Ladies and gentlemen, welcome to the Medivir Audio Cast Teleconference for Q4 2021. For the first part of this call, all participants will be in listening only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present CEO Jens Lindberg. Please begin.
Thank you. Welcome everyone to Medivir Webcast. We'll do one thing first. We will go through the presentation today. There might be a bit of a lag from when we ask the slides to move forward until you see them move forward. If you have the opportunity, you can also go into medivir.com under Investors and Presentations, and there you can see today's presentations in PDF format. I'll stop and then pause for 60 seconds. Those of you who have the opportunity to download on medivir.com, I would encourage you to do so. We'll start in 60 seconds. We'll do a bit of a pause. We can, with that, we can also move forward to the next slide as we are pausing. You can go to slide two in the meantime. Okay.
That was probably slightly shorter than 60 seconds, but we'll go anyway. As you can see, there are three of us in the room here today. Sort of apart from myself, and I will introduce myself a bit further. We have our CFO, Magnus Christensen, and also our Chief Scientific Officer, Fredrik Öberg. Being new in the role of CEO, I will take the lion's share of the presentation today, and I will also sort of use it as a way to introduce myself. As you can see, my name is Jens. I have my background primarily in the world of pharmaceuticals.
I spent around 25 years at AstraZeneca in various roles, both here in the Nordics, but also in global roles with the focus on commercial side of things, including both late-stage development, preparing for launch and execution of launch. In the last 10 years, I've spent in the world of oncology. Before we go, I'd like to take the opportunity actually on this slide to give my gratitude to Magnus, who's taken on the role of Interim CEO for the past sort of 6+ months, while very nicely handling the role of CFO as well. He has also been supported very nicely by Fredrik in all the external interactions. A big gratitude from my point of view on this one. With that said, we'll move forward.
You can move to slide four, please, immediately. On slide three, there is an important notice and a lot of details, and you can, as you download the presentation, you can read through that on your own. The agenda today, of course, we'll go through the highlights since last quarterly report. Then the meatier section will be where I will sort of provide some reflections from my side, both on why am I here and why I took on the role of CEO at Medivir. We'll also sort of kill two birds with one stone as I also go through our lead asset MIV-818 or as it's nowadays called, Fostroxacitabine bralpamide.
We'll have a financial highlight toward the end, and then we'll also open up for Q&A, where both sort of Fredrik and Magnus will be active as well. As we move forward, we can move two slides ahead to slide 6, please. Looking back since last quarterly report, first and most importantly, we see continued progress for our lead asset. As we have communicated, we have initiated the important Phase Ib/IIa combination study with either KEYTRUDA or LENVIMA. We have also published sort of data recently at the EASL Congress, sort of showing sort of supporting proof of concept through our biomarker data.
Thirdly, as I mentioned earlier, we have also received our INN for MIV-818, which is then, as I mentioned, Fostroxacitabine bralpamide , which is a long name, but it's also a really good name. We'll come back to it, why it's such a good name. Looking outside of our lead asset, which is also important in Q4, as you know from our previous announcement on collaboration with IGM Biosciences, they have initiated the Phase I study of birinapant in combination with IGM-8444, which was a great piece of news. From a personnel perspective, apart from me joining on January 24, we've initiated a recruitment for a permanent CMO, which is well underway.
That's also an important next step in terms of sort of strengthening the team here at Medivir. We can with that move forward, and we can jump two slides again. We can jump to slide 8. As I mentioned, well, I'm joining Medivir from a background in the world of pharmaceuticals. When I was approached about this opportunity, I had discussions with the board. There were basically three things that stood out to me in terms of making this opportunity attractive. It is an exciting time to join Medivir. The company is in a very exciting transformation Phase . Also looking at the most important asset, the lead asset of MIV-818 , also attracted my attention.
I will spend a bit more time going through why I think MIV-818 is such an attractive asset and what made me look at it a bit closer. We'll spend a bit more time on it today. The other two elements are that the team here at Medivir is a very experienced, very capable and very engaged team. As you go through a transformation journey like this, that needs to be in place, which it is. Then thirdly, for me, having been away from the world of sort of core world of pharmaceuticals, coming home to pharmaceuticals, and then also being able to do so to oncology, is like coming home. That was a benefit as well.
Let's go to the next slide, please. As I mentioned, what sort of joining Medivir at this stage, sort of in this time of the company's transformation, it is something that looks quite exciting. The other part that's also quite important is that while there may be, there's always a past for a company and there's a history. When we look at Medivir today, the thing that stand out to me is that the strategy for the company, the kind of overall vision and priorities are very clear. We are a company. We're here to improve life for cancer patients through transformative drugs. That's what we are all about. We do that in sort of three core steps.
