Hello, and welcome to the Medivir Audioc ast with Teleconference Q1 2022. 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 section. Today, I'm pleased to announce CEO Jens Lindberg. Please begin.
Thank you, welcome everyone, to our quarter 1 call 2022. If we move to the next slide, please, slide number 2. There will be three of us presenting. With me in the room here at Medivir is Magnus Christensen, our CFO, who will cover the financials towards the end. In the room with me as well is Fredrik Öberg, our Chief Scientific Officer, and Fredrik will cover the sort of the more data and science-driven slides, sort of during the presentation today. I will kick things off with a bit of an overview. If we move to slide number 3, please. As always, important information, and I will not go through it in detail. It's part of our presentation, and you find our presentation on our website as well.
Please have a look there in terms of the more details of this part. With that, we can move two slides forward to slide number 5 and start with the highlights during last quarter. We will split things in two parts, which we usually do when it comes to our lead asset fostroxacitabine or fostrox, as we like to sort of talk about it in a shortened form. We'll also talk about the remainder of the portfolio. The focus will be on fostroxacitabine with regards to information. That's also where we spend most of our time as a company in terms of focus and priority.
In the last quarter, we had first additional biomarker data for the monotherapy, which were presented at the European Liver Cancer Congress and supporting the proof of concept and supporting previous data. Fredrik will touch on this a bit in his slides. Apart from that, in terms of daily business focus, is to continue to initiate additional clinical trial centers in our combination study. Those of you who follow us and know our past know that we initiated the study just at the back end of 2021 when we dosed the first patient in the combination study in one of our sites in the U.K. We had U.K sites up and running from the beginning.
We are now sort of doing quarter one, focusing then on adding additional sites in Spain and South Korea. That's especially important that we have sort of almost at roughly 45% of the planned centers are in South Korea, and that will be important for the future development of Fostrox in that region. Three countries in total, U.K., Spain, and Korea will be part of the phase I-B and the phase II-A. If we look to the other side of the portfolio, the partnered assets, our Birinapant asset, which we out-licensed to IGM Biosciences from San Francisco. Two things in the quarter.
They are also doing a dose escalation study of this combination, which they started sort of in 2021 as well, couple of months before sort of we started the fostrox study. They have cleared the first dose escalation cohort with no DLTs to date. The other part, very encouraging. Recently at the AACR meeting in New Orleans, they presented sort of combination preclinical data which confirmed a strong synergistic tumor cytotoxicity, which we've seen before, but now in a range of tumors. Quite encouraging data sort of supporting this development. Then finally, in another piece of data in the quarter was the subgroup analysis that we've run of the phase II MIV-711 study for osteoarthritis, showing significantly reduced osteoarthritis related pain.
Both the birinapant data and the MIV-711 data, Fredrik Öberg will touch upon a little bit later in the presentation. With that, and then we'll come back to some of the data, et cetera. I'll go through a little bit more details to start with our lead asset program. Can we move to slide six, please? Before we go into that, when we look at Medivir in terms of, sort of as a company and as a team in terms of we're focusing on, there are two elements to our strategy. One, we do believe we have a unique first-in-class lead asset in liver cancer, which is fostroxacitabine or fostrox, as I mentioned.
For the remainder of our portfolio, which I'll show in, on the next slide, we are focused on sort of partnering strategy, finding partners to further develop those assets. We drive the development of fostroxacitabine, and we partner out the remaining assets. If we go to the next slide, which is slide number 7, I will say. This is the pipeline overview. Just to kind of give a snapshot of where we are at the top, our in-house program, which at the moment then is in development or we're running a phase I-B, phase II-A study combination with two arms, which we'll talk about in a little bit, and which is then sort of wholly owned by Medivir and wholly sort of driven from a development by us.
