Welcome to the Mendus Q4 2023 presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the speaker, CEO Erik Manting. Please go ahead.
Good morning, everyone, and thanks for joining our quarterly webcast related to the release of our Q4 and year-end numbers. I will guide you through an update of what happened in the past year and also forward-looking, how we will take the company in the next steps of its development. 2023 was a transformative year for Mendus. We saw in our phase II trial, the ADVANCE II trial, long-term survival in AML patients with a high-risk profile due to their measurable residual disease or MRD positive status. And that aligned with an observation which we saw in the phase I trial, which we have completed and which we published last November, where also we saw that patients, particularly patients with a relatively low disease burden, but still with a high-risk profile based on their cytogenetic tumor profile, showed long-term survival.
This was for us, a confirmation that we were onto something special, potentially special in the sense that, we are addressing, a very deadly disease due to a high relapse rate, and we show after treatment with vididencel, long-term survival, in phase II in the majority of patients. This was a major signal for us, and it allowed us to raise money in the summer. We raised a rough, around SEK 370 million through a fully secured rights issue, but also with a directed issue to Flerie as an important new shareholder for Mendus.
Very importantly, at the same time, we were able to announce a manufacturing alliance with NorthX Biologics, which is a Sweden-based biologics manufacturer, to support the large-scale manufacturing of vididencel, our lead product, which is needed to make sure that we can enter into late-stage development and in the end, commercialization. We showed positive data from our ALISON trial in ovarian cancer at different conferences, demonstrating and confirming the potential of vididencel to trigger very broad and robust immune responses in cancer patients. And we had multiple abstracts, including also on our intratumoral primer, ilixadencel and publications in peer-reviewed journals throughout the year. Very importantly, we secured Fast Track Designation from the FDA end of last year.
We were able to announce a collaboration with the Australasian Leukaemia Lymphoma Group , which will allow us to expand the clinical testing of vididencel as an AML maintenance treatment in combination with standard of care in a larger randomized controlled trial, which will be carried out by ALLG. Finally, we reported positive survival data from the ADVANCE II trial, which confirms a very stable picture with many patients now in long-term follow-up after our phase two trial. We combined that with immunomonitoring data showing actually that the robust immune responses we observe with vididencel are also associated with the durable clinical responses. As a reminder, we are developing vididencel as a cancer maintenance treatment. Why is it relevant? First of all, tumor recurrence is by far the deadliest cause related to cancer.
So the initial treatment with conventional methods like chemotherapy, for example, is often successful. The deadliest cancers are deadly because they come back very quickly after the initial treatment. Also, from an immunological perspective, the immune system is no longer inhibited by cancer cells being around, and it gives a better chance of an active immunotherapy like vididencel, which needs to train the patient's own immune system to be successful. Vididencel has a competitive product profile. It's a product, which is based on a cell line, which allows for scalable and centralized manufacturing. It doesn't require, for example, patient material or genetic engineering. It's a cell line which we can grow to large quantities and then transform into the product vididencel. It's off the shelf, so it's readily available for use when it's needed without any delay, and it can be administered by a simple intradermal administration.
Also, very importantly for maintenance treatment, is that it has a very benign safety profile. The only product-related side effect we have observed in the clinic so far, is limited to the injection site, where we see, redness and swelling, indicating that the product triggers a local immune response. And also we could show actually now in the ADVANCE II trial immunomonitoring data, that actually the product does indicate, does trigger, sorry, also a local immune response in the skin, which is next, translating into a more systemic immune response against residual cancer cells. So very safe product with durable clinical response, in acute myeloid leukemia.
Finally, we have a strong regulatory dossier, which is not only based on Orphan Drug Designations in the U.S. and Europe, and a Fast Track Designation in the U.S., but also, for example, validated by an ATMP certificate related to our manufacturing process by the EMA. AML is a highly deadly disease because it relapses so quickly. Actually, if left untreated, almost all AML patients relapse within a matter of months and the only real curative approach is bone marrow transplant or hematopoietic stem cell transplant, in short HSCT. Even after transplant, patients sometimes have residual disease or MRD, measurable residual disease, and relapse is actually also the main reason why transplant fails and why patients relapse.