One, first and foremost, currently there is full focus on accelerating our lead asset, MIV-818, sort of as quickly as we possibly can towards sort of a market entry and as I will go through in a little bit in second-line sort of Hepatocellular carcinoma . Two, we are also focused on maximizing the value of our assets for partnering and out licensing, and that will continue. Thirdly, sort of as we embark on this journey, as I mentioned before, we also need to make sure that sort of we make Medivir an inspiring place to work, and that we establish a sort of an entrepreneurial sort of company culture, where people want to be. Those three elements are super clear.
The board has pointed out the direction, and the team here is very committed to driving this transformation. That's also an element that attracted me to the company. If we go to the next slide, and we start looking at kind of the priority of the lead asset, the element that we focus on the most. Let's take a little bit of a step back before we dive into MIV-818. When I look at sort of when you look at pharmaceutical drug development, I would argue there are three critical areas where you need to assess anything against. If you wanna look at sort of is a drug or a compound, sort of how excited should you be about it, you should assess it against three areas.
One, start from left to right, is there an unmet need? If there is an unmet need, there's usually a commercial potential. You look at those two elements to see if that is there. If it's there, then you can look at step two. That is, there might be a big unmet need, but do you or do we have anything to bring to the table? Are we unique? Are we differentiated, or are we just the same as everyone else and we're 3rd in line? That's the second step to assess against. Then thirdly, pharmaceutical drug development sort of has risk. We all know that.
What we wanna do is we want to minimize that risk as much as we possibly can, which can be done in different ways. That's an element we look at as well. I looked at MIV-818 through this lens, and I'll go through sort of my thought process in terms of sort of what made me excited about it. With that, we can go to slide 11, please. We start on the first element of the commercial potential unmet need. This is perhaps the clearest aspect. When we look at Hepatocellular carcinoma , we know it's a very serious cancer. It's one of the highest sort of mortality rates.
There is a high unmet need, and it's relatively or quite underserved from a treatment perspective. I think from an unmet need perspective, it's difficult to argue with that. The other thing I will sort of just mention here, because I will come back to it in a bit, is that on the right-hand side, I've underlined one topic, and that is sort of as we look ahead and we see that there's a clear anticipation of the market to grow. It will grow primarily on the back of combinations, not unlike what we see in many other tumor areas. It's worthwhile kind of mentioning here as well, and we'll keep that in mind and we'll come back to it.
I think that from the first category, unmet need, commercial potential, I think sort of don't need to dive into it further. Relatively clear. Two, maybe the most important element is then are we unique? Are we differentiated? Are we or are we sort of the same as everyone else? If we move to the next slide, in slide 12, and we'll go through a couple of slides to look at the element of sort of uniqueness and differentiation. One, if we look at the pipeline of sort of therapies in this area, today it consists of a variety of combination trials with two, broadly speaking, mechanisms of action.
On the left-hand side, there is a lot of checkpoint inhibitors being evaluated and explored in HCC and in other areas, many times in combinations with a broad range of kinase inhibitors. Where on the left-hand side, there is a stimulation of the immune system, and on the right-hand side, from a mechanistic point of view, blocking blood supply to the tumor. A lot of opportunities or a lot of compounds, but all broadly categorized in two groups being reasonably the same in sort of in either one of the group. Whereas I would argue that MIV-818 is distinctly different and sort of stands out versus the rest. We can move to the next slide, please. Slide 13.
I apologize for the slide being maybe a bit, sort of compact or a lot of information, but I think it's important to outline the different elements. On the one hand, it does have a very differentiated mechanism of action, and a mechanism I would argue deserves much more sort of enthusiasm than it sometimes gets. It's designed to have a targeted tumor selective action in the liver, but not outside the liver. i.e., it inhibits the DNA replication, induces cell death in the tumor tissue, but not in normal tissue, which is the design and which is also what you see on the right-hand side, sort of when we explore whether it has efficacy in the tumor tissue versus sort of in normal tissue.
This is what I would argue exactly what you want. Sort of when you are treating patients with a very sort of potent drug, the more you can exhibit the mechanism of action in the tumor and the less you can sort of induce it outside the tumor, the better. Again, making MIV-818 quite different, being the potentially first sort of orally liver-directed drug in this area. The other element, if we move to the next slide 14, to kind of round off the differentiation elements, being then uniquely different, it also makes it a natural sort of potential or attractive partner for combinations, having a different mechanism of action. 'Cause many times you want to combine across mechanisms of action.
