Earnings Call: Q4 2020

Feb 4, 2021

Thank you, and welcome to Biotech's Full Year Report for 2020. I'm Gunilla Auswal, and I'm the CEO of Biotech. I will share this presentation today with our CFO, Jan Matlorn. 2020 was a very good year for Biarctic, in spite the tough situation around us with the COVID-nineteen pandemic. Our great project portfolio progressed well, thanks to our great personnel and our great partners. A site has during 2020 broadened the scope for lekcanumab BAN2401, and has now 2 Phase 3 programs ongoing. Yesterday, we also announced that the number of patients in CLARITY AG, the pivotal Phase 3 study has been increased to ensure a robust data set. We have also reported Further data from the open label extension study that continues to strengthen the support for lekamimab during the last year. Next slide, please. Biotic is listed on nastax.commidcap and this is our disclaimer. Next slide, please. Biotic is a unique Swedish biopharma company, and our aim is to improve life for patients with central nervous system disorders. When I say unique Swedish biopharma company, I mean that on 4 different aspects. The first one is that we are focusing on areas where there is a high unmet medical need. And that's areas like Alzheimer's disease and Parkinson's disease, where it today only have symptomatic treatments for the patients. And we focus on disease modifying treatment meant to affect the underlying disease. These groups of patients are huge and that is a large commercial opportunity. The second aspect is that we have a great organization with very experienced and engaged co workers and important fruitful collaborations with both universities and with our 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 all the way to Phase 3. We have partnered projects that generate revenues by milestones, where our strategic partners carry the cost for the clinical trials. And we have earlier fully owned projects with substantial marketing and out licensing potential. The 4th aspect is that we are well financed. We have a strong cash position of approximately SEK 1 on the bank or more than $120,000,000 We have valuable collaboration agreements with big pharma like Eisai and AbbVie at the value of up to SEK 8.7 SEK 1,000,000,000, about US1 $1,000,000,000 plus royalties if we come all the way to the market. So Biartic is a dynamic and very exciting company with a huge potential that I'm pleased to lead. Next slide, please. So I'll start with some highlights of the last year. We had significant progress in the projects, both in Alzheimer's disease and the rest of the portfolio. If we start with lecanumab, Eisai has presented new data from the ongoing Phase 2b open label extension at several Alzheimer Congresses last year. The latest one was at CTAD Congress in November. And this further strengthens the support for lakanumab, and I'll come back to that. The second aspect for lakanumab is The ongoing CLARITY AD study for early AD patients, where the Phase 3 pivotal program progressed well during the year. And I have to say that I'm really impressed with how Eisai has worked with mitigating the potential impact of COVID-nineteen on the study last year and continue to do so and put the safety of the patients first and also doing a lot of efforts to secure high data quality. The 3rd aspect for lecanumab last year was that an additional Phase 3 program was started and that is called AHEAD 345 started in September in collaboration with Alzheimer Clinical Trial Consortium. And this Phase 3 program. Here, lekcanumab is given to very early stages of Alzheimer's disease. In Parkinson's disease, AbbVie canceled the 2nd part of the Phase 1 program, the multiple ascending dose study with ABBV0805. 5, the Phase 1 program is still ongoing with single doses. And they are instead working on a detailed plan for Phase 2. And we think that was very good news that they are planning for Phase 2. If we look at our internal programs, They have also continued to progress well in spite of the COVID pandemic situation. And we have added 2 innovative projects to the portfolio and they are progressing really well now well underway. At the end of last year, we also won the Allbright Award for companies who are listed at Nasdaq Stockholm. They are being reviewed for how they work with gender equality and leadership and we were pleased to see that we won this award this year or for last year. Next slide, please. If we then focus on what happened during the Q4 of last year. Then BAN2401 got its INN name. So we now should say lekanimab, I will try to use that. And sometimes, I might slip and say BAN2401, but we mean Lekalimab. At the TTEC Congress, there were 3 different presentations. The first one was on Clariq AG, where Baseline characteristics of the patients were reviewed and compared with Phase 2. And importantly, they were consistent. And it's also representative of an early AD population. So that was really good news. The second one, Well, 2 presentations on the open label extension study, and they showed that first, There was a rapid decrease of clearing amyloid from the brain, where there was shown already after 3 months of treatment with lekanamab in the patients who earlier got placebo in the core study. And then a further continuous decrease was seen at 6 months and further after 12 months. The second aspect that was reported was that if you focus on the side effects And especially the Area E, which is like a brainerdemab, which mainly is seen on MRI scans. They still report a very low frequency of this side effect, which is consistent with previously reported in the core study. And this is one of the areas which differentiates Lekanenmad from other late stage competitors who have more Area E In spite of that, they have to titrate and give the dose slowly increasing upwards. Likandemab Does not need to titrate, we can give the top dose directly and