So relapse in AML is really the main barrier to long-term survival, and that's the medical need we are addressing. This is data we published November of last year from our phase I trial, and it had two very important observations. First was there is a split between the patients with high levels of disease and with low levels of disease. And what we saw was the main correlation for long-term survival was low levels of disease. So patients with less than 10% blasts in their bone marrow, blasts being the cancer cells, showed a much better survival, overall survival than patients with high levels of disease. This confirms the setting I just described, in which we are exploring in our phase II trial.
The second very important observation was that there was no correlation between the cytogenetic risk profile of the tumors of the patients and the outcome. So in other words, also, patients with a very high risk profile responded well to the therapy, indicating that the therapy as an immunotherapy works different from conventional therapies like chemotherapy and targeted therapies. The ADVANCE II trial focuses only on patients with low disease burden, but all with a positive MRD status, so with measurable residual disease. These patients are in a first complete remission following chemotherapy, but with sensitive methods like PCR or flow-based methods, we can pick up the residual cancer cells, and MRD is associated with very high relapse rates, and that makes this patient population a relatively high-risk patient population.
This is the data we presented at ASH last December, and what you see is that initially there is a relatively quick drop, and what we could show is that these patients had a relatively poor immune system. But what you start to see is that in the long follow-up, a lot of patients, actually 14 patients out of 20 patients, remained disease-free over long periods of time, with the longest patient now for five years after initial treatment. And this plateau that you start to see is typical for immunotherapy.
What happens is the immune system is trained, in this case, by the vididencel treatment, and then you start to see that it takes control over the residual cancer cells, and that actually leads to, leads to a much longer survival than what you see with, let's say, traditional therapies like chemotherapy or targeted therapies, which slow down the disease. This is actually long-term disease control. The relapse-free survival, so the amount of patients that are still disease-free, is also a very long with, 11 patients still in first complete remission, but with a median relapse-free survival now at two and a half years. Also, very importantly, at ASH, we showed a much broader immunomonitoring study, which was part of the phase two trial.
So what we did is we collected samples from patients, from the skin, from the blood, and what we could show that was in the skin, there was an immediate triggering of a local immune response. But we could also show that in the blood there was a very broad immune response, not only driven by T cells, but for example, also by B cells and cross-presenting dendritic cells, indicating that the immune system is trained in a very broad way. And also, with respect to the T cells, we saw that there were responses against a broad range of tumor-associated antigens, and what is graphically depicted here, also, that those responses correlated with the survival outcome. This is the current standard of care in AML maintenance. It's the only approved drug called oral azacitidine, or Onureg as a brand name.
What you will see is that the difference between the placebo arm in this registration trial, which is the blue line, and the red line, which is the patients treated with oral azacitidine, is relatively short. So there's a few months survival benefit related to the oral azacitidine, but it has been approved. It's the only approved drug currently in AML maintenance. The other thing you see is the established importance of MRD, but also in this particular study, you see that the patients with MRD have a worse outcome as compared to the patients with an MRD-negative status, with a median relapse-free survival in the placebo group of less than three months, and seven months in the patients treated with aza. What we will next do is to do a larger randomized controlled trial with standard of care.
So we will combine our drug, vididencel, with azacitidine, and we will compare it with an azacitidine-only arm. This is a relatively large trial, and we were very happy to be able to team up with the Australasian Leukaemia and Lymphoma Group , a very active clinical research group that was, for example, also contributing to the trial I just showed for oral azacitidine. They have an umbrella trial set up in combination with oral azacitidine, and they were triggered by the data we presented at ASH and very motivated to set up together with us a trial which combines vididencel with oral azacitidine. Together with ALLG, we will run a trial that initially includes 40 patients but can then be extended with another 100 patients after initial safety and feasibility has been established.
