Earnings Call: Q3 2020

Nov 10, 2020

Thank you, operator, and warm welcome for everyone to our quarterly update. Slide 3, please. And as a reminder, you will find our presentation on our homepage, and I do recommend everyone to read the disclaimer on Slide 3. The agenda for today will be a brief overview of the company and then to be rounded up with our Q3 numbers presented by Magnus. Slide 4, please. As you all know, many of you who have observed Medevir, the company has been around since 1988 and started off as a virology focused company. Today, the company is focused on oncology and clinical development, and the company is listed on NASDAQ here in Stockholm. Our proprietary asset with 818 is a liver directed nucleotide prodrug, and we are currently in a Phase Ib clinical development. And we have received orphan drug designation both in the EU and the U. S. For this compound. We have in the last year or so downsized the company and built a clinical development focused company. And we are now in total 9 FT feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet Es and have, through our belief, an efficient organization to execute on our clinical trial. We also have several programs for partnering, and these are remetinostat, Brinavant and MIB-seven eleven. Slide 5, please. This slide shows an overview of our focused clinical program and our programs for partnering. As mentioned, we are fully focused on developing 818 for liver cancer. Currently, the project is in Phase Ib clinical trials and in the Part A of that trial where we dosed the patient in a 3 plus 3 cohort as a monotherapy. Subsequent to that trial, a Part B of the Phase Ib will be initiated next year sometime in combination therapy. We do also have multiple programs for partnering, remetinostat, a topical HSAC inhibitor. We have brinopant, a SMAC mimetic and 711, ekitepsin UK inhibitor. Slide 6 and then Slide 7, please. So our proprietary project, 818, is a liver directed nucleotide. It is an oral prodrug, and once observed from the GI tract, 818 is transported to the liver. And during the first pass metabolism, the prodrug is taken up by liver cancer cells and converted into trotocitabine triphosphate. Trotocitabine triphosphate is incorporated into the DNA and causes double strand DNA breaks and cell death. Slide 8, please. We have preclinical evidence of 818 liver targeting features. In the preclinical model, where we measured levels of toltocytobin in the liver versus toltocytobin in plasma, we could show that 818 displays 100 fold higher liver targeting capability in comparison to intravenous trotocytobin. Slide 9, please. To show the efficacy of 818, we have, amongst others, conducted preclinical xenograft models where we could show a dose dependent inhibition of tumor growth. You see that on our left hand sided graph where rounded white circles are the placebo. You have then a low dose and the blue circles, which corresponds to high dose 818. In a similar fashion, on our right hand side, we see a comparison of 818 with the broadly used multi kinase inhibitors, sorafenib and lenvatinib in HCT Hepatocellular carcinoma cell line derived from patients that 818 is very efficacious in inhibiting these cancer cells. Slide 10 and 11, please. When it comes to clinical data, we have conducted a dose escalation Phase 1 study in 9 patients, where we see signs of selective effect of 818 in tumor cells. This is depicted in the center picture and the picture on the right hand side. As you can see, evidence of DNA damage, that is the brown coloring on the right hand side picture in tumor cells, but not in the center cells where we see the normal liver tissue cells. Slide 12, please. To depict the time line for our ongoing clinical trials, we are right now in the midst of the Phase Ib, Part A, where we dose 818 as a monotherapy. This is an inter patient dose escalation cohort study where we have 3 patients for each cohort. We expect data from this trial in the Q1 2021. But bear in mind, we do also see a surge of the COVID-nineteen pandemic as we speak. If this will have any impact on the timeline for the Phase 4b monotherapy part, it is too early to know. Subsequent to that, we will initiate next year a Phase 1b Part B, as we call it, that is an add on of 818 on top of standard of care or existing therapies. Slide 13 and then 14, please. As mentioned in the presentation, we have multiple programs for partnering. We have the rematinostat, a topical HDAC inhibitor, where the company sponsored trials were ran until Phase 2. This compound is ready to go into Phase 3 if we find the right partner. It has also been conducted a Phase 2 investigator sponsored trial in basal cell carcinoma, where data top line data has previously been published. We do expect a full publication of this data in the near term future. Brinavant is a smac mimetic. And as you are aware of, the company did run a Phase II trial in combination with KEYTRUDA. End of last year, we did announce that the trial was futile and it has now been closed down completely. For this compound, we are looking