This is Q1 2025 report presentation. During the Q&A session, participants are able to ask questions by dialing pound 5 on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Erik Manting and CFO Lotta Ferm. Please go ahead.
Thank you. First of all, everybody, thanks for joining on what is a sunny day here in Stockholm for the Mendus Q1 financial report and business update. In Q1, we reported the feedback we got from the regulatory agencies on our preparations for a registration trial with our lead product, Vididencel in AML. That feedback was supportive of our efforts, both in terms of the trial design and other trial-related preparations, but also with respect to our next steps that will move the production of the product towards large-scale GMP production. It is important we stay close to the regulators and ask them for feedback regularly to make sure that we are moving in the right direction. That was something we confirmed in the press release earlier this year.
We also are preparing a deeper pipeline of earlier-stage trials to address broader patient populations in acute myeloid leukemia, but also related diseases like chronic myeloid leukemia. We presented supportive data end of last year at ASH in that direction, and we have ongoing research programs to support those efforts. We are actually starting to prepare for those trials as part of our deeper trial pipeline. As an important part of the overall late-stage development strategy, we are setting up large-scale GMP manufacturing, so manufacturing of Vididencel product for clinical use. It's a very important step, not only to support the late-stage clinical development, but also in the end to make sure we have a commercially attractive product that is ready to be launched in the market. We started the expansion of the clinical development of Vididencel with a trial called AML-22 Cadence.
It's a trial that is managed by the Australasian Leukemia Lymphoma Group, and we were happy to report that the first patient was recruited in the first quarter of this year, and recruitment has picked up since. We presented data from our research efforts with the DCOne platform. It's a specific technology platform that we have developed in-house. As part of our solid tumor pipeline, we are working together with the University Medical Center Groningen on ovarian cancer. As part of that collaboration, we run a clinical trial called the ELISAN trial, on which we have presented updates, and we will also present new updates at the upcoming ASCO conference. Also, as part of that research collaboration, we are looking into additional applications of our DCOne platform.
One of the applications we found is that we can make so-called tumor-infiltrating lymphocytes, or TILs, with the use of our platform. Why is that relevant? Because those cells have been identified as potentially useful for therapeutic purposes. There is also a first product already approved based on TILs, but you have to operate patients specifically to extract these kinds of cells for therapeutic purposes, and you need to be able to do that consistently. That is a big challenge in the field. The fact that we can use our DCOne platform to improve the production of TILs could be a potentially valuable step in the development of this product. We are very happy with, of course, the total collaboration with the University Medical Center Groningen on ovarian cancer.
A very important announcement was the one we made yesterday morning about the appointment of Tariq Mughal as our new Chief Medical Officer. Tariq will be extremely instrumental in helping to shape up and support our late-stage clinical development. Next slide. I will hand it over to Lotta Ferm, our CFO.
Yep. Hi, everyone. For the period of the first quarter, the first quarter in 2025, we have an operating profit of - SEK 30 million. Since we have no revenue, it's only cost. The P&L consists of cost. The cash position at the end of Q1, it amounts to SEK 84.7 million. Those who remember the cash position at the year-end, it was SEK 101.9 million. It means that the cash burn during Q1 has been approximately SEK 16 million. The difference between the cost, SEK 30 million, and the cash burn, SEK 16 million, is that we have received a grant from Oncode-PACT, and that was about SEK 6 million, but also that the cost for the tech transfer to NorthX is prepaid, so it doesn't hit the cash burn.
We still have quite a decent cash position, and it will take us over the year-end and into Q1 in 2026.
Thanks, Lotta. Why are we relevant? This is just a reminder on how we are guiding our programs through the immuno-oncology landscape. The immuno-oncology landscape has been shaped by the immune checkpoint inhibitors that have delivered long-term survival up to the point of cure in a broad range of solid tumors. The leading checkpoint inhibitor, Keytruda, has raised roughly $30 billion in 2024. It also means that this class of drugs has taken up a lot of the space in the cancer immunotherapy landscape. What has not materialized is that they support the higher response rates of patients to checkpoint inhibitors in combination with other immunotherapies. This has been quite a disruptive finding as an outcome of more than a decade of immuno-oncology research, which has basically not led to a much larger group of patients responding to checkpoint inhibitors due to other immunotherapy.
