Welcome to the Biovica International Audiocast with Teleconference Q2 2021. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question-and-answer session. Today, I am pleased to present Anders Rylander`, Cecilia Driving, and Henrik Winther. Please begin.
Thank you very much, and hello and welcome everyone to the Biovica second quarter interim report, a quarter that ended in October, for us. If we move to slide number 2, we have the list of the presenters today. My name is Anders Rylander. I am the CEO of the company, and together with me, I have Cecilia.
Hello, everyone.
Being the EVP and CFO of the company, and Henrik Winther, our SVP Business Development and Clinical Development. Henrik.
Hi, everyone.
If we continue to slide number three, the agenda, I'll just give a very short introduction about the company and what we do. We'll go through the different highlights during and after the quarter. We'll give an update about the FDA process, and Henrik will go through some of the clinical development and results that occurred during this quarter. Cecilia will then go through the financial part of the report, and then I'll just summarize and open up for a question and answer session. If we move to the next one, slide number four, the short introduction to Biovica is that we focus on developing biomarker assays, blood-based biomarker assays, in order to monitoring targeted cancer treatments in order to, of course, improve the monitoring process.
We have in several clinical trials proven the effectiveness of the product and how it compares to the current ways of monitoring these patients. This is something that Henrik will also cover a little bit in his presentation. Of course, the better and more personalized monitoring will be beneficial, especially for patients being on treatment, but also healthcare providers and payers will of course benefit from that as well. Our initial focus area is the metastatic breast cancer area and monitoring of patients within that area under treatment. There's an unmet demand also outside of that area, and we have the ambition to expand the use outside that area. We also have proof of concept data supporting the test works well also outside the initial area.
If we move to the next one, slide number 5, there's a slide that describes how this is done. We do it with our product DiviTum, which stands for dividing tumor, and we combine the blood sample from the patient with our unique assay, the reagent. There's a reaction between the blood sample and our reagents. From that, you can get a readout, a measurement of how the tumor is or tumors are proliferating. As you all know, cancer is defined as uncontrolled cell proliferation.
That way, you get an important information about the aggressiveness of the disease, but also if a patient is monitoring during treatment, and the treatment is supposed to inhibit the cell proliferation. We've shown in clinical trials that you can do that and get feedback if the inhibition works as planned. We've also in several clinical trials shown that you can get feedback already two weeks into treatment, and the baseline value before treatment also has a prognostic value. This is of course a great advantage compared to the current method being used as standard method, which is imaging diagnostics, where you are comparing the size of the tumor before and during treatment, which requires several months before you can do follow-up.
It's also costly, it's invasive and requires some patient logistics, which is simplified with a simple blood test like DiviTum. That's very short about the product and how we intend to use it. If we move on to the next slide, there's a summary of the significant events during and after the quarter. One important thing is with the U.S. being our initial and our largest single market, there's a lot of focus on preparing for the upcoming launch on that market. For that, Warren Cresswell has started as President of Americas, being responsible for the launch of DiviTum on the U.S. market and to build an organization in order to do so.
Warren has vast experience within this area, both as the CEO for Prometheus, a company within the GI, gastrointestinal, testing, but also within Dako, where he were commercially responsible for several markets within the diagnostics and oncology area. I'll also give an update about the FDA process on a separate slide, and Henrik will cover the areas regarding clinical development and the results that we have presented during this period. I'll also comment the budget impact model that has been presented or has been published on a separate slide. Let's go into the next one, slide number 7, to talk about the FDA process.
The FDA process started seven years ago, the 510(k) classification or the feedback from the FDA was that we should use a 510(k) process based on the classification of our product. A product that is cleared, 510(k) cleared is allowed, then you're allowed to market the product for clinical use on the U.S. market. That's the reason behind our application. It started since 25th of September, but it's actually 25th of September in 2020 when we submitted our application after being involved in discussion with the FDA since the start was in 2017, actually, when we got the classification and the guidance which process to use.
We have also done several pre-submissions to get feedback on both analytical, that is the performance validation, and the clinical validation. A lot of work had been put into that application that was submitted a little bit more than a year ago. As you see to the left, the FDA have a very structured process, and we quickly passed the first two steps before the FDA announced the COVID pause that was caused by them reallocating resources to focus on COVID applications. The process was then restarted in January, which we were very grateful for because it was a lot of processes that had to wait a lot longer than that.
In practice, we did not receive any feedback until end of May. Since then, we have been working with the FDA in order to resolve the open questions that was raised in end of May. As you see, this is a lot slower than their common process, their standard process, where they have days that they need to live up to and also that the applicant needs to live up to. That is now not. They're not committing to that process due to the situation with the pandemic situation. That's also why the process has been so much slower than what it normally is.