Apart from being different, in addition to that, there's also a potential for sort of scientifically very attractive combinations in kind of supporting each other. On the left-hand side, sort of we know that MIV-818 induces DNA damage and tumor cell death, which then potentially leads to increased tumor antigen presentation and a better immune response, i.e., helping the checkpoint inhibitors do their job even better. This is something we know from the other tumor types, for example, in lung cancer, et cetera, where it's been shown that sort of cytotoxic drugs plus checkpoint inhibitors does have great clinical efficacy. That's one rationale for combination. On the other side, on the right-hand side, as we mentioned, the kinase inhibitors, they do block the blood supply to the tumor.
If you block the blood supply to the tumor, that also sort of lowers the level of oxygen. If you lower the level of oxygen, that leads to increased levels of the MIV-818 active metabolite. Again, sort of it has an opportunity for a very attractive combination. The word synergistic is a strong word, but clearly we're hoping that sort of and we think that there's a rationale for hoping that one plus one is a bit more than two, when we combine sort of MIV-818 with either a checkpoint inhibitor or a TKI. With that, I would argue that it is not the same as the rest. It is quite different from the rest of the compounds in development for HCC.
Finally then from a risk perspective, if we go to the next slide, please. A slightly colorful slide. Now I'll come back to why I think that the INN name for Fostroxacitabine bralpamide , even though it's sometimes difficult to pronounce. It is a really good name because it actually sort of very clearly outlines sort of what the drug is about and what the benefits of the mechanism of action is. If I start on the right-hand side with the bralpamide element in orange, this type of prodrug, which sort of bralpamide indicates, has already been sort of tried and tested in the liver, i.e., through the anti-HCV drugs. We know that sort of from a prodrug in the liver perspective, this mechanism of action has been proven successfully.
that we know, which should hopefully sort of lower the risk now that we talk about the risk element. In the middle, as I mentioned, I mean, this mechanism of action of sort of increasing cell death, et cetera, so that we know from many other drugs in the past, it's been well proven in cancer therapy. It's nothing new, again, sort of lowering the risk. Then, on the left-hand side, because of the prodrug concept, there is no need for phosphorylation, and therefore, that increases the potency of fostroxacitabine. And, hopefully, that should potentially lead to also sort of a potentially lower dose, or we don't need to go as high from a dosing perspective as we otherwise might need to do.
The name outlines sort of three key elements. Three key elements we would argue sort of speaks to sort of a lowering of the technical risk. That's the third element. If I try to sum this up, and if we go to the next slide 16, and then look from left to right, again. From a potential unmet need perspective, as I mentioned, there is a significant unmet need. I don't think anyone is arguing that in HCC. Our argument is that our lead asset is complementing. We're not sort of replacing or competing with existing therapies.
In the middle from a uniqueness differentiation point of view, our mechanism of action is different, selectively targeting cancer in the liver, making it a very sort of attractive candidate for combinations with other mechanisms of action. Then on the right-hand side, a proven well-established sort of mechanism of action, being targeted in the liver, and should also be a lowering of the technical risk. We think that looking at the three critical areas, I would argue that it ticks all the boxes very nicely and is a promising drug candidate that perhaps or I would argue deserves a bit more love than it sometimes gets.
With that, I'll just sort of round off with a couple of slides, and we go to the next one just to sort of look ahead in what we are doing at the moment to give it a sort of a bit more further context. This is what you're seeing on this slide is a very simple schematic of what the treatment algorithm looks like in HCC. When we look at systemic therapy, then I want to direct you to the column of advanced stage patients. What we know and what we see today is that most of that development, sort of current development is happening in first line. The latest development, the important development was the IMbrave150 study with atezolizumab.
We see that most of the studies are targeting this patient population, whereas there is still a big need in that second line space. One, many patients will not tolerate first line, or two, they won't respond to it. Today, most options are standard of care today is monotherapy, TKI, and second-line patients would very likely benefit from attractive combinations as well. What we're doing as a first step from a market entry is going where the others aren't to a large degree, i.e., combination therapy in 2nd line. The other element to mention here is that most drugs are also approved only for patients classified as Child-Pugh A. We are at least aiming to include both Child-Pugh A and B patients in our studies because there's also an unmet need for those patients.
Finally, from a study perspective, next slide. This is something we've communicated before, and you know, but sort of our initial focus being then in this sort of second-line advanced HCC space. This is a study that is now ongoing, our Phase Ib/IIa study, sorry, where we are doing dose escalation part with the combinations of MIV-818 KEYTRUDA, and then also in the combination of MIV-818 and LENVIMA. Sort of taking advantage of the sort of unique and complementary sort of mechanisms of actions. The other thing to mention here, this is a true second-line, sort of, patient population.
