Our last speaker today at the H.C. Andersen Capital Life Science seminar is ExpreS2ion Biotech. With me today, I have the CEO, Bent Frandsen. Welcome, Bent, and please carry on.
Thank you very much, Claus, and thank you to H.C. Andersen Capital for allowing me to present ExpreS2ion Biotech today. I will dive straight into it. First of all, ExpreS2ion is a NASDAQ First North Growth Market-listed company since 2016, and that is the wholly owner of the ApS, the Danish subsidiary, where all operations take place in Hørsholm, just north of Copenhagen. Here we have the protein expression platform technology that we call ExpreS2, our vaccine pipeline, and our services business. ExpreS2ion owns 34% of AdaptVac, which we co-founded as a joint venture with a group of researchers from University of Copenhagen back in 2017. This is an important company. They have virus-like particle technology, which is a very important part of our lead vaccine assets.
Our management team consists of these four people, myself, Bent, with a strong business background from the biopharmaceutical industry, as well as Keith Alexander, our Chief Financial Officer, who has decades of experience from both the U.S. and large cap financial industry. We have Farshad Guirakhoo, our Chief Scientific Officer, who brings decades of experience in development of vaccines from the lab until approved products even, and Dr. Max M. Søgaard, our Senior Vice President of R&D and Technology. Very important colleague here, and a strong scientist in connection with making our technology platform viable. Our vaccine pipeline is very focused today. It is led by ES2B-C001, our HER2+ breast cancer vaccine asset. This is a therapeutic vaccine that we developed as a breast cancer vaccine asset. It is in preclinical stage and approaching clinical testing very fast. We have ES2B-1002, which is our project name for CMV vaccine project.
This is a cytomegalovirus project that we do in collaboration with the Danish biotech company Evaxion, which holds a proprietary AI technology platform. Together, the AI designs antigens from Evaxion and ExpreS2ion's protein production technology, making the antigens makes a very strong platform for making a novel CMV vaccine. These projects target high value markets of several billion euros. Actually, with our ExpreS2ion platform that we call ExpreS2, we have proofs of concept across a lot of different projects. If you look at the right, I am very proud that we have actually a clinical phase III validated technology platform. Bavarian Nordic, they developed a COVID-19 vaccine which contained an antigen that was made using the ExpreS2 platform, and this actually met a clinical phase III primary endpoint in 2023. So in effect, ExpreS2ion can now confidently say that we have a clinical phase III validated technology platform.
We have further clinical evidence with the ExpreS2 platform in several clinical trials in the malaria field. We are very pleased that University of Oxford, they are, as we speak, conducting more than a handful of different clinical trials on several malaria vaccine projects, where the antigens are being made with our ExpreS2 system. We have the HER2 breast cancer that I am going to talk much more about in this presentation. It is in a late preclinical stage, and we are approaching a clinical trial authorization application phase. We are very excited about this, and this is fully sponsored by ExpreS2ion ourselves. We have in earlier research, as I mentioned, the CMV vaccine project, and we have also, importantly, a couple of influenza vaccine projects and Nipah virus vaccine projects.
The common denominator for these early stage projects is that they are more or less fully financed by non-diluting funding. Again, they create strong proof of concept for our ExpreS platform. Focusing on the ES2B-C001 breast cancer vaccine, here we have some important investment highlights. We are developing a therapy for HER2 positive breast cancer with the most common cancer. We are addressing a total market size that is estimated to exceed EUR 30 billion in the next years. We believe that we have a blockbuster potential and can reach a EUR 3 billion sales revenue potential. We have, as I mentioned, a strong technical validation because we base this project on a clinical phase III validated platform.
As I mentioned, we have a strong team, both on the management level, also at the board of directors level, where management and board combined more than 200 years of experience of bringing this forward, as well as a strong scientific advisory board endorsing what we do in this field. Breast cancer is actually a very common cancer. 1 in 8 women will be diagnosed with invasive breast cancer over a lifetime. In approximately 25% of breast cancer tumors, this is caused by an overexpression of a protein that we all carry, the HER2 protein. If this is overexpressed, it can lead to aggressive disease and remission and very high mortality. We know from statistics that more than 680,000 people die every year from this disease.
The market landscape is very much dominated by monoclonal antibodies and antibody-drug conjugates today. Monoclonal antibodies or mAbs have been sold for more than two decades now, with the lead product being Herceptin, also known as trastuzumab, and in the last decade by Perjeta, also known as pertuzumab. Most recently, ADCs or Antibody-Drug Conjugates have emerged as novel treatments.