if there are any opportunities for partnering as a combination trial in solid tumors. MIP 711, a cathep synK inhibitor for the indication of osteoarthritis. This compound has also been through company sponsored Phase 2 trials, and we are reviewing how to take this compound in a potential next Phase II or Phase III trial. But this has to be done with a partner. With that, I'll hand over to Magnus to run through our Q3 numbers. Thank you, Jim. Matt, please go to Slide 15 and then 16, please. Here, you can see the financial summary for the quarter 3 and accumulated to quarter 1 to quarter 3. As you can see in the period, the turnover is SEK 1,100,000, which relates to royalty from CIRCLEAR, a bit lower than last year. However, if you look at the cumulative figures, you can see that it's higher and it's due to higher royalty as well as the preclinical assets that were made from business deals in quarter 1. And then you see in other operating income, you can see the effect of our renegotiated lease agreement for our office space in Stockholm. I could say the effect is more an accounting effect for this quarter, but more importantly, it means that our rent cost from January 2021 will be substantially lower than we have today. That's very positive cash effect for next year. If you look at other external expenses, it's much lower than last year and it relates to general cost control well as we only focused this year now MIR-eight eighteen clinical study. Last year, we had 2 clinical studies ongoing. Hashtag cost in line with last quarter last year, but if you look at the cumulative figures, you can see it's well below last year. The next financial item is revaluation of our liquid funds. As you can see, we had some in quarter 1, due to the pandemic, COVID-nineteen, we had some setback there. But now it's turning around, so we have positive figure accumulated there as well. And if you look at the cash flow for quarter 3, it amounts to $17,000,000 which is a large improvement from last year of $32,000,000 and accumulated $57,000,000 minus compared to $125,000,000 So we can say the burn rate is much lower now than it used to be. End of the quarter, we were SEK 9, end of September, and the cash position at the end of September were SEK 83,000,000. And the cash is sufficient to complete ongoing clinical activities. And now we have summarized 2 takeaways from this slide is that, in general, good cost control, the cost much lower and the new office agreement, which will mean that our cash bond will be much lower next year. Then I hand over to you, Jerna, again. Thank you, Magnus. Slide 17, please. As a summary, as we mentioned during the presentation, we are focusing on our asset 818, a liver directed nucleotide prodrug. This is a proprietary asset and currently in a Phase Ib clinical development as a monotherapy. We do expect data from this monotherapy part in Q1 next year. Subsequent to that, we will start a combination trial with 1 of the standard of care treatments within this segment. As a reminder, we do see a surge from the COVID-nineteen pandemic. This may, of course, impact our timelines regarding the Part A of the Phase Ib clinical trial. I think we have now the right size and efficient organization to conduct a focused execution on the 8/18 clinical development program. And we do also have other programs for partnering, as we mentioned, remetinostat, Plunapant and 711. And with that, I'll hand over to your operator to take on questions. Thank you. Our first question comes from the line of Joe Pantginis from H. C. Wainwright. Please go ahead. Hi, good morning and good morning, Yumaz, and good luck with your new position. Wanted to ask, I guess, one more macro question and then a little more diving into the detail. So first, obviously, a lot of efforts have been done to refocus the company and also including cost control. So that's great. So I guess from a macro standpoint, wanted to get a little bit of your vision for the company at this point since there is currently such a good amount of focus? Yes. On a high level and Joao, thanks for the question. On a high level, I think we have started when it comes to 818 and are focused on clinical development. As you know, this was a virology company before and now focused on oncology. So we have started a strategic work when it comes to 818 to understand the position or potential position in the future hepatocellular carcinoma market, but also potentially as a drug for cholangio intrahepatic cholangiocarcinoma. We hope to finalize that strategic work in Q1 next year. As you are aware, several oncology indications are very dynamic, so with especially hepatocellular carcinoma at the moment. So we need to understand where we find 818. The position of it due to its specific mode of action and differentiated mode of action with current approved drugs, but also in comparison to drugs that we see in the clinical development programs out there. Got it. Thanks. And then the more, I guess, more specific question is, it was very nice to hear that we'll be seeing a peer reviewed publication