It means we had to look very differently at the landscape. As a result, as Mendus, we chose already some time ago to focus on those tumors that are not responding to checkpoint inhibitors. That has been a choice we made strategically early on in the company. We have stopped trials in the past in combination with checkpoint inhibitors. We have also steered away from the main field of checkpoint inhibitors in solid tumors, and we only focus on those tumors that are not responding to checkpoint inhibitors, and that includes blood-borne tumors. Now, why is this relevant from a market perspective? The current immunotherapy landscape, based on the revenues with immune checkpoint inhibitors, is roughly $50 billion, and to a large extent, that is related to Keytruda as the leading checkpoint inhibitor. Those checkpoint inhibitors have not been effective in blood-borne tumors.
Both with existing and with new checkpoint inhibitors, there has been very limited, if any, real breakthroughs in the blood-borne tumors. That is still a very sizable market that, related to immunotherapy, could add up to $16 billion. That is why we are so interested in moving our product forward. The lead indication that we are pursuing is acute myeloid leukemia. It's called acute myeloid leukemia because it's a very aggressive disease that also has a very high relapse rate. Actually, the only way to stop the disease after initial high-dose chemotherapy is to provide patients with what's called bone marrow or hematopoietic stem cell transplant. That's the only curative approach, but it's unavailable to the majority of patients. Even after transplant, the major reason for transplant failure is still relapse.
This is a disease that comes back very quickly if left untreated, and you can't continue to treat patients with highly toxic chemotherapy. You have to come up with something else. Immunotherapy, in principle, would be a very good solution to train the immune system and take care of the residual cancer cells. That phenomenon is called measurable residual disease, or MRD. It means that the cancer cells can already be detected. That's in the majority of cases after chemotherapy. It is also considered a critical factor in predicting relapse. We have been treating with our product patients that had an MRD-positive status, in which the presence of residual cells was confirmed. These are the data that we have also presented at the end of last year because this is the data we presented at ASH, a large hematology conference.
What you will see is that the long-term survival of patients is remarkable. In this case, 20 patients were treated with our product. They all had measurable residual disease, and the majority of patients was alive at 42 months median follow-up. Actually, also the majority of patients was still in first complete remission. This is why we think this is really the program that we need to prioritize and move forward. Also, in AML, there are currently two backbone drugs that also represent the big dilemma for doctors and patients dealing with this disease. One drug is called azacitidine, and that is either an injectable or an oral formulation, which is relatively safe but not very effective. The other drug is called venetoclax, and that is allowing more patients to achieve complete remissions.
It is a very toxic drug, so you cannot use it over prolonged periods of time. Both drugs have their place in the treatment of AML, but they're also both not perfect for maintenance therapy. This is how we positioned our product. Currently, we are on the left side of this graph, which means after chemotherapy, those patients which are not eligible for transplant are treated with our product. For future trials, we will do it in combination with oral azacitidine, which is now approved in this patient population. We also want to make clear that there is a broader AML maintenance population that we can potentially treat with our product. That includes patients that have undergone a transplant where we can boost the immune system against the leukemic cells.
It includes patients that are treated with azacitidine and venetoclax as a combination, as an alternative to high-intensity chemotherapy. Based on the phase two data and also supported by the feedback we received from regulatory agencies, we are moving forward towards phase three preparation. It means we take all the steps necessary to complete the protocol, to set up the network of hospitals we need to support the trial, but also importantly, that we are working towards large-scale production of Vididencel, which we want to be in place before we engage in the phase three trial. The main reason is that we do not want to change the manufacturing during the trial. The manufacturing we are now setting up is the process we will also use in the end for commercial launch of the product.
As part of the expansion of the clinical development, we have teamed up with the Australasian Leukemia Lymphoma Group and with one of the leading KOLs in the field of acute myeloid leukemia, Professor Andrew Wei, who's at the Australian Centre for Blood Diseases in Melbourne at Monash University. This is a trial that's extremely valuable for us because it's immediately combining Vididencel with oral azacitidine, but also it addresses a broader patient population, in this case, both MRD-positive and MRD-negative patients. As mentioned, we started the recruitment of patients earlier this year, and that recruitment is now ongoing. We continue to open up additional centers to ramp up the recruitment as much as possible this year. The first stage of the trial will be 40 patients, and after that, we have the possibility to expand the trial with another 100 patients.
