Thank you very much, Nats, welcome everyone to the Biovica interim report presentation. If you move to slide number two, we have the names of the participants. Besides me here today, I have our Executive Vice President and CFO, Cecilia Driving. Cecilia?
Good morning, everyone.
Also our Clinical Development Director, Mattias Bergqvist.
Good morning.
Moving to the next slide number three with the agenda. I'm going to make a short introduction to Biovica, what we do, and I'll present the highlights for the report. Mattias is going to take us through the latest study results from clinical trials that we have been performed during this period. I'll talk a little bit about what's ahead of us and what we're doing right now, the commercialization plan and activities, where we are, and what you can expect next. Cecilia will talk about the financials, and finally, we'll summarize and have the opportunity for a Q&A session for everyone to ask questions. If we move to slide number four, the short introduction about Biovica. Biovica develops and commercializes blood-based biomarker assays [to pre-monitoring] of modern cancer therapies.
The product DiviTum is an assay that can accurately measure cell proliferation from a simple blood sample of a patient. As you all know, proliferation and cancer is closely related. The product has, in several clinical trials with some of the leading key opinion leaders, the best cancer oncologists in the world, proven its capabilities to early evaluate therapy effectiveness in metastatic breast cancer and other cancer areas. This is also something that Mattias will elaborate a little bit more on as we have the latest results to discuss in this conference. Our initial focus is within the metastatic breast cancer area, where we are working hard in order to launch the product on the U.S. market during 2021. Of course, the product itself has great benefits for patients, but also for payers in order to manage the treatments better and with a more individualized treatment schedule.
We move to the next one, slide number five. We were supposed to have a summary of the events during the second quarter and events after the end of quarter. One major milestone for the company was the submission of the 510(k) application. Leading up to that was the completion of the clinical validation phase, where we met all the criteria that we have defined prior to starting the validation. The clinical validation and the analytical validation that had been performed previously and communicated before summer is what the major part of the application, and the application itself was submitted by end of September. We also made a new targeted share issue of in total SEK 148 million. We got both some new investors and some larger previous investor that took part in the share issue.
We are very grateful for the confidence that the investor shows us and the great interest for taking part in this share issue. After submitting the 510(k) application, we got feedback from the FDA that they currently are handling a lot of COVID-19 related applications that have emergency priority. For Biovica, that resulted in a 90-day pause in the handling of the application from the FDA. A month later, we got a confirmation that they now see 60 days. They are sticking to the original plan of 90-days pause, which is comforting for us.
Despite this occasion, we've been able to run our business pretty unaffected in this difficult time of COVID, so we're grateful for that as well. After the end of period, we presented or will be presenting at the ongoing San Antonio Breast Cancer Symposium for results from four clinical trials within the metastatic breast cancer area. That is something that Mattias will elaborate a little bit, since it's a milestone for us and very important for the activities going forward when commercializing and launching the product. If we can flip to the next slide summarizing these four, Mattias, maybe you can take us through the different clinical trials and the results of those.
Yes, of course, Anders. Thank you. It is my pleasure to walk you through our trials that will be presented at this meeting. It actually kicks off today, the San Antonio Breast Cancer Symposium. This is sort of the world's cutting-edge scientific program in breast cancer. It is a great scene for us to be at, and we are, as Anders already alluded on stage with four different clinical trials. This is, of course, a clinical trial program and outcome that is highly valued by us and any biomarker company. The results are strong, but they are also the outcome of our many years of dedicated work with a laser-focused aim to provide unique clinical value in a specific patient group.
That patient group is what you see on this slide, metastatic breast cancer patients, specifically the application to monitor these patients and to early evaluate the efficacy of their therapy. The trial that I will be highlighting today is the SWOG study, which is also our FDA application trial and a clinical validation study. It is the PYTHIA study, which is our first planned prospective trial that kicks off in 2015 already. It is a study from University of Nebraska and Washington University looking at the new dosing of a CDK4/6 inhibitor, which is part of the standard therapy today. It is a study from the Mayo Clinic, which is a genomic study, sort of a future study where DiviTum is included as a benchmark to measure against. If we then go to the next slide. This slide actually summarizes our trial program to date.