When we talk about sort of next events or next steps in the journey, then the next step is to select dose for each of the combination arm and then sort of move into those expansion. For the other programs for partnering, the green marked programs are the ones that we have a partner for, and the ones in white are programs where we are now sort of exploring sort of partnering options to find a suitable ways forward, that add both value for us and for the compound. As I mentioned previously, the birinapant is currently running a phase I combination study with IGM-8444. You see on the right-hand side sort of the potential next events for each of those assets.
If we stay focused on our lead asset fostrox, let's move 2 slides ahead to slide number 9, please. Before I hand over to Fredrik, like just a reminder that we are sort of at the initial step, we are focused on HCC, i.e. primary liver cancer, for a couple of different reasons. One, it is a significantly growing market, but more importantly, it has a very large unmet need. We're anticipating, as you see on the graph on the left, the market to grow quite significantly in the coming 10 years. On the right-hand side, from an unmet need perspective, it's a quite underserved tumor area. Despite recent advances, there are many patients that still don't respond.
We are seeing overall response rates for systemic treatment sort of somewhere around that 1/3-ish area. What we see from a development perspective is that the growth of the market will likely be driven to a large extent by combinations. Could be two-drug combinations, potentially triple combinations as we move forward. I think that's something to keep in mind as we go through some further details of the program. Clearly a market with a growing market with a large unmet need. With that, I'll hand over to Fredrik Öberg, and we can move to slide number 10.
Thank you. If you're familiar with cancer therapy, you will know that chemotherapy is the backbone of many cancer treatments. However, in liver cancer, chemotherapy systemically administered has been largely unsuccessful. We believe that by the prodrug fostrox, we've solved this problem. One of the reasons why it's probably unsuccessful is that it's difficult to reach sufficient concentrations of the drug in the liver while not at the same time having systemic toxicities. Fostrox is a prodrug. It's taken orally. It's stable in the gastrointestinal tract, taken up and delivered to the liver. In the liver, it's rapidly metabolized. Therefore, we can achieve higher exposure in the liver of the drug. There's some added benefits of this prodrug as well.
We circumvent a lot of the resistance mechanisms that are commonly used by cancer cells. Therefore, we think we can have high exposure and a more potent efficacy in the liver for the tumor cells. On the right-hand panel, this data from biopsies from the phase I monotherapy study. It shows that the DNA damage, which is what this inhibitor induces in the tumor cell, is observed in the tumor, but not in the adjacent normal liver tissue, which is actually just what we wanted to achieve. Normal liver tissue is not damaged by fostrox, but the tumor is. If we move to slide number 11. We did also obviously measure efficacy in the liver measuring the size of tumor lesions.
Now in phase I-B , we allowed patients from many different tumor types. Both primary liver cancer, which is HCC and cholangiocarcinoma, but also liver metastasis from other primary tumors like colorectal cancer. These were patients who had exhausted all their treatment options, so many of them had gone through three, four, five or more treatment lines. If we look at the left panel that's depicting the tumor volume in liver target lesions. What we do see there is that the group of primary tumors, cholangiocarcinoma and hepatocellular carcinoma, HCC, show a very good response with stable disease over longer periods of time.
This we found very encouraging, and at the same time, the safety profile was supportive of moving forward with the development. As I said, liver biopsy data really showed proof of concept, really demonstrating that the effect was in the tumor cells and not in the liver itself. As we move to the next slide 12, as Jens pointed out, we are looking to combinations. There's good reason to think that combinations will be effective in this type of tumor. There are two different mechanisms of action that are predominant in the HCC space. One is stimulation of the immune system with checkpoint inhibitors, usually anti-PD-1 antibodies.
The other one is blocking tumor blood supply, angiogenesis, either with antibodies or with tyrosine kinase inhibitors. There's a lot of precedent for combining chemotherapy with checkpoint inhibitors, a lot of approved combinations out there in the market. There's a theoretical rationale for this. By inducing tumor cell death, DNA damage, we increase the presentation of tumor antigens and increase the immune response. We also have support from preclinical models demonstrating that we can enhance the effects of anti-PD-1 antibodies with adding of fostrox. For the anti-angiogenesis type of therapeutics, we know also from preclinical models that we can enhance the effect, the antitumor effect.
