Welcome to Mendus Q2 Report 2025 presentation. During the questions and answers session, participants are able to ask questions by dialing *55 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 and welcome everybody to the Q2 webcast and business updates of Mendus. As a summary of the key events in Q2, we have presented data at multiple conferences of the ongoing ADVANCE II Phase II trial in acute myeloid leukemia, showing that our immunotherapy vididencel improves T-cell repertoire and also that it acts across broader mutation ranges of AML. We had shown this in the past already in our earlier studies, but now also in the ADVANCE II trial, we specifically focused on the common mutation called NPM1. The relevance of this is that we are showing and continue to show that we stimulate broad immunity against residual disease and also that our product acts across different subtypes of AML.
That makes it very different from targeted therapies that by definition are always dependent on specific mutations being present in the disease and also with quite a high risk of what's called clonal escape. If you put a lot of pressure on one specific mutation, patients will develop new clones of the disease that will be resistant to that specific drug targeting that mutation. The fact that we see a very broad immune stimulation and also in this set of data, but also earlier data sets, that there is no association between the effectiveness of the product and the actual cytogenetics, so the makeup of the tumor, that makes it a very suitable strategy broadly across AML subtypes. We are progressing with NorthX Biologics and our manufacturing alliance to deliver large-scale GMP batches that will support our late-stage clinical development and in the end, commercialization of the product.
We have strengthened in the person of Tariq Mughal, our late-stage development capabilities to shape our late-stage development strategy, particularly in hematology-oncology. We have started to recruit patients in the AML 22 cadence trial in the beginning of the year, and we can say that that is ramping up very nicely. We will provide a more detailed update in our next strategy update, but it's clearly picking up momentum and we're very happy with this trial in which we will talk in a bit more detail further down the slide deck. Recruitment is ongoing and is picking up as we hoped for. In the deeper pipeline, our earlier stage pipeline, we have a Phase I trial in ovarian cancer.
For the first time, we presented data of that trial at a major conference called ASCO, showing that tumor-directed immune responses were elicited by the product, but also very importantly that they are associated with progression-free survival in this very high-risk tumor type. Finally, as one of the key events after the closing date of June this year, in July, the United States Patent and Trademark Office granted us a key patent that covers the use of vididencel in ovarian cancer. Handing it over to Lotta to summarize the financial overview. Lotta, I think you are on mute.
Yes. Hi everyone. The cash burn for the period for the Q2 was SEK 26.9 million and for the first half year, it was SEK 42.9 million. The difference in the H1 operating result and the cash flow is mainly related to prepaid expenses, and that's also mainly the NorthX cost for the tech transfer. If we compare the figures with last year, we can see that they were a lot higher because there was more working on the tech transfer, higher activity last year than it is this year. Now we are going into a more late-stage production phase. The cash position is SEK 58.9 million at the end of the second quarter. We also have some shares in the balance sheet. We have 1.4 million shares.
They were issued after a decision from the AGM to cover bonus payment for the employees and to cover the board fee for those who choose to use this opportunity. The vast majority of the employees and also the majority of the board members have chosen this opportunity. We still have some shares in the balance sheet, and it's to cover tax and social fee, and there is also an extra part because we didn't know the share price. We have got the mandate to sell these shares in the market, all of them, but it doesn't mean that we will sell all of them. We will only sell shares if it's a good opportunity to sell shares. That's everything from me.
Thanks, Lotta. Just to be clear, the instrument of share-based compensation on the one hand is an extra incentive for management and board and employees related to the share price, but of course, it's also a significant cash saving mechanism. Let me continue with the operational update. For most of you, this must be clear from our earlier presentations, but just to emphasize two important points of our positioning in acute myeloid leukemia. Acute myeloid leukemia is a bloodborne tumor that is very aggressive and basically needs to be treated immediately with high-dose chemotherapy. Most patients relapse and die from the disease. Survival, five-year survival has been quite constantly in the last decades below 30%. That is mostly related to hematopoietic stem cell transplant. The only potentially curative approach at this point in time for AML is a hematopoietic or bone marrow transplant.
That comes with serious side effects, including transplant-related mortality, chronic graft versus host disease where the transplant actually attacks the patient's body, and it leads to very serious side effects. The transplant option for the majority of patients is not available. That is where we play with vididencel because it does deliver potential long-term disease-free and overall survival. It has a very good safety profile. It will allow a much larger patient population to benefit from immunotherapy. Very crucial is this pattern that we have discussed before. This is data we presented end of last year. This trial is still ongoing. The long-term survival data are still being collected. Very importantly, you see a striking picture, which is that after an initial quick relapse and also death actually of patients in the first 6- 12 months, you start to see a plateau.