So for us, a very major step forward in being able to explore and expand the clinical expansion of vididencel in a larger patient population in combination with standard of care. AML maintenance is, like I said, the main, maybe solution for the high relapse rates in AML in the field as a whole. And we are currently focusing on patients that have been treated with high-dose chemo and that are still MRD positive. But we will broaden that patient population in the CADENCE trial, which is a trial we will run with ALLG, so to also include the MRD negative patients because they also have a high relapse rate. So it's a broader patient population, but still very much in line with the patient population we treated.
in the ADVANCE II phase II trial, but there's additional patient populations, like I said, also in transplant settings, relapse is very high and is related to MRD. And also there is a new patient population which were deemed chemo unfit in the traditional treatment landscape for AML, but where there's now a new drug called VENCLEXTA, which is very successful in bringing more patients into complete remission, but those patients will also, in the end, require maintenance therapy. So there's a broader positioning that we could explore with vididencel. So the clinical development path is one that is currently driven by the completion of the ADVANCE II trial, which we have read out, of course, now also in long-term survival.
So with a successful readout and the new trial, the CADENCE trial, starting in the first quarter of 2024, which is a larger randomized controlled trial in combination with oral azacitidine. As a company, we will prepare for a strategy that leads in the end to registration, and we can carry out that plan either by ourselves or in combination with a partnership, for example. But this is the plan that we will work out in terms of how the trial will look, how the regulatory feedback will be. And this will be particularly in the combination with oral azacitidine in the patient population we have been addressing in the ADVANCE II trial and now also in the CADENCE trial. But like I said, also there's the possibility to potentially explore additional patient populations in AML maintenance.
Very importantly, the partnership with NorthX Biologics has begun immediately after the summer of last year, and we are now working together with them to set up the large-scale manufacturing of vididencel to support such late-stage development and, in the end, commercial launch. Then we have the trial in ovarian cancer ongoing, which is exploring safety and feasibility in a very different setting, in a solid tumor setting. What we can report and have reported in the course of last year is that also in ovarian cancer patients, we see very strong immune responses and broad immune responses against multiple antigens, upon treatment with vididencel. Of course, we need to show whether that leads to survival benefit or not, and that's a readout we plan for in the second half of this year 2024, ilixadencel, an intratumoral primer based on dendritic cell biology, is a product that has been repositioned
We have explored it in a broad range of solid tumors, but we have decided to now focus on soft tissue sarcomas because that's a group of tumors that responds very poorly to currently available therapies after first-line failure. So patients that have undergone successful first-line treatment still are at very high risk of tumor progression, and checkpoint inhibitors and other immunotherapies have not been successful in soft tissue sarcoma. So this setting will allow us to look for a strong and confirmative clinical signal with ilixadencel with a relatively small number of patients. This is a trial we continue to prepare for in the first half of this year and on which we will update as soon as we are able to disclose the details.
Finally, we use our platform to combine with other immuno-immunotherapy modalities, and we have particularly shown that we can expand so-called memory NK cells, and this is a program that we are working on in our research group to see if we can expand this into a potential new pipeline program for the company. Because also the memory NK cells have been associated with long-term survival in blood-borne tumors, and particularly after transplant. So for us, it's a natural fit with our overall focus related to the lead product, vididencel.
With that, I'll provide an outlook for this year, which is on the one hand, that we are expanding the clinical development of vididencel in AML, for which we have taken major steps, including the collaboration with ALLG and the collaboration, the alliance we have with NorthX Biologics, to make sure we can step up the large-scale manufacturing. We'll have additional readouts from the ovarian cancer trial, including the primary analysis in the second half of 2024, and we are preparing ilixadencel to re-enter into the clinic in soft tissue sarcomas. And finally, we have the research pipeline, which is exploring the NK cell program and novel therapeutic concepts in combination with other immunotherapy modalities. So all in all, we look forward to again an eventful and transformative year.
We have a plan for an investor event on March 12, which we will announce in detail shortly. Please mark in your calendars that on March 12, end of the day, from 3:00 P.M. to 5:00 P.M., we will have a company event to more extensively talk about the company strategy and the way forward. With that, I'd like to hand it back to the moderator and open the Q&A.
If you wish 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 Chien-Hsun Lee from Pareto Securities. Please go ahead.