During the summer, we could resolve most of the questions raised by the FDA in our application. As there were just a few remaining questions, it was decided that we will go into an interactive process. Since then, we have continued the discussion and resolved most of the questions. We have been given informal feedback. We are now waiting for the formal feedback because that's a precondition from the FDA that we should get that before we summarize and update our submission and send it back in. It's been a couple of months here where we have been waiting for that input so we can complete this process. The FDA had the ambition to provide it during November, and it didn't happen.
We believe it will hopefully come pretty short, now into December, and so we can complete the submission, and continue the process and hopefully get clearance pretty soon. The advantage for us with this interactive feedback is, of course, that after submission, the question should have been cleared out of the discussion, that part of the process should be quicker. So that's the rationale for an interactive process from the FDA side. So that's actually the status. Of course, the challenge here for us is that it's less predictable than the normal FDA process. Of course, this is a situation caused by the pandemic situation. Okay.
If we move on to the next one, we are on slide number 8, and we have the introduction to the clinical development area. Henrik, maybe you can take over here.
Absolutely. Thank you, Anders. During the next 12, 15 minutes, I'll take you through some very exciting and important achievements we have had within the clinical development area during our second quarter. The topics I'll cover, they will include the BioItaLEE study, which was presented at ESMO in September. DiviTum TKa results from the published SWOG trial, and this is not the clinical validation data, but additional data from the SWOG analysis. I'll also look into the 3 studies with DiviTum TKa to be presented at the upcoming San Antonio Breast Cancer Symposium in Texas. Then finally, I'll dive into the initiation of the TK IMPACT study, which we do together with Washington University in St. Louis. Next slide, number 9, please. Okay.
Let's start by looking at the TKa results from the Novartis BioItaLEE study presented at this year's ESMO Congress, which as I said, you know, took place mid-September. This was an independent study undertaken by Novartis Italy, and it showed TKa's ability to predict, and only two weeks into CDK4/6 inhibitor treatment, which patients will do excellent on this type of treatment. Three different TKa patterns were identified, and it was actually the same three patterns we observed in the PYTHIA study, which we presented last year. Remember, BioItaLEE is Novartis ribociclib, whereas PYTHIA was on Pfizer's palbociclib. It's just showing that we in TKa have a generic CDK inhibitor biomarker. Now, looking at the three patient TKa patterns, as you see here. Pattern number three, the top red line, is where there is no treatment effect and hence TKa stays high.
This indicates a tumor that's completely resistant to CDK4/6 inhibitors, and hence patients have a very short progression-free survival. You can see in BioItaLEE, progression-free survival was only 10 months, and in PYTHIA, even shorter with only 5 months. In pattern two, the yellow line, TKa drops to an extreme low level at day 15 of CDK4/6 inhibitor treatment. There's a rebound in TKa level when drug treatment is paused, representing the tumor dividing again during that 1 week of drug holiday. These patients do fairly well. As you can see, they have median progression-free times of more than double the pattern three patients in both PYTHIA and BioItaLEE. The pattern one patients, the blue line, also undergo a complete drop in TKa level on day 15 of CDK4/6 inhibitor treatment.
This TKa level is more durable and does not appear to be impacted during the drug holiday, as we saw for pattern 2 patients, indicating tumors that are fully responsive to the CDK4/6 inhibitor treatment. This patient group, the blue line here, shows that pattern 1 patients have the longest median PFS or progression-free survival times, 17 months for PYTHIA and not reached for BioItaLEE after 27 months of follow-up. These patients certainly have benefit from CDK4/6 inhibitor treatment. In essence, we have a strong biomarker, TKa, that can predict a patient's response to CDK4/6 inhibitor treatment by help of only 3 measurements. Next slide number 10. The key conclusion from the BioItaLEE study is that TKa is a very strong predictive and monitoring biomarker for personalized medicine, also called a companion diagnostic or CDX biomarker.
A persistent suppression of the TKa biomarker identifies those patients who will have the greatest benefit from CDK 4/6 inhibitor treatment. Today, most companion diagnostic assays are used upfront to select patients for a specific treatment. We believe DiviTum TKa has the potential to become a monitoring CDx or companion diagnostic, deciding on the continuation of a CDK inhibitor treatment. As I believe we have mentioned before, the companion diagnostic area has a very attractive business model to diagnostic companies because you enable product development fully funded by pharma while you still keep the ownership of the products. Next slide, number 11. Another study you might have heard of is the SWOG S0226 trial. We used samples from this study to perform our clinical validation study used in the 510(k) filing sitting with FDA, as Anders just mentioned.