There's also a theoretical reason why this is likely to work, and that is that increased hypoxia, which is the result of lack of oxygen, when you treat with the tyrosine kinase inhibitors, will increase also the active metabolite of fostrox. To combine, they would probably give a better response. If we move to slide number 13, that summarizes why we think that fostrox is a unique drug in the HCC space. It's based on an innovative combination of a proven technology that is the prodrug technology and a proven mechanism of action, induction of DNA damage and cell death that we know works and is well established in cancer.
The prodrug mechanism that we have used or modified has been used for anti-hepatitis C drugs such as Sovaldi. We also know that that type of mechanism works. By using this prodrug approach, we bypass any resistance mechanisms and increase the potency of the drug. Within the HCC space, this is a unique mechanism of action, making it attractive for various combinations. Then I give over to Jens.
Thank you, Fredrik. We can move to the next slide, please, number 14. So a bit of an overview slide of the sort of the fostrox development from start to where we are now, and you can read from left to right in terms of when we started the journey to 2016 and onwards. I think the focus is more on the right-hand side. As we said, just to kind of give the overview, we are now in the phase I-B, phase II-A, so dose escalation, combination. Then sort of next steps coming up will be sort of selecting the dose, and with regards to. It could theoretically be different combination dose for each of the combinations.
Remember that w e are doing it with two different arms. I'll show that on the next slide so you see a little bit more clear picture. Deciding the dose and then moving into dose expansion is sort of the next step. We will also this year, as you know, we talked about Spain and Korea and U.K. being part of the study. We sort of clearly for the next phase, as we then sort of get sort of combo data and start move towards phase II-B, we clearly want U.S. to be part of it. We are initiating steps this year towards an IND with an aim to establish an IND in 2023 so that U.S. is part of further development as well.
With regards to the combination then in terms of details, what we're running at the moment, if we move to the next slide please. Next slide please, which is slide 15. This is what the ongoing combination study looks like. There are a lot of detail on this slide, but sort of the highlights here are first and foremost, we are running two arms. There is one fostrox with LENVIMA, and there is an arm with fostrox plus KEYTRUDA. Then there will be a decision point for each of them where we decide the appropriate dose. As long as we establish an appropriate dose for each of the arms, both arms will be rolled into the dose expansion.
In the dose expansion where we will be able to primarily see efficacy data, whereas the dose escalation is more about sort of safety and tolerability. As I mentioned, the decision comes to the point in terms of on the back of escalation. Investigator sites split. As I mentioned, there is around 64 or maybe even 55, 45 split EU versus Asia. We're highlighting that again because HCC is a much more common disease in Asian population, driven largely by hepatitis B and hepatitis C. That means it's important to have Asian data as well in this early phase in order to sort of support further development need in the Asian population.
With that, just to sort of summarize things in terms of where we believe the sort of what we believe are the kind of differentiating features of the compound. We can move to the slide 16. As Fredrik outlined nicely, we do believe it's a unique, and it's also a first in class potential treatment for primary liver cancer. There is a significant unmet need with commercial potential. I think as Fredrik outlined, which we feel is quite important to convey is that there is a lot of development going on in HCC, but a lot of that development is either in the checkpoint inhibitor class or in the TKI class. Meaning we don't see fostrox competing with those classes.
We see fostrox complementing with the mechanism of action being sort of the first sort of locally targeted liver-directed chemotherapy, and it makes sense to combine it with either class. Fredrik said the unique mechanism of action that sort of selectively targets cancer in the liver makes it also bypass resistance mechanism. Hopefully increasing the probability of success from a technical viewpoint. Finally, sort of it is a well-established sort of way of treating cancer. As Fredrik said, chemo is the backbone of many cancers, but not here because of the difficulty of getting it to the liver. We believe we have solved that problem to be able to sort of get sort of the chemotherapy in the relevant concentrations into the liver.