Hey, good morning, and congrats with the progress. Just trying to understand your strategy for the upcoming AML trial. You decide to include both MRD-positive and negative patients. What's the reason behind it? Isn't the MRD-positive patient will give a higher success chance?
Yeah, I think it's an excellent question, Chien, and, to start with the MRD, part of the question, there is no false positive MRD patients. So in other words, whether you use PCR or flow-based methods to pick up potential residual cancer cells, if it's there, it's there. There are a lot of false negatives. So also when you look into, for example, the QU AZAR trial data, you see that also the patients with an MRD negative status still have a very high relapse rate. So there is a lot of false negatives, where you don't pick up the disease for whatever reason, but it's still there.
We believe that the broader AML patient population will benefit from this approach, and also the effect that we see on relapse-free and overall survival is not a very incremental effect, it's a relatively large effect. We expect to see that also in the broader AML patient population, and then there is no reason to exclude patient groups.
Okay, thank you. And maybe a follow-up question. So if I understand correctly, so the decision of step up to pivotal will happen after your first readout. So, may I ask, what exactly do you need to see in order to make the decision?
Yeah. So on the one hand, we will not be dependent in our progress on the CADENCE trial. The CADENCE trial is just taking a major hurdle for us, which is, you know, a sizable trial, randomized controlled trial in combination with azacitidine. What can we expect based on what is known today is that both compounds, both azacitidine and vididencel, have a very good safety profile, right? But still, you have to show that it's actually holding up. So the most important initial readout we want to see from the CADENCE trial is safety in combination with azacitidine. Right? At the same time, we have already, of course, completed the active study phase of ADVANCE II, and we have the long-term follow-up data, so we're wrapping up the data from that trial to also be able to discuss them with the regulators.
On the basis of that, combined with the initial data from the CADENCE trial, be able to conclude what will be the pivotal trial design, to get this product registered in AML maintenance, particularly in the setting we are currently targeting, which is after first complete remission.
Okay. Thank you. Thanks for taking my question.
Yeah, thanks for joining, Chien.
The next question comes from Antti Siltanen from Inderes. Please go ahead.
Hi, thanks for taking my question. So first, I wanted to ask about 2023. In hindsight, did you have any surprises during the year in terms of cost development or clinical progress or, or any other, other areas?
Yes. Hi, Antti. Good morning. There were, I think, a couple of hurdles that we took, right? And, and in hindsight, the surprises, maybe when you take them, you realize you've taken major steps. At the beginning of the year, we had good data, but we were lacking the financing to step up the clinical development. And we knew we had to do, one way or the other, a larger trial with oral azacitidine, which would be a very costly trial. Not only because you need to engage a lot of clinical centers, but also because today, the oral azacitidine is a very expensive drug, which is not reimbursed everywhere. So we need- we needed to, to do the trial, but we didn't have the means to move forward. Also, we knew we had to step up the manufacturing.
We have here at Mendus, in-house, the research lab and also the so-called CMC team, right, which works on the process development of our manufacturing processes, but we are not a GMP facility. So we need to work with third parties to, in the end, manufacture our product in a GMP setting. Those were major hurdles, which at the beginning of last year, we were not sure how to take them. And so the outcome being that we were able to do a significant raise in the summer, and in conjunction with that, also close the manufacturing alliance with NorthX Biologics, was a major step.
The fact that ALLG was able to set up together with us such an attractive trial design at costs that we can currently afford, and there are some additional benefits to working with Australia, which has to do with, let's say, tax benefits offered by the Australian government. We have set up an Australian daughter company to be able to make use of that as well. That allowed us to take major steps, which at the beginning of last year, we were not sure how to take them. I think that was the main, the main outcome, Antti, of last year.
Great. Thank you. My second question is, I'd like to clarify: when you are going towards the pivotal trial, do you still see the monotherapy arm as an option, or are you purely focused on the aza combination in the pivotal phase?