In this trial, the combination of oral azacitidine with vididencel is compared versus vididencel only, sorry, versus oral azacitidine only. The additional trials that we are preparing for in our deeper trial pipeline is a positioning of the product in the post-transplant setting. As I mentioned, relapse is the main reason for transplant failure. There are no approved drugs currently for maintenance after the post-transplant setting. It is an attractive setting also from a commercial and competitive landscape perspective. The post-venetoclax patient population is a growing patient population as an alternative to chemotherapy. We think that is also an important patient population to address. We provided supportive preclinical data at the ASH 2024 conference, so December last year. As an additional indication, we have been exploring chronic myeloid leukemia.
The main reason is that this is a patient population that largely stays alive over prolonged periods of time because of tyrosine kinase inhibitors that control the disease. Patients have to take drugs lifelong, and it will address a high unmet medical need if immunotherapy could basically allow more patients to be taken off drug in a safe way while keeping their disease under control. This is also a relatively sizable market opportunity, which is why we wish to address it. Also here, we have an ongoing preclinical program of which we presented part of the data at ASH end of last year. As an overall pipeline overview, the phase three preparations are ongoing. We have the advanced two trial and long-term follow-up, the data which we presented, and the Cadence trial now picking up recruitment.
We have a deeper pipeline of hematology opportunities, and we have earlier stage programs in solid tumors. As I explained, that also includes the ovarian cancer collaboration that we have with the University of Groningen. Overall, we look forward to progress towards late-stage clinical development supported by the EMA and FDA feedback. The GMP readiness is expected second half of this year as an important milestone for this phase three readiness. The expansion of clinical development is ongoing in the Cadence trial and is in preparation for broader patient populations in AML and adjacent diseases. Finally, to conclude, we are very happy with the appointment of Tariq Mughal as our Chief Medical Officer. Tariq is bringing a lot of expertise in hematology and oncology.
He has an international career both in the U.S. and in Europe, and he has a network that is very rich and that will support our late-stage clinical development plans. Also, very importantly, he is a person that can make the complete translation from scientific data and early clinical data to, in the end, market needs, and that also brings an industry network that will allow us to validate our plans. With that, we are really happy and proud that Tariq joined, but also, of course, very importantly, he strengthens our late-stage clinical development abilities. With that, I would like to conclude the presentation and open for any questions.
To ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christian Binder from Redeye. Please go ahead.
Hi, and thanks so much for taking my questions. To start off with, when it comes to the new CMO recruitment, that's obviously a very impressive profile. Can you also elaborate a little bit on your approaching phase three readiness? What steps are you taking to kind of make the handover as smooth as possible so as to not potentially delay your development plans, if you understand what I mean?
Yeah, of course, Christian, but I think Tariq is somebody who will hit the ground running. Also, of course, we are very happy with the very constructive clinical team that we have, including our former Chief Medical Officer, Jeroen Rovers. We separate in a very good way, and he will also be very instrumental in handing over his responsibilities to Tariq. Secondly, this will only accelerate our phase three preparations because as part of the phase three preparations, you have to identify the clinical centers, and you have to identify in more detail the strategy to make sure that in a competitive landscape like acute myeloid leukemia, you work with the right centers, you develop the right level of commitment from the centers contributing to the trial to make sure you actually start recruiting patients.
All in all, we really believe that this is not only, let's say, a longer-term investment in strengthening our late-stage clinical development abilities, but also that this will be an immediate accelerator and catalyst for the preparations for phase three and the additional trials that we are contemplating to prepare for.
That's great. My second question is about the AGM, like the new board member today, who've got a lot of experience in M&A and business development. Should we see that more as a "just in case" recruitment, or should we interpret that as a more decisive move towards potential business development later this year?
I missed the nuance in the first part of your question, Christian. What was the relationship between the AGM and the board members and business development?
My question was the new board member, board director that was elected today, has quite a lot of experience in both M&A and business development, et cetera. Should we see that as a more decisive step to, let's say, a potential licensing deal later this year?