With that, let's move 2 slides ahead, and we will talk about just a couple of words on a couple of the other compounds. As we mentioned, we spend most of our time driving the fostrox development forward, but we are also trying to sort of maximizing the value of the other assets through partnering and some of the news on the other assets that we mentioned initially. If you move to slide 18, and then Fredrik can walk through the data that was recently presented.
Okay. Thank you. Of course, I mean, we're really excited about the fostrox progress, and the data that will come during the year. There are other things happening as well that is in our interest. During the quarter one, IGM Biosciences published data at the AACR just a couple of weeks ago, demonstrating new preclinical data regarding birinapant and their DR5 agonist, IGM-8444. The upper panel shows some of these examples of in vivo preclinical tumor models, where birinapant is combined with the IGM-8444. Those of you who have seen this type of tumor growth data from animal models will appreciate that there's a really strong synergy.
You seldom see this kind of preclinical data. I think this has generated a lot of excitement, I mean, in both the sort of science world, but also among investigators. As Jens mentioned, they also in this poster demonstrate that this is really across many different cancer indications. It's not just one. It's broadly applicable to many different cancer types. The other thing that they highlight in this poster is the lower panel, and that's really to show that also resistance develops, of course. It always does with any treatment. Resistance to IGM-8444 can be overcome by adding birinapant.
The combination induces synergistic cell killing in cell lines where you have acquired resistance against the DR5 agonist, which also opens the possibility of achieving better clinical results in the future. IGM has a phase I study ongoing with this combination, and they have publicly announced that they have cleared the first dose cohort. Their study is, as many studies, designed in a dose escalation phase and a dose expansion phase. So far, they have not seen any dose-limiting toxicities in this study. They're currently enrolling more patients in this dose escalation phase in the second dose cohort.
We're really happy that they're moving ahead with that, and we're looking forward to seeing data from that study as well. The other thing I want to highlight is the next slide number 19. As those of you who have followed Medivir for some time, you would know that MIV-711 is a cathepsin K inhibitor designed to treat osteoarthritis. In the phase II-A study that was published a little while ago, the primary endpoint was pain, and this was not reached. However, disease modifying effects were seen and statistically significant. In this group, which is quite patients which are quite heterogeneous, it's known that there are many confounding factors in measuring pain.
One of them is that if you have pain in both knees, you tend to report knee pain in a different way. There's a confounding effect from your other knee, which is not the measured knee for the pain readouts. What we did was a subgroup analysis on these data. We showed that in a subgroup with predominantly unilateral knee pain, just knee pain in one knee, we do see a significant reduction of OA related pain. That's the left graph A in this. We can see statistically significant effects on pain when we analyze this subgroup. Of course, this subgroup analysis does, by its nature, reduce the number of patients quite a lot.
It's also built our confidence to see that also in this group, we do see the disease modifying effects on cartilage and bone. On the far right, the drug does what it should do. It inhibits cathepsin K. That's the readout for a biomarker showing that cathepsin K is inhibited. The two things to take home from this subgroup analysis, it strengthens our hypothesis that the MIV-711 does affect both disease structure, cartilage and bone, but also pain. It points us in the direction of guidance for future clinical trials that could be designed in a more appropriate way. With that, I will hand over to Magnus.
Thank you, Fredrik. Please move to slide number 21. We can see the financial summary for quarter one this year, which I will briefly comment on. All numbers are in millions SEK. The turnover for quarter one amounts to half a million, which relates all to royalty income from Xerclear. Last year was higher, but that include upfront payment for the birinapant outlicense deal that we made last year. Other external expenses are higher compared to last year and relates foremost to the higher clinical costs for the ongoing fostrox combination study. As you can see, the net loss for Q1 is around SEK -33 million, and it's according to plan that we have for the year.
The cash flow from the operating activities for quarter one amounts to minus, roughly SEK -40 million, which is also in line with the plan that we have for the year. With this, the cash position at the end of Q1 is SEK 181 million. According to current plan that we have, the cash will last well into the year 2023. With this, I will hand over back to Jens.