They have either been sort of intolerant or advanced from a first line sort of therapy, and they are inoperable. It also means something to highlight, which you can see on the right-hand side, is that patients that are on the atezo/bev and are progressing, they are also sort of included in the study. Sort of the new standard of care therapy in first line, those patients, when they progress, they will also be included in the study, sort of looking ahead to the future. We look forward to going into much more details on the study program and other things sort of as we sort of present in upcoming sort of conferences and presentations.
With that, I will sort of stop on MIV-818 , and then we can move two slides ahead and just do a quick summary from a clinical program perspective. Now I've spent most of the time today talking about our lead asset and why that attracted me to come to Medivir and what made me excited. We do have other assets and other programs, as you know from before. Just because I spoke more about MIV-818 today doesn't mean that we have deprioritized the others. As I mentioned, the birinapant study, which we out-licensed the compound we out-licensed to IGM, started first Phase I study initiated in Q4, and they are now driving the development.
Of course, we are speaking with them and collaborating with them on a regular basis, but they are driving the development. As we have communicated previously for both remetinostat and MIV-711, we continue to work and explore opportunities with potential collaborators in terms of moving both those programs forward in a partnered fashion as best as possible. With that, I will stop from my end and hand over to Magnus from a financial highlights perspective.
Thank you, Jens. Please move to slide number 22. We can see the kind of summary for quarter four and for the financial year 2021. All numbers are in SEK million. As you can see, the turnover for quarter four amounts to SEK 14 million, which is higher than last year and relates mainly to the milestone income related to the IGM, that they have started a combination study with IGM-8444 with birinapant. For the financial year, the turnover amounts to almost SEK 25 million, which is higher and relates mainly to the outlicensing deal with birinapant to IGM Biosciences. Other expenses were higher than last year and relates mainly to the higher cost for the clinical studies and as well milestone payments regarding birinapant.
Personnel costs are more or less in line with last year for the quarter and for the financial year, lower and relates to less FTEs compared to last year. The operating loss for quarter four is SEK -24 million, which is higher than last year. For the financial year, the operating loss is SEK -62 million, which is also higher than last year and reflects mainly the positive effect that we had last year when we renegotiated the leases in the year 2020, which is shown as other operating income. As well, we have higher cost for clinical studies this year, as I mentioned. The cash flow from the operating activities for Q4 is around SEK -5 million compared to SEK -1 million.
For the financial year, it amounts to SEK -49 million compared to SEK -58 million last year. Most importantly, the cash position at the end of Q4 is SEK 221 million, which is enough to complete the ongoing clinical activities. According to our current plans, we will have cash well into the year 2023. With that, I will hand over back to Jens.
We can just round off by going to slide 23, which is just a repetition of where we started from a highlights point of view. Short version is continued very nice progress for our lead asset moving into Phase I b/IIa. We continue to drive the development of the overall portfolio performance. Great news with the birinapant study start in quarter four. From a people perspective, we continue to strengthen the team. Hopefully me joining is strengthening the team.
We are underway with recruiting the CMO, and with the CMO in place as well, we will be in a really good shape from having a strong team in place driving the development of both MIV-818 forward and also the rest of the portfolio. I have tried to be very objective, but also to outline my sort of the enthusiasm and share the rationale for my enthusiasm both around the company and the lead asset. Just wanted to take a little bit of time outlining that in a bit more detail.
With that, we will conclude sort of the presentation section, and we will open up for questions, and we can move to slide 24, please.
Our first question comes from Richard Ramanius with Redeye. Please go ahead.
Hello, thanks for your presentation. I actually got in a bit late, so perhaps I missed some part, but I have five questions. I'll start with the three concerning the timeline and the clinical trials. So how many patients do you intend to enroll in each part with MIV-818 in the combination trial? How many in the dose escalation and how many in the expansion cohort?
Thank you, Richard, for that question. It's clear that the dose escalation Phase is very difficult to predict. But to give you a range, each cohort is three patients. And we anticipate maybe three cohorts. But as I said, it will all depend on the tolerability and the signs of efficacy that we see in the dose escalation. I should also point out that the dose escalation Phase might be different for the different combinations since we might observe differences in how high dose tolerability we see. So that's the part that's going to be most variable and unpredictable that we cannot really guide you right now.
For the expansion Phase , then, that will probably go quicker in terms of recruitment rates because we don't have these cohorts. We cannot today say exactly when that will start. As we said before, we will, when we get a bit more into the dose escalation Phase , be able to guide you better when that will happen.