The plateau means patients are really in a stable situation. Some of the patients have already passed five-year survival after being treated with vididencel. At a median follow-up of around 42 months, we still haven't reached median relapse-free and overall survival because the majority of patients remain alive now. That is what we are after. At this point in time, we have an estimated five-year survival of 58%, whereas current standard of care, and like I said, also it's been a number already the same for a very long period of time, long-term survival in AML is typically not above 30%. In the total acute myeloid leukemia (AML) landscape, we are currently focused on those patients that are eligible for high-intensity chemotherapy. That's roughly half of the patients. To date, there's only one drug approved next to post-remission transplant, so bone marrow or hematopoietic stem cell transplant.
That drug is called oral azacitidine. We will show a little bit more about that drug, but that drug is in principle not curative, but it is delaying disease and it has been approved as the first drug for this post-remission treatment of AML. You have the other half of patients which are deemed chemo-unfit. These patients are not eligible for high-intensity chemotherapy. Remission rates have been extremely low, but that is where now a new drug called venetoclax is dramatically changing the picture. It means that more patients achieve complete remissions, but those patients in principle are not eligible for transplant. AZA plus venetoclax is then used over longer periods of time and comes with very serious side effects.
The need for post-remission therapy is much broader in the total AML field and it's also growing because of the success of getting more patients in a complete remission with venetoclax. As a first step, we decided to combine vididencel with oral azacitidine. As you can see on the right, oral azacitidine has a temporary effect. This is MRD positive patients, patients with residual disease that were treated with azacitidine or a placebo, which is the blue line. You can see that there's a very quick drop-off and also that there is not a plateau. In the end, all patients relapse and also all patients pass away, but there is a separation of the curves and the relapse-free survival median shifts from 2.7- 7 months.
That's a very different picture from what we saw with vididencel, which is immunotherapy, which in principle leads to a lot more durable clinical remission. To combine these two drugs could be potentially synergistic and that is why our first next trial after the trial I just showed, which was a single agent trial, is a combination trial with oral azacitidine. The five-year survival of the registration trial of oral azacitidine has been published with Andrew Wei and we collaborate as a first author. What it shows is that the five-year survival is in line with what has been the situation for a long period of time. Below 30% five-year survival with this drug. We are currently recruiting patients in the cadence trial, or formerly the AMLM 22 cadence trial. It's a collaboration with Andrew Wei, Principal Investigator, but also with the Australasian Leukemia Lymphoma Group.
This is saving us a lot of money. It's an investigator-sponsored trial supported by ALLG, and the trial is sizable. We would first treat up to 40 patients in stage one, which is currently ongoing. The trial has the option to include another 100 patients for a proof of concept phase. We are in parallel preparing for a go-to-market strategy and the registration trial, and that not only comprises the trial design and the alignment with the regulatory agencies, but it also comprises the upscaling of our manufacturing because we don't want to change the manufacturing process after we have engaged in a registration trial. The current process we are implementing at NorthX Biologics is also the process that we wish to use for market launch and commercialization once the product reaches the market.
That is ongoing, and we anticipate to release the first GMP batches before the year end, which is an important milestone on the path to registration trial readiness. As I mentioned, there's a broader patient population in acute myeloid leukemia (AML) that we should consider, and we have prepared the outline of several trials, including a trial with the azacitidine venetoclax combination that I described and a trial in the post-transplant setting. We have looked, and we've discussed it in earlier calls, but we've done a very extensive market analysis on potential indications in bloodborne cancers beyond AML. We have decided that chronic myeloid leukemia (CML) is the prioritized indication. The reason is that it's a very large market. It's actually larger than AML because it is with patients that stay alive. This is what you call prevalent patient population, whereas AML is incident patient population.
It's new patients that are encountering the disease, whereas in chronic myeloid leukemia, patients are a lot more stable because they have an effective treatment, which is tyrosine kinase inhibitors, a small molecule way of suppressing the disease. However, these patients in the end want to avoid lifelong treatment with these TKIs, and that's where immunotherapy and vididencel specifically could help patients achieve more and more successful treatment-free remission rates. In June at ASCO, we presented our data from the ovarian cancer trial. We don't emphasize this trial a lot because it's still in a relatively early stage. It's a Phase I trial, safety feasibility trial. This was the first time we presented this data at a large clinical conference.