I think everything adds up. It's not that with José Ochoa, we will all of a sudden start with business development or U.S. strategy. That strategy is in place already over a prolonged period of time. We have a very good finger on the pulse with industry. We are in touch with all the larger pharma players. I think to find the way forward for the company in terms of the progress we are currently making, which is in our responsibility, including the large-scale manufacturing and the preparations for a late-stage development plan, that is all part of that interaction. Of course, we look at the bigger picture. We keep in mind that the U.S. is an important market for us.
We keep in mind that for pharma validation, including also with a personality like Tariq, for example, and the network that he brings, it's very important in becoming more comfortable with the program and the way we take things forward. It's additive, I would say, Christian, and not a change in course.
All right, perfect. That was all from my side. Thank you so much.
Thanks for joining.
The next question comes from Aaron Aatkar from Edison Group. Please go ahead.
Hi, good afternoon. Congratulations on the progress, and thanks very much for taking my questions. I just noted that there were some differences in terms of design, mainly inclusion criteria between the Cadence trial and the planned registrational trial. Just wondering if you could recap those for us and remind us of the rationale for the difference in choices.
Absolutely, Aaron. Sorry about the spelling out of your last name. That's one of the prices you pay when you have a synthetic voice. Thanks for joining. With respect to your question, there were a couple of nuances between, let's say, the Cadence trial and the phase three registration trial. The Cadence trial is a trial that is investigator-sponsored. It is a trial design that was basically developed under the watch of Andrew Wei. For us, the importance of the trial is twofold. It first of all combines the product with azacitidine directly for the first time. It is good if that's your plan for phase three that you already do some de-risking by combining it in a parallel trial. Also, we have confirmed with FDA that we can use the safety data from the Cadence trial also for our global registration dossier.
Secondly, when you want to expand your patient population, it's best to do that in parallel and not as part of your phase three strategy. In other words, the most obvious choice to make when you have solid phase two data, which we currently have based on the MRD-positive patients we treated in the phase two, the most obvious choice to make is to base your phase three on the phase two data. There was another technical element associated with it, and that has to do with the relative effect size. In the registration trial for ONUREG, which is the brand name for oral azacitidine, the patients that had an MRD-positive status did extremely poorly and much worse than the patients that had an MRD-negative status. Also in the broader clinical picture, it's well established that MRD is basically defining a poor prognosis patient population.
If you want to have a registration trial, you want to have the largest possible differentiator between the treatment arm and the control arm. That's why it's logical in the phase three to focus on the MRD-positive patient population, whereas in the Cadence trial, it's interesting to already start broadening the addressable patients by also including MRD-negative patients.
That makes a lot of sense. Thanks very much. Questions relating to the technology transfer associated with NorthX. It is great to see that that is progressing positively. Just looking at the tech transfer costs, we noted that they were slightly lower than expected based on prior quarters within Q1. Just wondering if you could provide a bit more color on what drives the recognition for these costs each quarter.
Yeah, I'll just answer it high level and Lotta, you can jump in if we need to add more detail. The long story short, Aaron, is that we have pre-invested in this alliance. The money we raised in 2023 and the beginning of 2024 included a SEK 90 million investment into the manufacturing alliance with NorthX. It was because they also had to basically establish a specialized facility for our product, which we completed in early 2024. After that, now as part of the tech transfer, we started the actual runs, the large-scale production runs, first training runs and engineering runs. Now we're shifting towards GMP production, which will hopefully deliver the first batches in the second half of this year because that's the main aim, of course, of this collaboration.
You have the basically monthly ups and downs with respect to activities actually performed and realized and also invoiced within that alliance. That is the best color I can give you on that. I'm not sure, Lotta, if you have any additions to that.
No, it is like that when you run big projects that some parts of the year or some months, it's a lot more activities and therefore also a lot more spendings. There are weeks or months with less activities. Of course, the cost goes down. It is not split in equal parts over the year and by month. It's the same with clinical trials. Sometimes there is more activity, then the cost is higher that month, and then it goes down. It is the type of business we are into with big projects. The costs go up and down.
Does that answer your question, Aaron?
Yeah, that's very helpful. Thanks very much. No more questions from me. Thank you.
Thanks for joining, Aaron.
More questions at this time. I hand the conference back to the speakers for any closing comments.
Again, thanks everybody for joining, and we look forward to keeping you posted on our progress throughout the rest of the year. Thanks so much for now.
Thank you.