still have less area A as shown in the Phase 2b open label Pension Study and in the Phase 2b core study. The next presentation also at the TTEC Congress was ahead C45. This study, ACTT presented the study design And also some baseline data on the first patients who were screened. After this period, I think last year was a really good year, and this year has also started in a very good way. It started with that we got a European patent granted for antibodies targeting truncated forms of amyloid beta. And yesterday, we had a press release about that Eisai has expanded the CLARITY AD study by approximately 200 patients. And this is in order to ensure a robust data set and mitigating that Some of the patients missed some doses during the first wave of COVID-nineteen pandemic situation last year. The recruitment has gone really, really well and the recruitment, including additional patients, have now been closed. And the screening phase is ongoing, and we expect randomization to be concluded during February. And Eisai, I'm really impressed with how they are driving this program. They still expect the 18 month readout in September of 2022. Next slide, please. Biartic has an attractive and well balanced project portfolio. We have organized it in 5 focus areas: Alzheimer's disease, Parkinson's disease, other CNS disorders, our Blood Brain Barrier Technology and Diagnostics. I think it's balanced in 3 different ways. We have several projects spanning from several projects in different areas. We have projects spanning from Discovery all the way to Phase 3. And we have a combination of fully financed partnered projects and innovative fully owned early programs. And our strategic partners finance the expensive clinical programs and refinance the less expensive preclinical phases where we can increase the value before partnering. During last year, we can notice that we have added a new Phase 3 program for lekanimab in a new patient population. We can also see the 2 new discovery projects that was added to the portfolio late the year before, and they have now started really well. So I think with that, we have a really attractive Project Portfolio. Next slide, please. A couple of words about our long standing and extensive successful partnerships. In Alzheimer's disease with Eisai since 2005, in this collaboration, we have had several research collaborations and 2 license deals. So far, we have received €65,000,000 and the total aggregated value of this is up to €222,000,000 There is still a lot left if the programs continue to book us well. And if we come all the way to the market, Biarctic, We get royalties of substantial value, could be like blockbuster revenues, which means that more than US1 $1,000,000,000 per year without any cost for the clinical program. And we also have the right to other indications outside of Alzheimer's disease. And we have also rights to commercialize Lekanema in the Nordic region. I think that Biartic has a great business model, which is shown in this case. It's also shown in the case for Parkinson, where we have a successful collaboration with Adriest in 2016. So far, we have received $130,000,000 out of the total aggregated value of the agreement of up to 7.55 $1,000,000 plus royalties, if we come all the way to the market. And if you think about this patient population, which also is huge and especially If you also add other indications like multiple systemic atrophy and Lewy body dementia, so this could also mean substantial revenues for Biotech if it continues to progress well. So it's 2 great collaborations that we are really, really happy about. Next slide, please. This slide shows the broad lekcanumab clinical program that Eisai is driving. So we start in the middle with the CLARITY AD Phase 3 confirmatory study, which is In early AD patients, which means patients with mild cognitive impairment and mild Alzheimer's disease. And this study is expected to read out, as I said, in September 2022 according to Eisai. And the new target of patients now is 1766 early AD patients. It's also in the same patient population, the open label extension study to the Phase linked to the Phase 2b study, which is ongoing in 180 patients. And here, we will see data. This is an open study. Data will be coming along continuously and being reported at Congresses. And the next one to look out for is ADPD. The new Phase 3 program, ahead 3 for 5, is then focusing on very early stages of Alzheimer's disease. And this is comprising of 2 sub studies, 2 sister trials, A3 and A45. And it's driven together with Alzheimer clinical trial consortium. And a total of approximately 1400 subjects are expected to be included. And this is then for preclinical asymptomatic subjects who have intermediate or elevated amyloid levels in the brain. The A3 program, There, the subjects have intermediate levels of amyloid in the brain. And here, the intention is to delay the brain amyloid accumulation by lekanimab. And in the A45 study, they have elevated levels of amyloid. And here, the intention is to reduce the risk of cognitive decline. I'm really looking forward to the progress of this impressive broad program that Eisai is driving in Alzheimer's disease. Next slide, please. So our early stage portfolio has also continued to develop in a very good way in spite of the COVID-nineteen pandemic situation. Of course, we work a bit differently, But so far, we have managed to progress our early portfolio without any noticeable disturbances. The largest area we have is Alzheimer's disease, where we have 4 fully owned disease modifying antibody projects. Each of those projects have different mechanisms from the others. And as I said a year ago, I think within the coming year, I will reveal Some more information about those programs, we have been very secret about them. And what we have told is that AD1801 It's a project which is linked to APOE, which is the most