Yeah. In terms of rounding off and go to the slide number 22, please. That's our last slide. Kind of picking up on what Magnus sort of talked about, sort of the financials being in line. The financials are clearly reflecting where we are as a company in terms of where our focus is. As we initiated the phase I-B, phase II-A combination study, sort of at the end of 2021, that's now our focus in terms of driving it. Sort of, spending will from a financial viewpoint, be a focus in 2022, and as we deliver on the priorities for the drug.
In terms of progress that we've seen sort of over the last 12 months, we do see that as we talked about today in terms of accelerating fostrox, presenting mono data last year, initiating the combination sort of towards end of last year, and then this year opening up more centers and opening up patient centers as well. Looking ahead, wanting to the aim of finding the dose for each of the combinations as a first step in terms of initiating the dose expansion. As I mentioned, taking steps towards U.S. steps as well in terms of the initial steps for an IND filing.
Similarly, the partner assets, recent progress across the board with new data and movement for birinapant, and as well as MIV-711. We've also seen new data and movement on the remetinostat that sort of opportunity over the sort of the past period. Moving ahead sort of in the current combination much like the fostrox combination, sort of finding the dose and then making a decision from an expansion cohort's perspective where to go as the next step. A lot has happened over the past year, and we do look forward to sort of a continued sort of event for 2022 and onwards as we see sort of readouts and developments across both fostrox and our partnered assets. With that, we conclude. We can move to the next slide and begin the Q&A session.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.
Hey, guys. Good morning. Good afternoon. Thanks for taking the question. First on fostrox, sorry. You know, as you're looking at the different geographies, does anything give you pause right now with regard to COVID-19, especially as you're looking to have, you know, such a larger population in South Korea as well?
No, not necessarily. I mean, sort of as we talked about sort of Q1, a lot of focus on sort of initiating sort of sites across the regions, including Korea. That plan has progressed as well as planned. There's been no feedback as in sort of challenges to COVID. I mean, clearly could there be some? I mean, you never know. There hasn't been any sort of flags raised on this topic. On the contrary, we've had sort of good initiation meetings and a lot of focus on it with, from the different sites. In some places the sites have been together, in some they've been sort of remote. They've been working virtually, but it's all gone ahead according to plan.
Got it. No, that's helpful. Thank you. Just keeping on the same topic, just wanted to make sure, essentially, obviously it's a small molecule, so it's technically easier but that you're all set regarding manufacturing and any requirements regarding supply chains.
Short answer is yes.
Good. I love simple.
It could be a long topic if we sort of talk about all the other things.
Exactly.
Short answer.
Right.
Yeah.
Of course. Switching over to birinapant, I guess, you know, obviously a lot has to do with IGM and, you know, they're responsible.
Yeah.
You know, any real news flow to point to, but I guess, you know, that we could look for from the data standpoint, but really, you know, on the milestone payment front and anything that we could look for this year and potential sizes.
I mean, of course, as we mentioned before, it's based on development of the study and regulatory and stage milestones. Of course when they will enter into phase II or something else, then it would of course trigger a milestone. We have not disclosed any amount of the milestones. I could say it's a fairly straightforward payout indeed in comparison with other licensed deals. That's what I could say.
Understood. Then lastly, you know, with regard to MIV-711, obviously, you know, you continue to build positively the you know building the data and the drug profile. Obviously just based on the addressable market, and you said this in the past, you know, someone else would look to do this. I guess based on you know what you have in hand already, can you at least provide at the minimum some body language with regard to how you know BD looks around it currently?
Sort of. Let me say this. Let me sort of turn it back to you, Joe, just to kind of elaborate. Sort of, what is your question?
Sure. You would obviously look based on the size of the OA market, you'd obviously look to out-license this asset. What is the status of BD discussions is the simple way to ask it.
