Earnings Call: Q4 2020

Feb 4, 2021

Welcome to the Hansa Biopharma AB Year End Reports, January to December 2020. For the first part of this call, all participants will be in a listen only mode and afterwards there will be a question and answer session. Today, I am pleased to present CEO, Soren Torstrom. Please begin your meeting. Thank you, operator. Good afternoon to those of you in Europe and good morning to those in the U. S. Welcome to the Hensa BioPharma conference call Reporting the year end results for 2020. I'm Soren Truesbod, CEO of Hunter Biopharma. And with me today, I have our CFO, Donato Spolza as well as our Head of Investor Relations, Today, we'll review the overall progress and highlights of our business in 2020 as well as the near term milestones. Our presentation should take 15 minutes and after that we'll take your questions. Now please turn to Slide 2. Please allow me to draw your attention to the fact that I'll be making forward looking statements during the presentation today and you should therefore apply appropriate caution. Please turn to Slide 3. 2020 was overall a very successful and transformative year for handset biopharma, The year during which we achieved a number of significant milestones, including not least the conditional approval of IDHIFRX by the European Commission for the desensitization treatment of highly sensitized kidney transplant patients. Commercial launch activities have been successfully initiated and implemented as planned, Including supply chain activities and productive initial interactions with national reimbursement authorities and key transplant clinics despite the escalating COVID-nineteen pandemic in Europe during the Q4. Clearly though, the challenging operating environment for the transplant clinics Has somewhat impeded the ability by the clinics to aggressively pursue early access to special budgets for innovative new treatments outside national reimbursement schemes as well as the ability to implement new local protocols. We've also made significant progress in our efforts To develop valuable drug candidates outside transplantation. Last summer, we announced an exclusive agreement with Sarepta Therapeutics The partnership is progressing as planned. And in the second half of twenty twenty, Sarepta initiated ongoing preclinical investigations with amylketase as Another key milestone was the announcement of positive high level data From the investigator initiated Phase II trial with anitradase in 15 patients suffering from severe anti GBM antibody disease. Based upon the study demonstrated that 2 thirds of the anti GBM patients enrolled achieved dialysis independence 6 months after treatment. These positive data in anti TBM antibody disease are very encouraging, particularly as we expand into new indications within autoimmune disease. While 2020 has been a transformative year for AntibioPharma with significant progress in key areas, We've also seen the negative effects from the COVID-nineteen pandemic impacting our operational business and clinical trial activities during the year. Recruitment in 2 of our Phase 2 programs, the Embraer syndrome or GBS and antibody mediated kidney transplant rejection or AM1, Both had to be paused during a large part of 2020 to preserve data integrity and for logistical reasons. We recently reinitiated patient enrollment in both studies under a risk based side by side approach. Depending on the development and impact of the ongoing global pandemic, we now expect to finalize recruitment in both studies towards the end of this year. Given the current status of the COVID-nineteen pandemic, we may continue to see impact on our operational business and clinical trial activities in 2021, Noting that we will maintain measures to protect employees and take social responsibility during this global healthcare crisis while working to limit any potential negative effects Please turn to Slide 4. Enter Biopharma's evolution into a fully integrated commercial stage Biopharmaceutical company took a major step forward in the Q3 last year following the conditional approval of IDHIFRX by the European Commission. As communicated on previous occasions, Hanta is embarking on a sequenced and focused launch strategy that targets leading kidney transplantation centers to ensure early experience in the right patients by centers that have the potential to become early adopters and centers of reference. Commercial launch activities are now underway as planned. During the Q4 of 2020, our first commercial product was manufactured Following validation of packaging and labeling processes in select European markets. Following Initial pharmacy level pricing in the first markets, supply chains are now being established for the initial distribution of IDACRIGS the leading transplantation centers in Europe. Discussions with national reimbursement authorities are overall progressing as expected, And we expect decisions from agencies in some of the early launch countries to be made starting mid year. We're also working with select key centers that have the ability to potentially access funds outside the national reimbursement system for individual patients prior to the granting of national reimbursement status. Despite the raging pandemic in Europe, our front end MSLs and