The early trials that we did here in order to establish our DiviTum as an application to monitor metastatic breast cancer, we did already back in 2013 together with Karolinska. Ever since then, we have been very committed to provide unique value for DiviTum in this area. The first proof of concept study made it possible for us to then initiate new collaborations on the other side of the pond in the U.S., and those three trials will be part of the trials that are presented at the San Antonio Breast Cancer Symposium. Up until now, we have published six trials in metastatic breast cancer in full, and these four trials now at San Antonio will be published as abstracts. All in all, we now have 14 clinical trials within breast cancer from early stage to late stages, and that includes more than 2,300 patients.
DiviTum has also been in focus for three editorials summarizing the results and value for assay. The applications addressed are the prognostic application, looking at recurrence in early breast cancer, but also progression and survival in the metastatic setting. For monitoring, the key thing is to get quick feedback on treatment efficacy. We can move to the next slide. The first study I want to highlight that we presented in San Antonio is the SWOG study. This is a very large trial, and it shows that DiviTum is a strong prognostic biomarker for progression-free survival and overall survival. Samples are taken at baseline and then at cycles two, three, four, and seven, and that is, of course, transferable approximately to months two, three, four, and seven. All in all, 1,726 samples were analyzed in this trial with 100% evaluation rate.
That is important because not all liquid biomarkers have evaluation rates. For example, CA 15-3, it's only possible to evaluate approximately 80% of patients. In this case, we were able to analyze 100% of all samples in the study. The highlights of the results are that values at baseline and at subsequent time points is associated with worse prognosis in these newly diagnosed patients. It is also important that you have a biomarker that is independent from baseline. If patients come into the clinic, they are diagnosed, but then the physician might forget to get the sample. It's also important that the biomarker can provide information also at cycle two, three, four, and seven, and that is exactly what we have provided evidence for in this trial.
Findings also demonstrate that patients with low DiviTum values at baseline can do relatively well on single agent therapy, and they may not need combination therapy. That was the new finding here, that DiviTum also can predict and be a tool for selecting therapy already when patients are diagnosed here. This has been a very pleasant finding in this trial. This is also predictive capacity of DiviTum. We will see more of this trial because this is the study that also FDA will take into consideration for our application. Move to the next slide, which is the PYTHIA trial. This is the first prospective DiviTum study, where we planned together with IBCSG or the International Breast Cancer Study Group and the Breast International Group.
This study has also been funded by the European Commission through our Horizon 2020 grant in the Biovalid project that we were awarded in 2015. In this study, 122 patients have been enrolled, and they were enrolled at 19 centers in Belgium, Italy, and U.K. The study addresses standard therapy of an endocrine therapy in combination with the CDK4/6 inhibitors. What is exciting here is that samples are taken at baseline and then at two and four weeks. The results demonstrate that patients who get a suppression demonstrated by DiviTum at two weeks, they have a significantly better progression-free survival. They have a significantly better outcome at six months. Those patients have an 85% progression-free survival at six months compared to 17% of those who don't get suppression. That means that DiviTum can quickly identify patients with poor prognosis and resistance to therapy.
The authors also conclude that DiviTum may be used as a novel biomarker to select patients for alternative treatment modalities. We go to the next study. There are a lot of study and a lot of science here for you. This is also an important trial because one of the challenges of providing drugs today for this patient group is, of course, also tolerability here. At the University of Nebraska and Washington University, they decided to embark on a journey to look at the new dosing of a drug called palbociclib, a CDK4/6 inhibitor, which is part of the standard therapy to date. They were not happy with the tolerability of this drug, so they decided to do a new dosing schedule, giving the drug for five days on and two days off instead of three weeks on and one week off.
They were successful in this because this dosing schedule showed better tolerability. It was also important for them to have a biomarker that could provide evidence that this dosing schedule also provided strong efficacy data and also had a biomarker that can identify which patients responded to this new therapy. What's interesting with this trial, too, is that there is a lot of samples in this trial, and they are taking at baseline two and four weeks, and then every three months for more than two years. These patients were followed for a long time with many samples. The results demonstrate that patients with a response or no disease progression, they had significantly lower DiviTum values at baseline than patients with progressive disease.