Right. I think the situation with oral aza is simple. It has been and is still the only approved drug in AML maintenance. So you need to think tactically about what to do, and also with a longer view on whether or not you can circumvent this kind of co-medication or whether you are better to combine with it. And like I said, initially, our main hurdle was that we know it's probably smartest to combine with the oral aza, right? Because aza has been around forever, basically. First, as a subQ, so subcutaneous administration in injected form, now as the oral azacitidine. So a lot of hematologists worldwide are used to working with azacitidine. And although it wasn't very effective, it's still a backbone drug.
For example, also, VENCLEXTA, the drug I mentioned, which is getting more patients in complete remission, is combined with azacitidine. So I think the safest bet is to combine with azacitidine, but again, it was a major hurdle because we had to step up not only the amount of clinical centers we work with, but also to think about how the co-medication will be paid for. And in the current setting, basically, the situation with ALLG is taking care also of the co-medication, right? So we can plug into an already ongoing trial, and that took away a major cost hurdle. So longer term, I think this is the most rational thing to do, and also the initial data from the CADENCE trial will allow us to more clearly refine the clinical strategy in the end needed for registration.
Thank you very much. And my final question, you mentioned the possible indication expansion within AML. So I wonder if you can talk a little bit more about that. So what kind of indications are you thinking about?
Well, first of all, we can't do all the heavy lifting at once, right? So I think the most important part is that we will start preparing for the pivotal trial strategy. But it's pretty obvious that there is a high unmet medical need in AML and also related diseases such as myelodysplastic syndromes or MDS. And yeah, sadly, a lot has failed in that field. Also recently, there were major disclosures from Gilead and Novartis, who had new programs, targeted pathways in also a kind of immunotherapy approach, but they did not succeed in pushing through those programs, and they've recently announced they will stop those programs.
So, on the one hand, it's very sad for the field as a whole and for AML and MDS patients globally, but this also means that there is still a very high unmet medical need that needs to be addressed. So in that sense, we see the opportunity and we feel the responsibility to think more broadly. But first things first, it's just to describe the broader opportunity we currently see, but to make sure that we get to a point where we can enter into a pivotal stage trial in the main patient population we're currently addressing, that's of course the most important thing.
Thank you very much. That's, that's all from me. It's very helpful.
Are you still there?
The next question comes from Christian Binder from Redeye. Please go ahead.
Good morning, and thanks so much for taking my question. I just have one quick-
Hello.
Follow-up. Sorry, can you hear me?
Okay, we seem to have some technical issue here, so please just hold on and I'll make sure that speaker is back.
Hello, can you hear me? Can you guys hear me now?
Just a second, and we'll sort the technical issue here.
All right. Perfect.
The conference call resumes shortly.
Hello, this is the technician. We have some technical issue, but we are sorting it out. So please stay tuned. So we have the speaker back with us. So here is Erik to answer the question.
Hey, everyone. We're doing it the old-fashioned way via telephone line.
All right, perfect. Can you hear me now?
Yes, we can hear you perfect, Christian.
Perfect. Thanks so much for taking my question. I just had one follow-up regarding, you know, the business development side of things. It seems like the plan that you have allows you to proceed pretty quickly from phase II to pivotal stage. At the same time, potential partners usually want to be involved in pivotal stage design. So, you know, what, what are kind of your thoughts around, you know, going it alone potentially or partnering up? How does the risk-reward look, so to speak?
Absolutely. Well, I think the good thing about the data we currently have and also the indication is that we can choose basically, right? So if we can run a trial with a relatively limited amount of patients needed for registration, with the current shareholder base as we have, we may consider to go at it ourselves. But at the same time, we realize, obviously, that a potential partnership will be very helpful in terms of getting things over the finish line and preparing for commercial launch.
So at this point, Christian, I think the most important part is that we will have to take care of the exact planning and design of pivotal stage trial, and at the same time, keeping all options open with respect to how in the end we get to the finish line.
All right, got it. That was all from my side. Thank you.
Thanks.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Well, thank you, operator, and sorry for the technical disruption, people. I don't know exactly what happened, but thanks for being part of the call, and we look forward to keeping you and the rest of our stakeholders up to date with our next steps. Thanks.