regarding the remetinostat data. So that'll help continue to boost the visibility for that asset. So with that said, I guess I would ask a question that I commonly ask here is if you can at this point, can you describe the tenor or the level of the conversations that are happening on the business development front because that would be a very exciting transaction for the company? Absolutely. And thank you for the question again, Joe. I mean, I have since I came into the company, it has just been 8 weeks. I have started to look into our programs for partnering, amongst others. As you can imagine, a lot of things ongoing. But for me to understand why these haven't been out like as of now. And I believe I think what I see is that there might be some opportunities there. However, it's very premature for me to comment on the likelihood of achieving partnerships at this moment. I hope if you give me some more months, I might be able to comment that in a better way. Of course, I always characterize that question as have to ask it. But best of luck in your new position and look forward to catching up soon. Thank you. Absolutely. Thank you, Joe. And the next question comes from the line of Ulrik Ratner from Carnegie. Please go ahead. Actually a follow-up on the business development side. As you mentioned, you have 3 products that you have the potential for entering partnerships. But so what would differ now from what the situation has been before? In my opinion, it rather seems like the IP of majority of these assets is running out of time. So thus the devalue of these assets should deteriorate over time. And were there to be any additional data that enables you to license these assets, and now the yield is relatively new to the company. So how would this differ from what we have heard before? Thank you for the question, Ole. As I mentioned, I'm looking into these assets. As you mentioned, IP is also a ticking always a ticking clock. And as time passes, it's a headwind, as you alluded to. So I mean, we have to see where and where the science will take us. I think we will have to take another look, a fresh look on these all of these three assets to see if there is something to be done here or not. But as I mentioned, it is premature for me to comment on the likelihood of achieving something at this moment. But I'll do my utmost to see if we can carve out or take out something and create value for MediView shareholders. Sure. But would you ever consider to just out license these assets without any milestone payments related to them, just considering creating any type of value based on future royalty of sales? I would say that everything is on the table right now. It all depends if we can create some value, if we believe we can create some value for shareholders. If it comes to out licensing without any milestones, that will all depend on what type of partnership one could create. Is it a credible partner who can run these clinical trials or not? I mean, I think we need to add that into our equation if we see that would create any value for the shareholders. Okay, great. Two more questions. Obviously, it's very important to look at the selectivity of NIVE-eight eighteen, especially giving the sort of profile of troxitabine and given that it's a prodrug. What type of conclusions can you derive based on the data that you're planning to present in Q1 next year on the selectivity of the drug It's a dose escalation study. Yes, it is a dose escalation study. And I think we'll have some more data on the selectivity. We will probably conduct some more biopsies to get more evidence on that. But really, to understand the efficacy of the drug, I think we'll see that in our Phase Ib, Part B, where we do a combination trial with the compound with any drug, so to say. And that drug that we're going to do combined with, we haven't really set up with that. That's why we have our strategic work here because what we believe going forward in the hepatocellular carcinoma space, specifically but also probably in the cholangiocarcinoma space, is that doublet therapies will dominate in the future. And it's a question about where we find 818 would suit, which partner should we go with at the combination treatment, for example. But there is also some speculations out there that there might be also be triplet kind of therapies in the future when it comes to the hepatocellular carcinoma space. So it is a bit premature there as well since we haven't seen so much clinical data or evidence yet. But I think the best trial to answer your question there will be after the second part of the Phase Ib when we start combining nivate 1. I think looking at our preclinical data, looking at that we have done on top of the multi kinase inhibitors, for example, we clearly see that 818 adds efficacy on top of those. But that's preclinical data. We need to show that in the clinic as well. So just a few follow ups and obviously a financing question on top of that. As you mentioned that you enhanced the activity or the efficiency of the standard of care PKIs, but