common risk factor of Alzheimer's disease. We have also just recently now disclosed that AD 1503, that project is linked to and have antibodies towards the truncated forms of A beta. These truncated forms are prone to aggregate and form toxic aggregated forms of amyloid beta. And our antibodies intended to bind to those aggregated forms and eliminate them. We have also then the early Parkinson program together with AbbVie and our new leverage generation program, as I said, has got a very good start. We are also preparing for Down syndrome in different ways. For example, there is a need for subcutaneous administration. So we have to wait a bit further until that is time, but we have to post the presentation at CCAD about Down syndrome, for example. Our efforts in the blood brain barrier technology platform is progressing really, Doing really, really well. I'm really excited about this part. And that's something for us to continue to talk more about at a later stage. Then diagnostics, which is really important also when you look at early stages of Alzheimer's disease and also to be able to both identify the patients and to follow disease progression. And here, the whole field are also doing some very interesting breakthroughs that we will also follow at the next Alzheimer Congress. So by that, next slide please, and I will hand over to our CFO, Jan Martin, for the financial summary. Thank you, Gunilla. For those of you that don't know us that well, I'd like to point out that we currently don't have any steady revenues, But has a business model focused on partnership agreements, which means that our financials are very much linked to milestones And the incomes related to research project with our partners. And with that said, let's start looking at our net revenues And operating results and my comments relate to the quarter's number, not the full year numbers. Net revenues were €8,000,000 for the quarter compared to €26,000,000 same period last year. And the change is Primarily related to lower activity in the Parkinson disease program and is according to plan. Looking at OpEx. Costs total costs are down €8,000,000 from €42,000,000 to €32,000,000 And this is mainly due to lower project Expenses compared to last year, although expenses in our road project increased during the same period due to higher activity. Moving to operating loss, it was down to minus SEK 13,000,000 in the quarter compared to SEK 21,000,000 In Q4 of last year. And just as for net revenues, this relates to lower activity in the Parkinson disease program. Our cost forecast for the coming 12 years 12 months, sorry, is in the range of 100 and €80,000,000 to €120,000,000 Next slide, please. Looking at cash and net result. The cash balance continues to be in good health and amounted to SEK1 1,000,000,000 at the end of the quarter. Our cash flow from operating activities was minus €25,000,000 compared to minus €54,000,000 in Q4 of last year. And the net result for the period was minus €13,000,000 And compared to minus €70,000,000 same quarter last year. And in summary, we continue to be in good financial shape. And with that, I hand back to you, Gunilla. Next slide, please. And then I will conclude today's presentation with some upcoming news and some closing remarks. Next slide, please. And now we are on Slide 14. So the upcoming news that we are looking forward To now is, of course, to say that lecannumab is progressing well. We're looking forward to the next Alzheimer Congress, ADVD in March, it's again a virtual congress and there are presentations on lecanumab. And also, Biotech has a poster on Down syndrome. And I think that The whole Alzheimer arena is, of course, evolving a lot. And of course, everyone is excited to follow the FDA decision on aducanumab, which now has extended review period until the 7th June. And the whole progress also with regard to diagnostics is also something that we look forward to follow at the ADPD Congress. In Parkinson's Disease, we look forward to the continued Phase 1 study that AbbVie is driving and the preparation for the Phase 2 program. So that will still take some time. The diagnostic area has great progress in the AD field, and I'm really eager to follow Blood biomarkers like a phosphatol 217, and I think this can really help the Alzheimer's feed if that continues to look as well as we have seen previously. So we are concluding that we have had a very good year, 2020, and we have very exciting times ahead. Next slide, please. So I'll just conclude today's presentation and say that Biarctic is built on great clients. We have great projects. It's driven by great people and everything we do is with patients in mind. We really want to help them to get better lives. Next slide, please. So by that, I thank you for your attention and we're happy to take some questions. Thank you. Our first question comes from Joseph Fedden from Rx Securities. Please go ahead. Good morning, and thanks for taking my questions. I have a few. Starting on your alpha synuclein Mab program, And you mentioned the single ascending dose study is ongoing. Have they given you any indication of The recruitment status of that and when we might expect to see results. And then in terms of The plans for Phase 2, have you had any interactions with Abdi at all on the design or the ongoing conversations on design and When we might see an announcement on that? Thank you so much, Josef. Great questions. So with regard to ABV-eight zero five, which is driven by AbbVie, the single ascending dose study is ongoing And it's looking really, really well is what I can say. I can't disclose details, but I can just say that it's going really well. And that they are preparing for Phase 2 and that will still take some time because I mean it's A lot of things to prepare when you go into a Phase 2 program. So I think just want to manage your expectations and say it will not Don't