key account managers have been able to Closely and frequently interact virtually with key centers and key opinion leaders across Europe and the response from key centers has been overall positive. We're also moving forward at speed with preparatory activities to enable commencement of the post approval efficacy study we've committed to as part of the conditional approval, Which will be a great way to generate hands on treatment experience in key centers in the later launch countries where it will take some time to get commercial market access. We expect to initiate this study in the second half of the year. Please turn to Slide 5. In the U. S, we are in ongoing discussions with the U. S. Food and Drug Administration regarding a proposed study protocol for a new randomized controlled study Despite the current challenging operating environment, we hope to secure alignment near term with the FDA on the final study protocol. In parallel with our dialogue with FDA, we have for some time now worked extensively with key opinion leaders and centers targeted to be included in the proposed trial as well as key players involved in organ allocation. And as soon as we get green light from FDA, we will proceed to set up trial centers in the U. S. As previously guided, under the assumption that we can align with FDA near term And that the COVID-nineteen situation in the U. S. Does not materially adversely affect patient enrollment, we expect to complete Patient enrollment in 2022 and to potentially file a biologics license application by 2023 under the accelerated approval pathway. Please turn to Slide 6. As I mentioned earlier on this call, we recently announced positive high level data from The investigator initiated Phase II trial with anifidase in anti GBM antibody disease. While we await the full data set From the study, we have started preparations for upcoming engagements with FDA and EMA on a path forward towards BLA and MAA enhanced GBM. Our 2 other Phase 2 programs in GBS and AMR were both temporarily halted during a large part of 2020 Due to the impact from the global COVID-nineteen pandemic on the ability to enroll patients and preserve data integrity. Patient enrollment was reinitiated in both studies in December 2020 under a risk based side by side approach. Depending on the development of the COVID-nineteen pandemic, we expect to finalize recruitment in both studies towards the end of this year. As of today, we have recruited 5 of the targeted 30 patients in both the GBS and the AMR study. Now please turn to Slide 7 and a summary overview of our pipeline. As depicted on this Overview slide. We have made great progress over the past few years developing a broad clinical pipeline for both transplantation and autoimmune diseases. And we have exciting preclinical projects ongoing in cancer and antidrug antibodies and in the promising field of gene therapy Our preclinical studies with the nephidase were commenced last year by our partner Sarepta Therapeutics as part of efforts to develop the nephidase as I will now hand over the call to Donato, who will take us through a detailed review of financials. Donato, please? Thank you, Onato, please. Thank you, Soren. Please turn to Slide 8. As Soren stated at the beginning of our call, 2020 was a transformative year for Hunter Biopharma in which we achieved many milestones including The company's first product approval. Significant progress we have seen is also reflected in our 2020 financial performance. Revenue for the Q4 2020 amounted to DKK 4,000,000 and to DKK 6,000,000 for the full year 2020. In the Q4, we started to recognize the first revenue from the US10 $1,000,000 upfront payment we received under the Sarepta agreement mid last year. So the 2020 revenue mainly comprises DKK 2,600,000 under the Sarepta agreement and DKK 3,500,000 under our agreement with Access Shield Diagnostics. This RAPTOR upfront payment will presumably be recognized over a period of approximately 36 to 48 months as Hamsa fulfills its SG and A expenses amounted to DKK 63,000,000 for the Q4 2020 and CHF203 million for the full year compared to CHF53 million CHF 167 million, respectively, for the same periods in 2019. The increase in expenses reflects the progressing activities related to preparing for a commercial launch of eglifidas in Europe, including investments in marketing, branding, market access, patient advocacy and supply chain activities. In 2020, we also increased our R and D investments in our R and D programs and our medical organization as we expand our activities outside kidney transplantation. R and D expenses amounted to DKK 50,000,000 in the Q4 of 2020 and were €8,000,000 lower compared to the same period of 2019. For the full year, R and D expenses were DKK 227,000,000 compared to €193,000,000 in 2019. Investing in R and D and our pipeline activities is a priority for our short, Mid and long term value creation. The proceeds from last summer's fundraise supports our continuous focus The development of amnifidase for additional indications such as AMR, GBS and anti GBM as well as next generation enzymes for repeat dosing, also known as the NISAT program. The net loss for the Q4 of 2020 was DKK 106,000,000, which is basically on par with the net loss recorded for the same period in 