Yeah. I see. It becomes a bit more straightforward. I mean, sort of, let me say the following. Clearly, I mean, we are having discussions and we've had discussions with different types of parties. That's sort of. I think we've been really sort of also been open with in terms of when we look at the subgroup data, et cetera. The subgroup analysis we have done together with another third party, not another company, but sort of another CRO company that are heavily invested in the. They've done a lot of work in the OA space. They've flagged sort of that there really is something here that didn't come out in the phase II study. We've had those discussions.
Clearly we are seeing interest and there were some questions around that sort of phase II-A data and wanting to understand that the hypothesis around one knee versus two knee that there is a pain reducing sort of efficacy. Those discussions we've had with others. We are clearly seeing interest, and that's why we did the subgroup analysis, and that's why we also kind of flagged the data here today and we have it on our portfolio overview because there is interest. It's difficult to kind of outline sort of level of or how many. I mean, you don't want to go into that. We highlight the data. We have it on our portfolio overview for the reason that yes, there are interest in the market of finding a way forward because there are parties who know the OA space who believe that there is something here, even though the primary endpoint on the two-way study didn't get.
Understood.
Did that answer the question?
You certainly did.
Okay. Thank you.
Yeah. No, you certainly did. I appreciate the color and, of course, I look forward to a potentially very nice outcome to these discussions. Thanks a lot, guys.
Thank you.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. We have another question from the line of Klas Palin from Erik Penser Bank. Please go ahead.
Thank you. Hello, everybody, thanks for taking my questions even though the previous speaker addressed many of them. Maybe if you would elaborate a little bit further about, I mean, the ongoing MIV-818 study and, is it do you find it easy to find patients and to recruit them or is it a very competitive environment? You mentioned there's a lot of clinical trials ongoing in the space.
Thanks, Klas, for the question. I'll start by saying that we are. I'll encourage you that we're deliberately moving away from the MIV-818 sort of reference, and that w e try to use it as possible.
It's easier.
For the sake of moving towards something, but sort of not that I want to sort of be too picky about it. Relevant question. I think I would say the following. I mean, clearly, there is a lot of activity in this space. I mean, that generates, on the one hand, competition, but it also generates sort of a willingness and an engagement. I think that the fact that it's a lot of activity is both competitive but also sort of supportive in terms of then there are sort of there are a lot of focus on finding patients and there are a lot of focus in the patient community about being part of studies. It kind of helps as well. I think that that's one reflection.
Too, I think the one thing to keep in mind is that HCC is. It's not like lung cancer or breast cancer. It's a smaller disease. With that respect, there will clearly be fewer patients. With regards to patient population, it's a smaller patient population than in other areas. When you talk about the dose escalation cohorts, et cetera, yeah, it might be sort of somewhat more challenging than if you have a solid tumor base to draw from.
That's more of a kind of a general normal sort of fact that it is a relatively small population where that you are drawing from. As I mentioned. Sort of, previously, I mean, sort of the focus has been in Q1 because we opened up the study with a couple of centers in the U.K., and the majority of the centers will be outside of the U.K., Spain and Korea. That's why it's been so important to get those countries up and running sort of as a first step.
Yeah. Great. Is it possible to give any comments if you see the same kind of pace of patients, patient flows in both your arms, or is it more or less easy to recruit patients in any of the arms?
That's a bit too early to say, I would say.
Yeah.
I understand.
Y eah.
Perfect. Great. Thank you so much.
Thank you, Klas.
As there are no further questions, I'll hand it back to the speakers.
Okay. Thank you. Thanks everyone for engaging and listening. If you just move to the final slide, more as a reminder in terms of upcoming activity. I mean, clearly, we look forward to engaging with everyone sort of regularly. We are presenting at the upcoming ABG Sundal Collier Life Science Summit on May 18, and then subsequently in September, presenting at the Pareto Securities' Healthcare Conference and in terms of upcoming activities. With that, thank you all for calling in, wish you all the best and have a great rest of the day.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.