The reason is that the data are becoming more mature and that we start to see a picture arise that may show that there's an association between the product and durable survival in this very hard-to-treat tumor type. This is high-grade serous ovarian cancer. It's a disease that is treated by a combination of surgery and chemotherapy. The reason it is one of the most deadly diseases in the gynecological field is that the recurrence rate of the tumors is very high and the recurrent tumors are also very poorly responding to the original chemotherapy. They're also very poorly responding to other drugs available and other solid tumors like targeted therapies or checkpoint inhibitors. This is a very difficult-to-treat disease.
The interesting pattern we're seeing, and this is the swimmer's plot we also presented at ASCO, is that if you focus on the green arrows, they are the patients that are still in a progression-free follow-up. Those are the patients that could have a chance of long-term survival. Six out of the seven patients were patients that also showed very strong immune responses after having been treated with vididencel. It means that there is an association between the vididencel treatment and the tumor-directed immune responses that we have observed and the progression-free survival. Now, why are we still careful in expressing our expectations around this trial? First of all, we want to better understand why certain patients are responding and other patients are not.
We are continuing to do a lot of underlying analysis to see what makes a difference, for example, in the immune system of patients that do not respond and progress to the disease and the patients that have a good response and do not progress to the disease to date. Secondly, also, the immunotherapy effect is most clearly visible in long-term survival. The immediate effect of immunotherapy is not there. That's mostly with chemotherapy or with targeted drugs that you start to see an immediate slowing down of cancer cells. What you see with immunotherapy is that the long-term survival improves. You get to see a plateau, which we now clearly have established in AML. The ovarian cancer trial is still a little bit early to say that we actually start to see the survival benefits.
What we will do in the coming months is to, on the one hand, continue to follow up these patients. We expect to report the two-year survival of the patients still alive in the fourth quarter. In the meantime, we will also look deeper into the underlying data to understand why certain patients are responding very well to the therapy and also have a clearly improved progression-free survival based on the data we have today. This is the reason we were excited to present our data at ASCO. We will follow up with the long-term survival follow-up of these patients. As an outlook, the Phase II proof of concept data have only been further strengthened in the second quarter by the data we presented at CIMT and at EHA, showing that the drug can be positioned broadly in acute myeloid leukemia (AML) as an active immunotherapy against residual disease.
The current AML cadence trial is picking up momentum and recruitment is ongoing. That will also be a trial in which we, for the first time, deliver randomized control data in combination with current standard of care. The global registration trial preparations in AML are underway. That is, of course, strengthened by the appointment of Tariq Mughal. We are, as a basis for late-stage development, setting up the large-scale manufacturing, which is on track to deliver GMP material in the second half of this year, before the year end. We have multiple trial opportunities identified to expand the addressable patient population in AML and with chronic myeloid leukemia (CML) as an identified prioritized indication. As very near-term milestones, we will have continued follow-up of the Advanced II trial, continued progress of the cadence trial that will deliver the first randomized control data in combination with oral azacitidine.
We are preparing for registration trial readiness, including the large-scale manufacturing. We will initiate exploratory trials to broaden the addressable patient population in AML, but also to open up the CML indication. Finally, in the fourth quarter, we expect to report two-year survival data of the Allison trial in ovarian cancer. As a last remark, it's, of course, very important when you enter into a late-stage development phase that you keep a very close finger on the pulse with both the KOL landscape, so the landscape of clinical experts that can not only give advice, but that can also support your clinical trials, but also that you stay close to the pharmaceutical industry. This is what we have been doing continuously in the background to make sure that the next steps in the clinical development of vididencel match not only the medical need, but also the industry expectations.
That combined will lead to a more detailed clinical development strategy. We will plan for a clinical development strategy update in the early fall of this year. With that, I'd like to conclude the Q2 update and open the session for questions.
If you wish to ask a question, please dial #KEY5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #KEY6 on your telephone keypad. The next question comes from Qian Li from Pareto. Please go ahead.
Hi, good afternoon, and thanks for the update. Just one quick question from me. Regarding the people to readiness, how can we break it down into the steps that you need to clear in order to start the registration trial? Can we assume that the tech transfer with NorthX Biologics is completed, and what are the remaining steps? Yeah, thank you.