However, these treatments actually come with some drawbacks, primarily resistance, as well as also compliance and cost. We see actually in up to 30% of patients that resistance will develop and these treatments will not have their required benefit. Also they require frequent hospital visits and cost up to $100,000 per treatment, so very costly. We believe we can overcome those drawbacks with our breast cancer vaccine approach. The ES2B-C001 consists of a HER2 antigen, which is made using the ExpreS system, and we couple it to a VLP using the AdaptVac technology with a proprietary super glue, if you like, whereby you can attach any protein of interest on the surface of a virus-like particle. In this case, it is the HER2 antigen, and it is a completely safe active ingredient. There are no genetic material in this.
And furthermore, we actually can develop polyclonal antibodies using our approach because we target all four epitopes of the extracellular domain of the HER2 protein. This is in contrast to the monoclonal antibodies, which actually only target one epitope. This can be explained the advantageous factor of resistance. We have seen this in in vitro studies. This is a so-called soft agar human cancer cell growth inhibition assay, which clearly provides in vitro evidence that we can overcome resistance and break tolerance. In the upper panel, you see trastuzumab-sensitive HER2 human cancer cells, and in the lower panel, trastuzumab-resistant HER2 human cancer cells. If you look at the right side, you can see by applying our vaccine, ES2B-C001, you actually inhibit the growth of tumors, as shown with the white spots here. This is a research outcome that we are very excited about.
We have also seen in vivo studies in mice that we can completely inhibit the development of tumors. In these mice studies, the mice will spontaneously develop tumors. To the left, we see a study where, as shown with the red line, by applying our vaccine, you completely inhibit the growth of tumors. Whereas in the control, as shown with the black line, you see occurrence of tumor growth. To the right, you see a tumor survival study. Again, with the red, you see actually complete survival even across 600 days, which is astonishing because these mice would otherwise spontaneously die by these tumors within 60 days. We have strong confidence and hope, of course, that these data can also translate into a human clinical setting. So now we are advancing the ES2B-C001 therapeutic breast cancer vaccine.
We just, here in April 2024, announced the completion of the preclinical safety. We are in the middle of conducting the manufacturing. We have just completed the drug substance manufacturing and are now in the middle of the drug product manufacturing, all with the aim of this summer having the GMP material ready for the first clinical trial. That is a phase I clinical trial that we are in the middle of designing here as we speak. All the relevant files for making the clinical trial authorization application are being made as we speak, the so-called IMPD and investigator's brochures and the protocol. They are nearing completion, and we expect the CTA to be carried out here after summer. Regulatory-wise, that means that we will submit the CTA very soon.
We have, as I mentioned in the beginning, a scientific advisory board, and in the oncology space, these are all very well-known key opinion leaders in the breast cancer field. We are very pleased that they endorse our clinical plans and certainly also take a strong interest in the compelling preclinical data package that we have. This leads me into our financial situation, because of course, going onwards with the clinical trial approaching, we need to have the financing in place to be able to do that. It is going to be the first clinical study which ExpreS2ion sponsors on our own.
Here you can see our cash balance over the last two years, and actually, our latest reported cash balance of SEK 60 million is excluding cash inflow that we got of approximately SEK 22 million , which was part of dividend that we got from our 34% ownership of AdaptVac in connection with the phase III completion milestone that AdaptVac obtained from Bavarian Nordic. In addition to that, last month in May, we have announced a rights issue. This process has been initiated now as we speak. Basically, we seek to raise approximately SEK 60 million , and we have intention and guarantee commitments of approximately 50% of this, so at least SEK 30 million is guaranteed. This is also including two warrant programs.
If you subscribe for one new share, you will for free get two warrants, one for a subscription in Q4 2024, at the end of this year, and another for subscription in the second half of 2025. Of course, these exercise windows have been carefully planned to fit together with the planning of the breast cancer vaccine asset, so that shareholders participating in this will be included in the upside as we progress. As you can see, most of the proceeds are intended to go for the breast cancer vaccine asset, approximately 65% aimed for the ES2B-C001 clinical phase initiation and progression. Approximately 10% goes to our CMV vaccine project. Approximately 5% goes to internal costs that we have to incur in connection with our grant-sponsored projects, and the remaining is working capital, including for protecting our technology platform and further development on this.
The rights issue is having a subscription period from the 12th until the 27th of June. That means next week we kickstart this, and already tomorrow, 5th of June, there is the annual general meeting of ExpreS2ion where I expect this to be approved by a resolution by the shareholders. That's what I want to say here as a presentation. Claus, if you have any questions from the viewers, I'll be happy to take them.
For sure, Bent, and thanks a lot for a thorough presentation. Well, only very few companies have been through what you experienced with an FDA approval of your platform. That's a very strong tool. How does this help you out in your breast vaccine, but also in general, Bent? Can you maybe for the viewers comment a little on that? I know you did it many times, but I think this is very important to emphasize that you've been through all the phases, but actually the company you work with, they decided not to start commercializing the compound. What did you gain from this, Bent?