expect it before summer. So yes. And of course, we are engaged with that. That was your other question. Of course, we are. I mean, the way we work, it's they who are driving it, But we are working with joint steering committee, joint development committees and so forth. So of course, we are. Okay, great. Thank you. And then just staying on that program. We saw yesterday Biogen I sneaked into their results annual full year 2020 results that their program had failed in Phase 2. And I just wondered if you could remind us about how, 805 is differentiated from Biogen's sipainumab? Yes, there was some news yesterday and we really look forward to seeing more data. So the first one of the alpha's nucleon antibodies That had some Phase 2 data is Roche Trotina, and we're really looking forward to seeing more data on that program at ABPD. They seem to have had some effect on the movement part of UPDRS. So I'm really looking forward to see learning more from their study. I'm also eager to understand more about the Biogen Phase 2 study. I think it's important to understand that each antibody is different. Each is unique. They are all targeting alpha snuckling in different ways. And what we believe is that we have the most selective antibody. We're selectively targeting the protofibrils oligomers of alpha synuclein. And this is really important not to have too much binding to monomers because then it can be sequestrated in the periphery. So we are eager to learn more about the other competitors and our Phase 2 programs and to understand what learnings we can draw from that. The same approach has been in Alzheimer's disease for many, many years, where we have learned a lot in the different clinical trials. And eventually, we now have seen, for example, lecanumab, who has had really Encouraging results in Phase 2. Just curious, is there the same kind of evidence in Parkinson's disease As in Alzheimer's disease, the oligomers and protozibils are the most neurotoxic and therefore, potentially the best to target with an antibody Or is it more a case in Parkinson's that you do get sequestering of the antibodies by monomers in the blood? No, I think I mean, our belief is strongly that it is the protofibrates with the most toxic part. And that's why our focus has been to have very selective antibodies targeting the toxic protofibels in the brain. So we have a very similar thinking on that aspect between 805 and lecandemab. That is the toxic protofibrils that we are targeting. And here, we differ a bit from some of the competitors. Okay, great. That's interesting. Thanks. And then just perhaps one on the finances. You issued OpEx guidance today, Slightly lower than we were expecting for this year. Does it assume that any of your proprietary projects are going into clinical trials this year? I think the guidance we can give that don't expect any of our internal programs to go into clinical trials this year. Okay. Thanks very much, Camilla. Thank you. Thank you. Yours are great questions. That's all, Whit. Thank you. Our next question comes from Guggena Almqvist from Redeye. Please go ahead. Hello. I have a question about the Few compounds in discovery stage still, the one for which you got a patent, the AD1503, what's the mechanism How is it different from lekanamab and also about the 1801? Could you elaborate the difference between these mechanisms of action? Thank you so much, Egona. It's a truncate. Yes. I tried to Google it and search it, I couldn't find anything on the topic. No. And we are Deliberately quite still secretive about what we are saying since it's a very competitive area, as you know. Okay. So If we start with AD-fifteen oh three, where we also revealed that we have got The concept patent for the truncated A beta antibodies approved by the European in Europe. So I think that this antibody targets the truncated forms of amyloid, which are very prone to aggregate and form protofibrils and fibrils and plaques. So our antibody binds to the truncated forms in this respect. And Lilly's antibody, Donanimab, has to some extent some similarities with this form. And they show the positive Phase 2 results now 11th January. So we have some similarities, and we believe that we also have some important differences that I'm not going to reveal. So I think that's an exciting program that we are progressing further. The other program that we also have revealed a bit about our Target is AG1801, which is linked to APOE. And APOE is the most common risk for Alzheimer's disease patients. And this is also a hot target, if you will. So I'm not going to reveal any details more than saying that our antibodies are linked to, I can say the fragments of amyloid beta, but of APOE fragments of APOE, which are toxic. More than that, I'm not going to reveal. But I think it's important to understand, I mean, we have lecanumab. Of course, we strongly believe and stand behind lecanumab. But there is a huge population out there who desperately needs more and better medicines. And there is a desperate need for disease modifying treatment. So our aim is to continue to develop Further disease modifying treatment with different mechanism of action, so we can provide different options for the patients and also opportunities for combination therapies in the future. So I think it's really, really important even though we see very encouraging results now with, for example, lecannamab. It's really important that the whole field, including Biotech, continues to drive new innovative treatment as well. So we as you know, we have 4 different programs and we have now revealed 2 of those mechanisms. Okay. Thank you. Thank you, Geigerama. Thank you. Okay. There appears to be no further questions. So I'll hand back to the speakers for any other remarks. And I just want to say thank you very much for your attention and thank you for great questions. And I wish you a great day and stay safe.