Thanks so much for joining, Qian. Perfect question. As you can imagine, there are different assessments that we have to make in order to be able to engage in the Phase III trial. One is the clinical material to support the trial. Ideally, that is the same material that you will also use for market registration and commercial launch. That is why the collaboration with NorthX Biologics and the large-scale GMP manufacturing is such an important milestone on the path to clinical stage readiness. As you can imagine, there is also constant alignment with the regulatory agencies because you want to make sure that if you engage in a trial and you complete the trial, your product will also be registered and the trial will be according to expectations. Also, very importantly, and as you can imagine, this is something we have been working on very actively in the background.
If you enter a registration trial, you have to already prepare for, in the end, the market and also the budget associated and the clout that you need to motivate a broader international group of clinical sites to engage in your trial. This, of course, is benefiting from a partnership with pharma. What we are and have been doing since the last 12- 18 months, as soon as we knew that the Phase II data could provide a good basis for a registration trial, is listening very carefully to the KOLs that are part of the international landscape and that could support our Phase III trial, but also the feedback from pharma.
That, combined with the appointment of Tariq, is the total mix we are currently putting together to make sure that the path we will follow to market registration is an optimal path that we can also realistically take. Secondly, in the options we have created to broaden the addressable patient population, we make the right choices. Tariq started in May. As you can imagine, that has accelerated tremendously all of these efforts. We need a bit more time to condense all of that into a final strategy that we will explain in more detail somewhat later down the line this year.
Thank you, Erik. That's clear. Do you expect to release the follow-up data for the vididencel survival update later this year?
The short answer is yes.
Okay. Thank you. Thanks for taking my question.
Thanks, Qian.
The next question comes from Aaron Atkar from Edison Group. Please go ahead.
Hi there. Thanks very much for the presentation and for taking my question. I just wanted to understand, first of all, I think you might have touched upon it, but can we expect any more expenses related to the tech transfer in the second half of this year? I know it's been closer to zero in the prior two quarters, but we understand that there's still some prepaid expenses on the balance sheet.
Yeah. In principle, Aaron, we will complete the project, the current project with NorthX Biologics, and then, of course, we have to see how we continue for a longer-term global supply contract with NorthX Biologics and potentially also expanding the network of manufacturers in the end to make sure we have a stable global supply of the product. The initial part, which is, first of all, the tech transfer, so the transfer of the process to their facilities, and then the manufacturing of GMP material, that is in principle being paid from the prepaid amount of SEK 90 million that we already have invested into the alliance in 2023.
Okay. Perfect. Thanks very much. Just one more question. Looking at the registration trial, we see that there's quite a high number of sites relative to the number of patients. Could you just help us understand the reason behind this? I think there's 100- 120 sites suggested for 150- 200 participants.
Yes. There are two parameters, I think, that determine recruitment rate, Aaron. One is the incidence of the disease. AML, despite the fact that it's a rather sizable market with good pricing opportunity for new drugs, is still a limited number of new patients per year. The numbers I showed earlier on, so roughly 45,000 patients in Europe and the U.S. Secondly, and that is just as important, you have to work in a competitive clinical development landscape. There is a lot of trial activity in AML, so far not with real breakthrough success, except for venetoclax, which made a major difference for patients in the chemo-unfit population. There is going to be more clinical activity, particularly in a new class of drug called menin inhibitors. Some companies have announced large clinical trials in that setting.
You have to basically make sure that you have enough sites open to capture those patients that are diagnosed with AML that are eligible for treatment with your product. That is also why we have this active dialogue not only with industry, but also with KOLs that are influencing larger networks of clinical centers to make sure that people appreciate the value and potential benefit of your product to patients. In the end, it is a competitive landscape, not only on the market, but also in the clinical development landscape. That is why we are conservative. We just anticipate that we have to open up a lot of centers to run the trial to this patient in the end.
Okay. That's very helpful. Thanks very much. No more questions from me.
Thanks.
As a reminder, if you wish to ask a question, please dial #KEY5 on your telephone keypad. There are no more phone questions at this time. I hand the conference back to the speakers for any written questions or closing comments.
Thank you so much, everybody, for joining. We look forward to our strategy update, which is almost around the corner. I would say early fall means end of September, early October that we will be aiming for. We will share details shortly. We very much look forward to keeping everybody up to date with our progress. Thanks so much.