During the serial monitoring of these patients, a rise in DiviTum levels predicted disease progression more than three months prior to imaging progression. Highlighting the capacity of DiviTum to sort of conclude on what is coming many months ahead of what you are able to detect with imaging today. The DiviTum levels at baseline and on-therapy dynamics demonstrate promising results for response prediction and monitoring of this new standard therapy in metastatic breast cancer called palbociclib. We then move on to the final trial that will be presented, which is a genomic trial.
Which is, of course, part of the future, because if we want to learn about this disease and improve both regarding therapies but also our knowledge about how to monitor and how to get early signals on resistance development of tumors, then it's important that we increase our knowledge on the genomic side of things. In this trial at the Mayo Clinic, the first 32 patients in this study have been analyzed, and samples are taken then at baseline and after two months. The aim of the study is to look at the predictive capacity of DiviTum and provide a comprehensive genomic assessment in order to identify new genomic variants and pathways that are associated with an early decline in TK. Of course, correlate that to patient outcome.
The results that will be presented at the Congress demonstrate the patients with high or low DiviTum values, they have different genomic expressions, which is, of course, interesting here. The pattern between DiviTum levels and patients' genomic expression profiles may be important for future monitoring of metastatic breast cancer to test new treatments to overcome the resistance that eventually occur for this chronic disease. The study is ongoing, and it will report updated data from additional time points and greater number of patients in the future. Okay, we can go to the next slide. All of this data and the solid clinical trial program that Biovica have developed together with our key opinion leaders across the world have generated a lot of interest in DiviTum.
These five trials are some of the ones I want to highlight on the work that's ongoing at the moment. You might have followed Johns Hopkins because they are also a leading university regarding statistics around COVID, but they're also a very successful university in oncology, and we are very happy to collaborate with them on a trial looking at the early identification of progression in this area. Recent study that we have initiated collaboration on just two weeks ago that we highlighted in a press release. It's a collaboration with The Christie hospital in U.K., and also four Swedish centers will be part of this. That study will also look at the early identification of progression, added with the optimal time points to sample for DiviTum evaluation in the course of therapy.
Then we have a study with the Karolinska Institutet called [TEDICS], which is a preoperative trial looking at a neoadjuvant response marker, DiviTum as a neoadjuvant response marker during preoperative treatment. Then there's an independent trial from us called BioItaLEE that is performed by Novartis. Quite large trial, almost 300 patients. That trial will have as an aim to early identify disease progression. Then we're doing a proof of concept study, which is interesting in a way that it's looking at different combination of drugs. It is palbociclib in combination with chemotherapy. We are also addressing patients that are not hormonally responsive in this study. The data from this ongoing trial program will of course support our submission to the FDA and what we are aiming at being an approval next year.
The data from this program will start to produce results from next year, and hopefully in good timing with the U.S. approval. It'll of course also be important for the reimbursement and for later on the clinical uptake. Okay, Anders, I think I'll put a stop there and I'll hand the word back to you.
Thank you, Mattias, very much. You'll of course be around also for taking questions around these clinical collaborations and the results from them. If we move on to the next slide. We have a high-level slide describing our path and our key activities in order to commercialize and launch the product. I'll give you an update where we stand on these different activities. First of all, it's the development of the product, and you could say that that has been completed since quite some time now. The product has, as I earlier mentioned, also been validated, and that was important basis for the FDA submission. Moving on to the clinical development, which Mattias has covered. In a way you can say it's completed because we have most of the data that we think requires in order to launch the product.
We have, as you've seen, added now several trials that add significant number of patients, also increases the data on U.S. patients. We have added prospective data, and we have strong results on CDK4/6 inhibitors and in comparison with the current best practice, which is imaging. That adds a lot of strength to our evidence of the value of the product. We will of course continue with, as Mattias showed, ongoing trials to strengthen the evidence further. When it comes to the regulatory pathway, that's the 510(k), and you can see that that's also completed from our part at least. We've made a submission, and we're eager to see the feedback from the FDA, which we expect that they will start assessing our application beginning next year. In parallel, we will also submit for CE marking using the IVDD process in Europe.
Key activities that we are working with right now is commercial partnering with a lab partner that can offer this DiviTum as a service, also have an efficient and strong sales force that can be complementary to our offering. Also be a partner when it comes to the next area, reimbursement and to get paid for the product. Reimbursement and guidelines goes very closely hand in hand, so we're working also with that, and I will give a specific update on where we stand within that. In order to launch the product, we tie everything together and we have a communication plan together with our key opinion leaders when it's time for launching the product, which we expect to do mid next year. If we move to the next one, I have a breakdown over the reimbursement area.