2019. For the full year of 2020, the net loss was DKK 423,000,000 compared to a net loss of CHF360,000,000 for the prior full year. The increased net loss driven by increased activities in commercial and R and D, both of which drove costs in 2020. Please turn to Slide 9. Cash flow from operating activities amounted to minus DKK 97,000,000 for the 4th quarter And minus DKK290,000,000 for the full year, which is 13% below the level 2019 and positively impacted by the Sarepta upfront payment. At the end of December 2020, Our cash position including short term investments amounted to approximately SEK 1,400,000,000 equivalent to approximately $160,000,000 Last summer, Hunter strengthened its cash position substantially with a successful placement that raised SEK 1,100,000,000 or 100 21,000,000 The placement was multiple times oversubscribed and helped Hansard to further diversify its shareholder base With the participation from leading life science investors in the U. S. And in Europe. With our solid year end cash position, We expect our operations to be financed into 2023. I now hand back to to give his final remarks. Thank you, Donato. Please turn to Slide 10. Enter BioPharma's evolution into fully integrated commercial stage biopharmaceutical company is now becoming a reality. We have an exciting year ahead and are all Well positioned to execute successfully on our key priorities and Abaxis for 2021, which are to first ensure the successful launch of the company's first commercially approved drug Idaherics in Europe. 2nd, finalize the clinical trial protocol with the FDA and initiate a Study in the U. S. To support a future filing of a BLA for amipidase and kidney transplant. And third, continue the strong momentum to advance our Looking at milestones for 2021 beyond the European launch, We expect to receive 3 year data from the long term follow-up study in kidney transplantation later this spring and to initiate IND enabling top studies for our next generation enzymes also known as the NISO program. In the second half of twenty twenty one, depending on the COVID-nineteen situation, we expect to complete enrollment of patients into our 2 Phase We look forward to keeping you updated on our progress in advancing our mission to bring life saving and life altering therapies to patients with rare diseases, While generating long term value to our shareholders and society at large. Please turn to Slide 11. And with this, we're now ready to take your questions. Operator, please begin. Thank And our first question comes from Ingrid Gaffano from Keppel and Co. Please go ahead. Your line is now open. Hi, thank you very much. Hi team. Thank you for taking my question. I just have a little bit of I was wondering if you can share a little bit of background on what sort of discussions are you currently having with the FDA to define the protocol for the randomized controlled trial? I think in the past you mentioned already you gave us some idea what the FDA would be looking for. So I'm curious to hear what exactly do you still need to finalize Before going ahead. Yes. So we've had a discussion for some time now. As you know, we submitted the draft protocol following our last extensive meeting based on the outcome of that meeting and we submitted that protocol over summer of last year And we've had an ongoing dialogue with the FDA. I would say that it's clear that this is also Challenging situation for the agency. And so therefore, it's a little bit of a rigid interaction that we've had. But essentially, we've had a broad ranging discussion as you would expect when you're preparing for a trial of this nature with a Transformative therapy around a lot of different aspects from the working allocation to all kinds of logistics And so on. So it's really a very broadly scoped discussion. I would say there is no single issue that I would point to that is Of critical importance, it is really broad range of issues. And as I said, we're continuing this dialogue and we hope to have All matters result in the coming months. All right. Thank you. Thank you. Our next question comes from Charles Weston from RBC. Please go ahead. Your line is now open. Hello. Thanks also for taking my questions. I have 3, please. First of all, In terms of AMR and GBS recruitment, what control can you or what can you do in order to improve the probability of recruitment by the year end? Are there extra centers you can bring on? Is there anything else you can do to accelerate that And mitigate COVID risk. My second question regards any discussions you may be having with other gene therapy companies, Presumably that will be confidential, but are those discussions still ongoing? And are you expecting any additional data to be published on the use of Ediferix in this application. And then thirdly, just to continue on the FDA Discussion with regard to the pivotal study design. In order to meet your expectations For the timing of submission BLA, when do you need to get approval for the study design, please? Thanks so much, Charles, for these questions. Let me take them in turn. So starting with the question around GBS and AMR patient enrollment. So clearly, we want to accelerate enrollment now as we start these centers. And as you Indicated yourself, one of the things that we're doing