However, the SWOG team also undertook a broader scientific analysis of TKa on the S0226 samples, and in September, they published their results in the high-impact Clinical Cancer Research journal. One of their key findings was the ability of TKa at baseline, meaning before treatment is initiated, to predict whether patients would best benefit from an aggressive combination therapy, which means endocrine therapy combined with a CDK4/6 inhibitor, or a less aggressive monotherapy only using endocrine treatment. This is yet another example of TKa as a predictive biomarker for making decisions with regards to treatment. Next slide. Jumping to the most recent TKa results announced to be presented at the upcoming San Antonio Breast Cancer Symposium here in December. This year, we have three studies in which our DiviTum TKa is being applied as a predictive and monitoring biomarker.
Now, the PROMISE study together with Mayo Clinic, and the PROMISE study was originally a genomics biomarker study in hormone receptor-positive metastatic breast cancer patients. DiviTum TKa is included as a non-genomics biomarker to evaluate the potential of TKa as an informative biomarker. Interim results on about 30 patients were reported at last year's San Antonio meeting. This year, confirmatory results are reported on additional 30 patients. TKa is shown to be predictive for progression-free survival at baseline, again, meaning before actual treatment is initiated, and this is for patients who undergo first-line treatment with a CDK 4/6 inhibitor plus endocrine treatment. Again, it's data illustrating the use of DiviTum TKa as a biomarker suited for personalized medicine guidance.
In the second study at San Antonio, Carrick Therapeutics, an Irish pharmaceutical company, is using TKa as a monitoring tool during their development program of next-generation CDK inhibitors. Carrick's latest CDK inhibitor has been designated Fast Track at FDA. DiviTum TKa has been used in several studies together with Carrick, and data clearly indicates that TKa dynamics and DiviTum's predictive and monitoring capabilities also work for the new CDK inhibitors. In fact, we are actually experiencing an increased interest and demand in TKa testing service to pharmaceutical companies developing these next-generation CDK inhibitors. Actually, we are even getting requests from pharmaceutical companies developing other types of drugs, but drugs which are to be used in combination with CDK inhibitors. You could say that DiviTum TKa has really become a preferred tool in the monitoring of CDK inhibitor treatment.
Finally, additional results from our budget impact model of DiviTum TKa in clinical use will also be presented at San Antonio, and Anders, he has a separate slide on this later on.
Yeah.
Next slide.
Next slide.
I have one more. No, that's me. I have one more.
Okay.
Yeah. Then you will come back.
Sure. Number 13, the TKa IMPACT slide.
Super. Thanks. Apart from TKa's monitoring strength in relation to CDK4/6 inhibitor treatment, we have earlier in the PALOMA dosing study demonstrated DiviTum TKa's monitoring ability to identify metastatic breast cancer disease progression significantly earlier than imaging exams, on average, actually 83 days earlier, and in some cases, even 6 months earlier than imaging. Based on these important data and the fact that reduction in imaging exams has been identified as a huge unmet need by oncologists and payers, we have, in this second quarter, signed an agreement with Washington University in St. Louis, and we have also initiated the TKa IMPACT clinical trial to prospectively show TKa as an alternative monitoring tool to imaging. This study will monitor 55 metastatic breast cancer patients receiving CDK 4/6 inhibitor treatment during first-line treatment.
Should also mention that we have the option to actually expand the number of patients in this study. The study is registered on clinicaltrials.gov, where you can collect more detailed information if you want to. Handing back to you, Anders.
Thank you, Henrik. If we move on then to the next one, slide number 14. I have a slide about another topic being presented on the upcoming San Antonio conference, the world's largest breast cancer conference later this month. It's our budget impact model. It has been previously presented also at ISPOR, a more targeted conference towards health economics. The model has also been published in the Journal of Medical Economics. Of course, a publication that has gone through peer review further strengthens the evidence. The work has been performed by researchers at the Fred Hutchinson Cancer Research Center and the University of Washington, not to be mixed with the one in St. Louis that we do the TKa IMPACT trial.
The model shows is based on the clinical data that Henrik briefly covered, and it shows the value, the health economic value of DiviTum and within two areas. One is reduction of monitoring costs. The other area is a reduction of futile therapy by discovering progression sooner using DiviTum, which has been supported by the results from clinical trials. To summarize the economic benefit, for every dollar spent on DiviTum, the savings will be three times that.