That's been an area with high intensity of a lot of progress this period. Of course, with the data that Mattias just presented, it's complementary and is a strong foundation also for this area. One important milestone for us will be inclusion in the guidelines, and the most important ones are the NCCN and ASCO guidelines. We are now initiating those discussions and starting to plan for that to happen. In parallel with that, we have initiated a project in order to develop a budget impact model, and the deliverable there will be a value dossier to be used in the discussions with the different payers to be able to prove the value for the product for the payers. Of course, we can use a lot of the data and results from our clinical development program, which Mattias presented.
Going forward, with that, we also need a strategy for coding and coverage, which we also developed. How we will work initially with a non-specific code, and then over time, we will get a specific code, and we have planned for that. That also goes for the different types of payers that we would like to interact with and define a process for payment and price levels. We will, of course, start with the early adopters. Some have a lower threshold for required evidence, and those will be our early adopters, which we will interact with initially, and then we will expand the coverage over time. That goes also hand-in-hand with our distribution model. Initially, we will have a [pre-centralized] model so we can ethically manage this payment process and get into the reimbursement system, and we will work together with our lab partner to do this.
Over time, when we've established ourselves in the reimbursement system, we can widen the distribution and have a more distributed model. A very good thing here for us is that the enzyme that we are measuring is stable, and we're able to transport it, allowing for this kind of a centralized model. That's the update on guidelines and reimbursement. I'll move on to the next one. Here's a slide how we intend to launch on different geographical markets and an estimation of the market potential for the product. As you can see, our ambition is to introduce the test on the U.S. market, being the biggest and most advanced and trendsetting market, which also has a reimbursement system, although complex, but one reimbursement system that will introduce the product on.
We've also estimated the market potential per market, and we've done that based on market research, where we have interviewed payers and key opinion leader oncologists to get input for use of product and price levels, where we have received feedback on the U.S. market around $3- $500 per test. On the Nordic and European markets, we estimate about half the price levels. That, combined with the number of patients living with the disease, is what's made up the figures you see on this slide. We estimate that on each market that we will enter, that we will be able to gain 15% of this market potential three years after launch of product. We start with U.S., and it's planned for mid-year next year.
The second market we'll enter, and we believe we'll be able to reuse a lot of the assets being developed for the U.S. launch, is the top five biggest European market and the Nordic markets. For that, we will also work with partners on the different countries on the European market. This is the first application, the metastatic breast cancer area. One should bear in mind that this is just a small portion of the total potential. Also, this is the first geographies. There's a great potential to expand. As you saw on Mattias' slide, we already have data from and ongoing trials within the locally advanced area, which we expect the current treatments being used within metastatic breast cancer, where we have strong data to enter.
We're also interested to expand outside of the breast cancer area, where we already have data in large cancer areas like lung cancer and gastrointestinal cancers, for instance. You see the same unmet need for DiviTum as we see within the metastatic breast cancer area. If we move to the next slide, we're into the financials, and I'll ask Cecilia if you could walk us through that.
Thank you, Anders. We start with the sales numbers. Sales during the period are to customers in the research market, and as such, they vary considerably from one period to the next. Since our customers is pharma companies, and they place relatively large orders for the purpose of analyzing an entire clinical study at a time, it differs a lot. This phenomenon can clearly be seen when comparing with last year's sales. Our focus now is to take DiviTum to the clinical market, and that will probably generate soon with more regular sales, but not until after regulatory approval. Now we leave the sales chart and look at the cash balance. As you can see, the cash balance has increased significantly. We ended the first quarter with a share issue, SEK 148 million at the beginning, and the issue cost was about 5% of that.
After issue cost, the cash balance increased by SEK 141 million. At the end of the second quarter, we had SEK 162 million in cash, and that will cover our operations more than 24 months. The run rate is now about SEK 3.3 million for the first six months. Going forward, this will increase when we invest in the launch activities. The higher level of spend compared to last year is briefly attributable to the DiviTum TKa project associated with the submission of the 510(k) application to FDA and the preparations for commercialization. The organization is growing. The average number of employees is now 21 compared to last year's 17. We will continue to grow the organization preparing for the commercialization of DiviTum. The increase has been in line with what we had planned. It has been, in fact, slightly lower.