they tend to be rather toxic. To what extent do you believe that you can actually have a more manageable toxicity in combination with these PKIs? Well, that was one example. I mean, these are the preclinical trials or experiments that we have done. What we will partner with or combine with going forward with this compound is up to be answered. And that's why we have a strategic work that will we are conducting internally and hope to finish that in Q1 next year, understand the path forward. As we know so far is that doublet therapies will dominate in the hepatocellular carcinoma space. And one of the questions in the Phase Ib combination trial is to understand the toxicity level, how high can we dose 818 or how high can it dose, as an example, the multi kinase inhibitors and still have tolerable profile of this combination. But there are many more combinations that can be done within this area as the multi kinase inhibitors are not the only drugs approved in hepatocellular carcinoma right now. Okay, fine. It was highlighted in your call that you essentially said that you're financed for your ongoing clinical activities, but does that also include the Part B of the Phase I study as well? Or is that supposed to be additional financing needed for lead to be completed? Magnus here. Thank you for your question. What I can say is that the cash we have today is sufficient to complete the ongoing. And the ongoing is the part Phase 1b, Part A study that we're doing now. Okay. So it's a fair conclusion to say that additional fine, I think, you're needing to complete Partb? Yes. That's something for the future to be decided, yes. Okay, great. So last question before I'll hand back over to the queue is just somewhat more of a sort of broader question to you, Yilmaz, and how in the short amount of time and just your thoughts on how you would like to position Medivir differently from what Uli and the former management team positioned the company? And just your sort of broad picture of where you believe Medivir is going and in what direction? Yes. I mean, basically, what we're doing is we continue the work that Uli initiated, but try to sharpen and make the organization more effective in the clinical development space basically and start off with 818 and let's see if we can succeed with 818 by positioning it, finding right combination partner and deliver on the clinical trial. And then we'll see the efficacy of those trials and if we can take 8.8 all the way to the market. I mean, it will be data dependent, of course. But having built a clinical organization, we have we don't speak to that anymore in our quarterly report, but I think Ole has mentioned it previously, we have some other compounds in clinical preclinical stage, which needs some more work to take into the clinic, especially from our Prodrug platform for different indications than 818. So my focus right now is to get the clinical development up and running, come into the efficacy phase of the 818. And then if we have the mandate from shareholders and we have the right organization, we will try to bring in more property assets into the clinic from our own pipeline. Okay, that's great. Thank you very much and good luck to you, Elmas. Thank you. Our next question comes from the line of Joseph Hedden from Rx Securities. Please go ahead. Thanks and good afternoon. Most of my questions have actually been answered. If I could just ask one regarding biopsy. So is it your intention that every patient receives a post treatment biopsy, is there any kind of time course there, I. E. They're starting biopsy at different points throughout treatment? And then is there any potential to compare to existing data of patients who have received other treatments for liver cancer when it comes to biopsies? Or is it worth some kind of natural history study there? Thanks very much. Thank you, Josef. I think I heard the first part of your question, but please repeat the second part of the question. The second part was just related to patients receiving, for instance, TKI. Is it well characterized liver biopsy tissue there so that perhaps you can have a handle on selectivity of your drug versus what you might see in the biopsy tissue of other patients? Okay. When it comes to your second part, I think I have to come back to you. I don't really know the answer at the moment. Regarding the first part, yes, I think we are taking biopsies from this patient, but I cannot answer right now how many biopsies in exact what time points that we take those biopsies. I don't expect that since being a very invasive type of procedure right now, I do not think that you get a pretreatment and a post treatment biopsy, most likely just a post treatment biopsy, just to see the differentiation between healthy liver cancer cells and tumor liver cancer cells, so to say. And as there are no further questions, I'll hand it back to the speakers for closing remarks. Thank you, operator, and thank you, everyone, for the great questions. With that, I would like to conclude our Q3 telephone conference, and stay safe out there.