Yes, very good question. Just to clarify, in the beginning you say FDA approval. Just want to clarify that Bavarian Nordic, they conducted the trial both in the U.S. and Europe. That is right. And they met the primary endpoint of this trial, which was to show non-inferiority against a commercial mRNA vaccine, and they demonstrated that. An FDA approval would be after actually bringing this onward for registration. As it happened with the development of the pandemic, and the COVID-19 disease, the market for vaccine has changed considerably. At least that is what Bavarian Nordic, they have judged, and it is their sole and exclusive decision to shelf the project as it is.
From our side, and also from AdaptVac, who licensed this out to Bavarian Nordic, at least the phase III clinical program met its primary endpoint, and so it was completed in that sense, and that meant that Bavarian Nordic actually paid EUR 10 million to AdaptVac. As I explained, that was a dividend to the owners of AdaptVac, and with ExpreS2ion's 34% ownership, that led to SEK 22 million for ExpreS2ion, which we are very pleased about, of course. It shows that actually in a special situation, you can accelerate development considerably, and we are, of course, very pleased that we, in a short timeframe, obtained a phase III clinical validation of our ExpreS2 technology, and on AdaptVac's behalf, also on the virus-like particle technology. It is exactly the same technologies that we apply now in the breast cancer vaccine asset. So that is reassuring in a way.
Thanks a lot for correcting me, Bent. Sorry for being unclear about that. If we look into your study, and if we combine it with the capital you are raising, do you expect to finish the first part of the phase I study next year? What is the timeframe?
Actually, as I mentioned, we are in a design phase of the clinical phase I trial. It is actually a very hectic time we are at the moment because we are actually evaluating various options to proceed. So of course, we need to carefully consider what options there are, and that means that we are looking into various collaboration partners, so-called clinical contract research organizations who can help facilitate the recruitment of patients for the phase I trial. So we are in discussions with these. We have clinical protocols that is in a draft final format. So we are discussing with these different clinical research organizations at the moment to get their final proposal and actually negotiating a proper way forward. Actually, they come with different suggestions in terms of recruitment rates and duration of the study and how many should be enrolled.
I cannot be very clear on this at the moment, except we are looking into an optimal combination of speed and costs. We certainly hope that during 2025, we will have some evidence. I think we are, and also what we are aiming at with the rights issue and our current cash situation, is that we can have the clinical data in the beginning of 2026 and proceed on the back of those.
Thanks a lot, Bent. Just to understand your project 100%, is it right to say that you have a leg where you can focus on prevention of this aggressive HER2, and at the same time, you can treat if it is already present?
Thank you for that question, and let me clarify. It is a therapeutic breast cancer vaccine we are developing. It will be used with diagnosed patients, and most likely, these patients will also be undergoing treatments with monoclonal antibodies, and/or antibody-drug conjugates. As I mentioned, the resistance occurrence in up to 30% of patients and recurrence rates mean that we will use our vaccine approach to prevent further growth of tumors, and thereby give potentially a cure. Therapeutically, this is the first part of the development program on this. Eventually, we will look into a preventive vaccine as well. That is not where we are in the beginning.
No. Okay, interesting. Then, Bent, I know you have a high level of technology, and focused on that with your team. The theme of our seminar today, besides late-stage, is also AI. It has been a big word within the industry. As I understand it, you already use it. Maybe you could elaborate a little on that, and also maybe elaborate a little on how you see this in the future for the industry.
Yeah. Well, actually, the life sciences industry has already used AI significantly over the last many years. It is a constant evolving technology. Of course, now it has been brought out to the consumer through ChatGPT and OpenAI and so forth. But we have been using AI in this industry for years. I mentioned Evaxion Biotech, another NASDAQ-listed company based in Denmark, in fact, in DTU Science Park here, where we are located in Denmark. They have been building a proprietary AI platform for making the proper proteins design for development of drugs. That we use basically for development of a novel CMV vaccine. In fact, AI is also used in many of our other programs. For example, in our grant-sponsored influenza programs, the most recent one, MucoVax. We are developing a mucosal administered influenza vaccine in collaboration with University of Copenhagen researchers.
Also there, we use AI to design the appropriate antigens, which ExpreS2ion then can make using our proprietary technology. So it is a strong combination in the early research to make AI-designed antigens.
Thanks a lot, Bent. I think that is more or less, I think time is up now. So Bent, as always, thanks a lot for a thoroughly presentation, and good luck with raising capital. We hope to see you soon. By that said, we end the life science seminar for today. Bent was our last guest. So thanks a lot for all the great questions from the audience, and I hope everybody will have a really nice afternoon. Thanks a lot.