This is of course very important information for us moving on in the commercial process launching the product since we are aiming of course to get included into the reimbursement system and want to be able to argue and prove the value the product can contribute to when we are discussing the price for the product. In the analysis or in the model a price of $400 per test has been used. You can say it also validates the price levels we have been communicated earlier as well. That was it for the budget impact model. If we move to the next one slide number 15 we move into the financials of the report. Cecilia could just please take us through that.
I will do that. Thank you, Anders. So we started with looking at the accumulated sales, and we have the net sales for the second quarter. It's SEK 268,000, and compared to last year, it's a big increase from SEK 44,000. For the half year, you can also see an increase. Going back to what Henrik said, that we see an increasing interest from pharmaceutical companies, this is exactly that kind of sales because it's research use only. Since we haven't launched to the clinical market yet, it's only research use only sales. It's to CROs and pharmaceutical companies. We expect the sales to keep on increasing during this year, but will still only be research use only sales if we don't get that approval very soon.
But it's still increasing, and we are glad for that. We turn to the next slide 16. Here we have the cash balance, and we ended the quarter the 31 st of October with SEK 180 million in cash. We have a good
Liquidity
Cash position for the commercial launch in both U.S. and Europe. We have estimated that the current level of capital is sufficient for approximately two years of operation, including the expected increase in sales after launch, obviously. Commercialization in U.S. will be somewhat delayed from what we have planned, but we expect that to come further on, and we expect that this increase in sales will come when we have got the approvals and launch the product. We have a good cash position, so we don't have any need for capital needs right now. We don't see any impairment loss on the capitalized development cost of DiviTum TKa. We have obviously a little bit higher expense compared to last year.
We will keep on increasing this because we're preparing for the launch. The organization has grown from 21 last year to 25 this year. We will continue growing the organization in preparation for the launch. We have delayed that a little bit, so it's not. We're still planning to do it in conjunction with the FDA approval. Handing over to you, Anders Rylander.
Thank you very much, Cecilia. If we move then to the last slide, the summary slide number 17. To summarize it, we have a unique product here that can really address an unmet need and improve monitoring of treatments within metastatic cancer, metastatic breast cancer initially, and to be expanded over time into to other areas, and to the benefit, of course, for patients and healthcare providers. We are planning our commercialization, and it's built on strong scientific collaborations with some of the leading key opinion leaders and academic centers in the world within this field.
Together with them, we have performed clinical trials, and the outcome, the results, from those trials is a really strong foundation for the upcoming commercialization activities, including the regulatory approval, including reimbursement and, inclusion in guidelines, et cetera. We were planning for a 510(k) clearance before end of this year. Unfortunately, as I explained, this has been delayed. We're still waiting for that feedback to be able to update and submit our application according to to the FDA feedback. We hope to be able to do that soon, and we'll communicate that. In the meantime, we are preparing for U.S. launch right after we have the approval. We have taken measures to expand. We expanded our organization with Warren Cresswell, and we have now three employees in the U.S.
We have put on hold, of course, hiring the sales force as we need, of course, the clearance first, sales force and market access. We are planning and preparing. Of course, it will take a couple of months after clearance. We are prepared for it and can soon be launched on the U.S. market. The next market we'll move into is selected countries on the European markets, and we'll do that after a launch in the U.S. after filing. That's the summary for this report. We open up for questions. Last slide.
Ladies and gentlemen, if you have a question for the speakers, please press zero and one on your telephone keypad now. The first question is from Johan Unnérus, Redeye. Your line is now open. Please go ahead.
Thank you. Johan Unnérus here. Yes, the first question, before you had the FDA, the process was the substantive review process. Now it's an interactive process, even though, of course, it's clearly interrupted by the priorities reflected by the pandemic. If Patrick could give us a sense, I presume there is some sort of regularity in sort of informal contacts, even though they obviously won't give any material feedback. I presume there is some sort of regularity in contact between you and the FDA.
Oh, you mean frequency?
Yeah.
The way it works is that the FDA has
I'm afraid we have a technical issue. If you could please just stay on the line, we will resume this conference shortly. Thank you. Ladies and gentlemen, thank you for standing by. We will now resume the conference call.
Yes. Hello, everyone. I understand we had some technical difficulties, so I'll repeat the question. I'm sorry if you hear this answer twice. I think the question was if we can develop how the process, the interactive process works with the FDA. Since we completed the substantive review process by end of July, we went into the interactive process 'cause we only had a few outstanding questions. Those are within different areas with different resources on the FDA side because they are organized by specialties. That's part of the problem, that they need to involve several of these specialists and they're not available at the same time, which creates the delay.