is we're actually adding additional centers. And as you do that, you obviously need to keep in mind that you also have to have High frequency of interaction, right. It needs to be top of mind at the centers. So we're certainly keeping that in mind. We're not going to At a very large number of new centers, but clearly we are expanding. That's clear. And we also have A strong and very focused team on our end that is ready to and already is interacting with the centers. There is strong interest At the center level, the patients are there. We know we've seen that. If you look at the number of patients we have missed, if you will, The COVID-nineteen pandemic forced us to halt patient enrollment. So we think it is Possible, clearly. But we have to look at the COVID-nineteen situation and see how it impacts Patient enrollment, but certainly we believe it is possible and we're doing what we can to achieve that target. Let me move on. If you have additional questions, we can take them. But let me move on to the second question you asked around our discussions with potential Partners in the gene therapy space. So clearly, there is very strong interest. I would say that anything, the interest overall has Increased over the last year, not just based on the fact that exciting preclinical data on amyloidase Has been published, but also due to the challenges that the gene therapy companies clearly have encountered in terms of Not just the neutralizing antibodies per se, they're pre existing or they develop post a first dosing, but also because of the Regulatory kind of pushback and the issues that we've seen surface around response at the podium level and the durability of the response. So clearly strong interest from a broad range of players. Obviously, it's important for us to do the right partnerships with the right partners. So it's impossible to predict if and when we'll be able to announce additional agreements in the short term. But certainly, there is a high level of activity in the space, I would say. And then you also asked in relation to that when we would expect to publish or announce additional results. And that is very, very difficult to predict. As I said already, very strong and promising data are out in by an article in Nature. There may be additional data coming, but I can't predict at this point in time when and in what format and where. Moving on then to your third question around the FDA situation. So in order to we think it's going to take approximately a year to fully enroll a trial Of the approximate size that we're discussing with the FDA, again that needs to be nailed down in the final protocol. So that's Something that can vary a little bit, but it's going to be a limited scope trial. This is what we are discussing. And as I said, we Expected to take approximately 12 months to fully enroll. But that will be under the assumption that We can't enroll patients at the normal level. So we really need to watch for the impact of A COVID-nineteen situation in the U. S. That may not be fully controlled by the time that we're ready to start. Also the specifics starting time, not just setting up the clinics and going through the legal work there And getting the certifications and so on, but also just making sure that they're ready to Enrolled 1st patients and we can preserve data integrity and so on and it's a right scenario may be impacted by the COVID-nineteen situation. So that is something that is obviously something we're watching. But I would say, if we get as I said, if we get approval by the FDA Over the coming periods, coming months, we should be in a position to start the study so that we could have Data readouts that would enable us to submit a PRA by 2023. Thanks very much. That was very clear. But just as a follow-up please on the last point. You said In the coming months, I know you're not trying to tie yourself down to a specific date, but I guess I am trying to tie you down So if you do the counting back and you know how long it's going to take to enroll, you know how long it's going to take or you can estimate how long it's going to Take the get the trial centers up and running and to go from approval of the study to the first patient And the follow-up, and presumably you have a date in mind by which we are seeing that we should have seen the press release from you saying that the study design has been approved. So is that sort of middle of the year this year? Is it a bit earlier? Yes, certainly not the second half of the year, right? So as I said, it's in the coming months, meaning that We in order to be able to meet that timeline, again, depending on the COVID-nineteen situation, we should have the approval During this half, that's clear. So that's the overall time frame. Okay. Thank you. You're welcome. Thank you. Our next question comes from the line of Adam Carlson from ABG. Please go ahead. Your line is now open. Hi. Thank you for taking my questions. Couple of questions around the reimbursement side of things. I was wondering if you could give any more details on which countries or perhaps the number of countries that you said might special local budgets for reimbursing the use in individual patients. And is it fair to assume That volumes from such use would be very limited or are you expecting