That was about it. Handing over to Anders.
Thank you, Cecilia. Also here, we're able to question about that in this Q&A session. To summarize this, I think we have a very interesting product with high potential that can address an important unmet need currently within metastatic breast cancer to improve monitoring of treatments. It's also an unmet need outside the metastatic breast cancer area, but our initial focus is within metastatic breast cancer. We also have strong collaborations with some of the leading key opinion leaders and academic research centers in the world within the field. Together with them, we have completed several clinical trial with great outcome, which will be the basis for the entire commercialization process. The market potential we estimate to about $400 million-$700 million for these initial markets within metastatic breast cancer. That's U.S. and the big European countries and the Nordics initially.
The upcoming milestones to look out for is the 510(k) process, which we're in, where we expect that the FDA will start their assessment in quarter one, we can see an approval in second quarter next year. In parallel with that, we're working to get an agreement with a commercial partner, a mid-tier lab in the U.S., which will be our partner for the U.S. launch, which will be done in parallel with or right after FDA approval. Soon after that, we expect to receive the first U.S. reimbursement on the U.S. market, we'll work to build a wider and wider reimbursement coverage within the U.S. market. We're looking through collaborations with partner within Europe to enter the first European market by end of 2021.
We have very exciting times ahead of us during next year and onwards when we are about to bring DiviTum to the benefit of the breast cancer patients on these markets, which we look forward to very much. Thank you very much. That was our presentation, and we are now open for questions.
Thank you. If you do have a question for the speakers, please press zero, one on your telephone keypad now. Our first question comes from the line of Rickard Anderkrans from ABG. Please go ahead.
Good morning. Congrats to the recent developments here. Thank you for taking my questions. First of all, if I've understood things correctly, looking at the commercialization side here, you've indicated that you, in the longer term, could enter an agreement with a larger commercial partner or perhaps several lab partners in the U.S. Is this correct? What do you expect you need to get in place before expanding your commercial footprint in the U.S.? Would it be broader guideline inclusions or reimbursement coverage, or what steps should we expect for you to expand that commercial presence in the U.S., if you will?
Yeah, I think all of those will help. The reason for a more centralized model initially is to be able to control and handle the interface with the payers for reimbursement, which is a key success factor. When you have established processes with more and more payers, we can widen the distribution model. That goes also hand in hand with expectation of an increased sales. For the development of the reimbursement sales also, the factors you mentioned, inclusions in guidelines, for instance, is a factor that drives sales uptake and reimbursement coverage, and in the end also, commercial collaborations.
I don't know if you're happy with that answer, Rickard.
Yeah, of course. Thanks. Just as a clarification there, in terms of these lab partners, are they usually keen on getting exclusivity or is it a trade-off between sort of a revenue split, if you will, that they are willing to leave exclusivity open? Do you understand a bit what I'm looking for in terms of their terms-
Yeah.
...in the agreement? Yeah. Thanks.
Yeah. We are not looking to enter exclusive agreements initially. No, that is not our strategy. We are looking to work with non-exclusive agreements, and we believe from the discussion we've had so far that that's a way forward that will work well.
Great. Just looking at the caseload of COVID-19 cases in the U.S. and the continued rush here for testing applications, are you seeing any worries that your 90 days FDA delay could be extended or how should we think about that potential risk on the timeline?
Yeah. I think it's comforting that we have received feedback. The FDA promised monthly feedback, and we received that about a month after the first communication. They initially said 90 days, and in the second feedback they said, "You can expect us to start this in 60 days."
They're not giving any guarantees, but it's a positive sign at least.
Great. Sounds promising. Just a final question here on the prognostic use case, and particularly looking at the abstracts here from the San Antonio Breast Cancer Symposium. Isn't it usually the case that patient response is poorer in a faster-growing tumor versus a slower-growing tumor, i.e., that TK1 sort of at baseline answers an already clear question in terms of a prediction of outcome in the patient, so that i.e., a higher TK1 activity sort of per definition leads to a poorer response, or how should we think about the prognostic use case data?
Mattias, Is this something you can help us sort out?