Also, I commented on the tone and like the progress on a very high level. Since we're still in discussion, it would be a bit early to conclude. It's been a positive discussion where we feel that the FDA has guided us and also helped us find a solution how to get an optimal intended use, for instance, which we're very happy with, as the discussions progressed. We feel that we and the FDA have a common goal of making and getting our product, DiviTum, cleared, 510(k) cleared. The real challenge and struggle has really been the resource situation that they are in, which is due to the fact that they didn't review anything other than COVID applications for a long time.
That has built up a backlog that they are now trying to work off. I think we are still fortunate that our review started early in that process. It could have been worse but of course it's frustrating. I think that sums it up.
Excellent. Can you give us any flavor of the sort of informal contact? I presume you have some sort of informal contact with FDA as well.
Most of the questions we've been discussing, we believe we have come to a conclusion and agreement. There are some remaining things that we are discussing. In order to be able to submit our application, we need that formal written feedback from the FDA as an explicit instruction from them. It's difficult for us to deviate from that and go against their instruction. That's basically what we're waiting for, the written feedback that summarizes it, that's formal. That's also hopefully a bit more structured because then they need to collect all the different specialist area and put it into writing.
Based on that, we can update our application that will cover all those areas. Of course, since we've been able to discuss this informally and we have meeting minutes and some mails covering part of these areas, we have been working in parallel to shorten the time required for us to complete the response after their formal written feedback. That's how the process has worked.
The way-
Yeah.
The way things play out, it could be that the San Antonio comes a few months before approval in a positive scenario. What do you expect to get out of that? You have a clearly good momentum in terms of building clinical evidence, and some of them are featured directly in the. There is also a great place for meeting people and expanding network, of course.
Henrik, I understand the question was, we'll be presenting several results and posters on San Antonio. What can we expect to get out of that conference, in the situation where we are, commercial process-wise? Can you elaborate on that a little bit?
Yeah. I mean, as I mentioned and as we've seen lately, I think, you know, one thing we will get out of the San Antonio meeting is the fact that we are now more and more collaborating with the pharma partners developing new CDK inhibitors. We actually expect to have even more of that kind of service that we are currently undertaking for pharma and more intense collaborations. As you could see from the BioItaLEE results, we really believe that TKa is a very, very strong biomarker in that regard, monitoring and predicting. We would expect to see more of that kind of work and more strong clinical data to be established.
Mm.
If I can build on Henrik's answer, this is also the first physical meeting, or it's a hybrid meeting now.
Yeah.
It's virtual, but the first meeting in quite some time where you have the opportunity to meet people, and we've always used this meeting to strengthen our network, to get our message out, and we're able to do that. Despite not being 510(k) clear, we can still talk about our results and generate demand for the product in this really important stakeholder group, the leading oncologists within breast cancer. It's an important meeting for us, and we wanna be present to display our excellent results from clinical trials so far.
Okay. Thank you. Can you say that you are approached by or contacts in distributing networks, not that you're proactive, of course, in this situation, but I presume if you ask, you will answer?
Well, you can say that so far, Henrik told about the current collaboration. We've since before announced Novartis and Pfizer. Those are examples of how our results so far has generated interest from customers. The outcome of clinical trials generates interest and demand, and so far it's for research use only products and collaborations. It's the same way that we generate demand based on the results in clinical use going forward.
Yeah. Plus, I would also mention, I mean, the fact that you actually is part of phase II activities is obviously very important. Even if it's, you know, still research use only, there's not, you know, not too far away from actually being built into something more serious than, you know, just the phase II. Very good. Finally, Warren is on board. What is he up to now in December and January?
Well, Warren, he's planning for the launch, so we are ready when we get that clearance. That means that he has already identified the candidates to hire and will also make some hiring before that. We know we're not starting to building the organization when we get the clearance, we're already doing that. He's also looking into 'Cause we need, of course, to have the product in a lab where it can be analyzed, so he's working within that area to get the product up and validated in the clinical lab that can offer the product. That's another area. A third area is to set up processes for market access, invoicing, reimbursement, et cetera. He's looking into that also.
That's example of some of the areas that he's covering, and together with Amy and Robert Dann. Amy Williams, more on the scientific area, and Robert Dann, the marketing area. Within the marketing area, we're planning also all the materials required to get our message out, as soon as we are allowed to communicate within that intended use that comes with the 510(k) clearance.
Excellent. Thank you.
Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. We haven't received any further questions, so I hand back to the speakers for closing remarks.
Well, thank you very much for listening in to our presentation, and we will of course keep you updated when it comes to the FDA process being the most important news that we expect in the near future. Thank you.
Ladies and gentlemen, this now concludes the conference call. Thank you all for attending. You may now disconnect.