any kind of substantial volumes from that use? Good question. So in general, you would want to when you meet in most countries go through assessment like with full HTA submission and so on. And we're doing that. We have submitted in some countries and we're preparing in others where it takes A little bit of time before you actually allow to do so. But there are some countries as you indicated and as we've indicated ourselves where the centers Maybe able to access reimbursement or funds for individual patients outside of such a national evaluation. And those countries are countries like Denmark, Netherlands, Finland, Czech Republic, for instance. And so we are certainly working with the centers there. There is strong interest in some of these centers that have specific patients in mind, But it is a process that they need to prioritize and go through. We are hand holding them as much as we can, but it is a challenging thing to do In the middle of the worst pandemic that the world has seen recently and where it's difficult to interact for them also with those Decision makers that they need to interact with and where, of course, priorities are being shifted in the clinics and funds are being budgets are being And so on. So I'd say I have to say it's a very, very challenging environment. But as I said, what is really encouraging is the interest and Sire to regardless of this doing what they can to see if they can get funding for patients that may otherwise die. So that's great to see. And another question, if I could, along the similar lines. Are you able to give any more details around perhaps the number of reimbursement, national reimbursement decisions that you're hoping to see during 2021? Perhaps you said they were hopefully going to come around Start of the middle of the year. Do you have any kind of expectations around the number of decisions this side of 2021? As ever and I've been involved in this a number of times, many times actually before, it is difficult to predict the Specific timing of these decisions and of course the outcome, it is an iterative process with Push back and you have to supply additional information and so on. And especially during these times, the timing is a little bit difficult to predict. Certainly, I would hope that we get a couple of substitutions this year So that we can add additional national level reimbursement in a number of countries. But it will be a process over the next Years essentially also to get the later launch countries to go through such assessment processes. And as I've indicated, what is A great situation for us is the fact that in parallel with all of this where we will gradually gain access to individual reference centers in Europe, the That we have committed to as part of the conditional approval, which essentially will be geared towards generating more of the Same type of data that we generated already in Phase 2. So as I said, a great way to work with these key centers and have them Having the right experience early on. I'm also stressing this connection, this is we truly believe that there is very, very significant Tien Tsiol, just for this one indication for amylketase. There is a very high degree of unmet medical need, but it is transformative therapies. It will require A shift in mindset implementation of protocols at some point guidelines. There will be a trial period where these key centers will try it on one patient first and follow that patient for many months Before they are ready to say, okay, let's use it a little bit more frequently and broadly in this tender. So it's going to be, as I've said many times before, an S Jade, launch curve. We are happy if at the end of this year we have been able to initiate Treatment in some of the key centers in Europe that everyone is watching and that these experiences are positive. This is what we are focused on this year. So that's what you should be watching for. Great. Thank you. Thank you. We have a follow-up question from Charles Weston from RBC. Please go ahead. Your line is now open. Just a quick follow-up please. In terms of the post approval study in Europe, are the centers With which you'll be working on that, will they be working at commercial terms? Or are the patients that you recruit into that Study therefore lost patients on a commercial basis? They're essentially not going to be lost. It's going to be on trial terms, right? So it's not commercial supply. But they're not going to be lost in the sense that as an opportunity cost because we are primarily going to set up these centers in the later launch countries where it will take Some time to get market access as you would like. So that's the overall focus of that trial. So we can Generate experience in the early launch countries via the commercial route and then in the later launch countries using this trial to do it. Great. Thank you. Welcome. Thank you. As there appears to be no further questions, I return the conference to you for any closing remarks. Well, thanks so much. Thanks for the interest. This time, as I said, this is a truly exciting transformative year for Bantou Biopharma once again launching our We're very excited about the progress in our pipeline building activities and we really look forward to Continuing the dialogue. So thanks so much.