Yeah, that's a good question, Rickard. The thing is that you of course need to establish that. I think we have established that DiviTum is the greatest technology to measure that and to conclude that. Also, if you're going to bring that knowledge into the application of monitoring these patients going forward, it is great to have a baseline value and to conclude that. We have also demonstrated that DiviTum is an independent biomarker here, irrespective of what you find with other markers, what you find with other risk and prognostic factors. I think we are on a very solid ground, and we have a very strong evidence that DiviTum can provide unique data on its own. Of course, the prognostic outcome is very, very important, specifically looking at progression, but also looking at overall survival, of course.
You can also add to that the predictive knowledge that you now seem to get from this first evidence from the SWOG trial, that it might also be important that you establish these values with a specific cutoff. Here, DiviTum is completely unique towards everything else you compare against because we've established our own cutoff in our own solid trials. You must use DiviTum in order to gain that knowledge. If you are above or below a specific cutoff, that is very, very important to you because that means that you have the opportunity to get the patient to answer to a specific drug, of course. That is also important, not only the prognostic perspective.
Sure, great. Just final there on the prognostic, do you think that the prognostic use case will require larger prospective mortality-based outcome studies to reach guideline inclusion and uptake or do you think that other endpoints such as progression and these types of endpoints are enough, if you will, to gain traction and uptake in that sort of use case?
Okay. That was a few questions in one, Rickard.
Oh, sorry.
The first one was regulatory-wise, if we believe that the prognostic claim requires prospective trials and more patients. Is that correct?
No. Basically just in terms of getting guideline inclusion and broader uptake, if you believe that larger prospective trials which look at mortality will be needed to reach guideline inclusion and commercial uptake and the coverage from the insurance companies and so forth.
Okay. I understand. Okay. That's a good question. I think if we can, in prospective trials, and we will have that data over time, if we can prove that by managing treatments using DiviTum, you can have a better survival outcome, that's of course fantastic. It's not unrealistic, but we don't have those data yet. We will have that data, and you can, of course, speculate in what the results will be. I'd rather not do. Our go-to-market strategy, and the commercialization process and launch project and everything, it's not a requirement for that. It could be that comes on top of the data that we have. Do you understand what I mean?
Yeah, sure.
We are making that claim. We could, over time, add that when we have that data. We haven't based our go-to-market process on that because that would add a couple of years on the timeline.
Sure. Right. That might be a few years out yet then.
Yeah. We're continuing doing clinical trials that will add data and add possibility to add claims when it comes to intended use. Yes.
Sure. Great. That's all from me. I'll get back in the queue. Thank you very much for taking my questions, and congrats once again.
Thank you, Rickard.
Just as a reminder, if you do wish to ask a question, please press zero, one on your telephone keypad now. The next question comes from the line of Niklas Elmhammar from Redeye. Please go ahead.
Hello. Thank you. Thank you for your presentation. I actually have a bit of a follow-up question to the last one. Maybe you answered that, or maybe I didn't understand it. When do you think it's realistic to expect to be included in any guidelines if the current clinical evidence, if it's sufficient, so to speak?
Yeah. We haven't given, by the way, that precise because we are just initiating those discussions now. We don't see it as a requirement for the first early adopters when it comes to payers because we believe we have significant data and together with the 510(k) clearance for start when initiating those discussions, especially if we add the health economics that we're also working with and expect to have done before we get guideline inclusion. We think also we can use a lot of the data that we have to get included in the guidelines, and we expect the NCCN to be the first one, but we haven't set a date for that. We'll come back to that when we have had these initial discussions. It's within the time period when we say we will get this 15% market share within a three-year period.
We've assumed that within that period, we will have guideline inclusion.
Okay. Thank you then.
Feedback at least.
Thank you.
More detail than that, we'll come back to. Yeah.
Okay. Regarding sort of the launch activities and the U.S. commercialization, are you planning a ramp up right now or hiring now or are such contingent on the FDA process, so to speak?
Yeah, that's a good question. We are actually ramping up now, and soon we'll present some key hires that will be important to drive the work in the U.S.. Yes, we are strengthening our U.S. organization according to the plans that we have communicated previously that we will have a small but strong and specialized U.S. organization that can work effectively with our partners and with reimbursement.
Okay. Thank you.
Thank you, Niklas.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Well, thank you very much for the interest and the great question, and we look forward to come back as we progress and move into a very exciting 2021 for Biovica. Thank you.