data with lekanamal will continuously be presented at international congresses. And the next one we are looking forward to is CTAD in November. This will also be a hybrid meeting, partially virtual and partially on-site in Boston, where our founder, Professor Lars will be presenting data comparing lecanumab with late stage competitors. And lecanumab will also be included in several other presentations. So this is definitely something we are looking forward to. And after this congress, the next important congress For us, it will be ADPD in March. And we are also looking forward to when we can provide more Information to you, for example, on some of our development programs in the not too distant future. So next slide, please. I just closed today's meeting by saying that BioArctic 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. Our aim is to help patients with brain disorders, and I really think that we are on our way to help of Alzheimer patients. Next slide, please. So by that, I say thank you for your attention, and we're happy to take some questions. Thank you. And our first question comes from the line of Joseph Hagen from Rx Securities, please go ahead. Your line is open. Good morning and thanks for taking my questions. I've got 2. On the first one, the report today is talking about the ramp up to commercial operations in the Nordics for the first time and the hiring of a Chief Commercial Officer there. Could you just perhaps Go into a little bit more detail please about your expectations for the commercial team, And I think it's an important great first step that we have recruited Anna Kaja Gramblad with all her experience and in having done many, many launches in the Nordic region. So I think that we are I'm so Happy that we have recruited her. Then we will, in not too long time, come back with more information about our next steps In how we are going to build this organization a bit further. So I will not reveal much more information today more than saying that we are extremely happy with this that she is now working full time for us and started to build the organization. So I will come back on this, Jota. Okay. Thanks. And second question, we've seen Biogen results yesterday and very sluggish uptake of Aduhelm. And that's really because of the absence of a coverage decision from Medicare. And that's due to happen January on the final decision in April. And it's interesting to see that their decision relates to the whole anti amyloid Mad class presumably affecting the Cana. Therefore, I just was wondering what your understanding of that process is Any expectations you have? Because this seems like a key decision that doesn't just affect Pagitel. I think, I mean, the benefit here is that there are 4 different programs that all support each other in one way. Of that, all 4 have shown that you can take away amyloid deposits from the brain. 3 of them have also shown clinical efficacy signals. And all 4 have shown that they have the side effect area E, where lekannumab then has shown that we have The lowest frequency of considerably lower frequency of Area E than the others. I think that it will, of course, be important when they Take this as a class decision to look at all data together. Otherwise, I will not comment more details about this. But of course, this is an important part for all Alzheimer patients and future treatment. Okay. Thanks, Gunther. Thank you. Thank you. Our next Question comes from the line of Erganger Alquist from Redeye. I also have two questions. My first one is about the European submission for lukanumab. When do you think we will hear news on that? I wish I could tell you, but I can't. So I think Until Eisai communicates something with regards to Europe. But I just want to point out that U. S. And Europe have different Regulatory processes. So it's not the same in the U. S. As in Europe. Okay. So that will be probably The Phase 3 results are I will not comment. Okay. And my next question is on the Parkinson's project. We were wondering about the Phase 2 initiation. When do you suppose that will be? Or I wish I could tell you. I wish I knew. What I can say, I think it's I'm great I'm really pleased to see the data from the Phase 1 program and that we presented very strong encouraging preclinical data And that AbbVie had 2 presentations now in September, where they are stating that The data supports progressing in Phase 2. And I am as impatient as you are, and I'm just looking forward to when we know more about the next steps. Okay. And actually, a third question. I want to know what the pipeline Of those projects which are now in research phase and about to enter clinical, which one do you think has the most I mean, which one has more potential? As you know, I'm very excited about Our whole portfolio as such and that we are taking such a broad commitment in Alzheimer's disease with several different mechanism of actions in order to give the patients an opportunity for several different treatments and also an opportunity in the future for combination. So I think that is an exciting part. And definitely, now that we can see that we can combine it with our brain transporter Technology, which you know I'm very enthusiastic about. And to see that it has progressed as far that we now can start to link this to our internal program. Then of course, as that so I think I mean, I just want to say that the brain transporter technology, That platform, I think, has enormous potential because it can, of course, be combined with our internal programs, but also with Potentially doing several nonexclusive licenses in the future to help other antibodies or proteins To come better into the brain, could also be like brain cancer and other things. And then I just also want to mention MD-three thousand and fourteen, Which I'm also very excited about. And we'll see when we can come back with more information about that, which is a bit different than the other one. Okay. Thank you very much. Thank you very much, Gabriela. Thank you. And since there are no more questions registered, I hand back to our speakers. Thank you. Have a great day.