Would you, I read on clinical trials that description, it says 30 patients, I think, for the dose for the expansion part, for that, so would that be 15 in each combination?
That would be in total. As we do the dose escalation, part of it will of course be to look at tolerability for the two arms, and a decision will probably be made then to continue with one, both, or both of those arms. That would of course determine the size of each cohort.
I guess one of the large costs would be to purchase LENVIMA and KEYTRUDA. Would it be reasonable to assume a cost of around, say SEK 1 million or SEK 1.5 million per patient or all in costs for the trial? Can you comment on that?
No, not really. I mean, we don't disclose the cost for the drugs used in the trial. Sorry, can't help you there.
Okay, thanks. When do you expect efficacy readout from birinapant and like an objective response rate, for example? Could that be in 2023?
Magnus here. Thank you for the question. It's a bit early to say as they are in a dose escalation Phase as well. They are really in the driving seat of this clinical studies. We will, I think, wait and see. As Jan said, they are running full speed ahead and we will see when they announce the next step in that study.
Okay, thanks. I have two financial questions. You said the cash position should last into 2023, but looking at historical expenses and cash flow, if we assume similar levels as say 2021, the cash position should last into even into 2024, especially if we assume some additional milestones and royalties from Xerclear. Do you think costs will increase substantially in 2023 compared to previous years?
Okay. Magnus here. Thank you again, Richard Ramanius for the question. This is obviously according to the current plans that we have, and it might be difficult to compare the different studies. The one before was monotherapy and was only MIV-818 substance. Now we have the combination, and as you said, we have to purchase LENVIMA and KEYTRUDA as well. That's a bit more expensive. I have not included any potential milestones from our partner deals. The only thing I have included is the royalty for Xerclear. If we get anything more from birinapant or from other partner deals, that will be an upside to the running cash run rates.
Last financial question. Without going into detail, I saw you have had a lot of additional from revenues. You have two posts, one turnover and the second other income, a lot of which was reimbursement received from previous clinical studies, which was quite a major part of revenues in 2020 and large part in 2021. Do you expect more of this going forward, or could you comment on this other revenue?
Yeah, thank you for the question again. Yes, you're correct. That's a reimbursement for previous clinical studies. The easy answer to that, I do not expect that in the future. That's not for the MIV-818 study. It's from earlier studies that we made. The large amount other revenue last year was from the renegotiated leases that we made for our office in Huddinge. That's the main part last year. For this year in quarter one, yes, we received some reimbursement from a previous clinical study which was not related to MIV-818.
Okay. Thank you. That's. You've answered all my questions. Thank you.
Thank you.
Thank you, Richard.
Our next question comes from Joe Pantginis with H.C. Wainwright. Please go ahead.
Good morning. This is Matt on for Joe. Thanks for taking our questions. Can you hear me okay?
Yes, we can.
Okay, great. So just a couple from us. The first one is, I wonder if you could provide any updated timelines on when we might see initial or preliminary data from the MIV-818 combo study?
As we spoke about just now, the dose escalation Phase is difficult to predict. I mean, our prediction is that we will have some data from that later this year. I guess as soon as we have data, we will communicate that. I can't give you a
Just a quick
A more precise date.
Yeah. No worries. A follow-up to that. I know you've mentioned that you provide more trial details, a little bit more color at a later date. I was wondering if you could maybe provide any more comments on the expectations and how you're measuring success, in this trial going forward.
The first part will of course be very much focused on tolerability. We need to set the right dose for both combinations, and those doses might be different. We're hoping also to see signs of efficacy. The expansion Phase is designed to be able to better assess efficacy. It's an open trial, so it's not a controlled trial. In terms I think you're referring to what kind of objective response rates do we need to see to be happy. I think the second line within this space now is new. What we can rely on is second line previous studies done in second line. Of course, we can compare them to LENVIMA as monotherapy or KEYTRUDA as monotherapy.
Without giving you exact numbers, I can say that we would like to see higher response rates than those single agents. Although they were tested post sorafenib, not in the exact space that we're in now.
Right. Great. Thank you very much. Appreciate the additional color. Thanks for taking our questions again.
As a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. At this time, we have no further questions. I will now hand back to the speakers for a final remark.
Thank you. If we still have the slides up, we can just actually move one slide forward. Just to sort of mention, sort of as we alluded to earlier, we look forward to going into a bit more details, sort of further outlining sort of more details with regards to program, with regards to the sort of data that we've shown so far, and also how we see the market developing and some of the questions that Joe alluded to here to share in a bit more detail at upcoming conferences, and we look to be active in the next sort of six months.
The first one, and not the only one, but the first sort of opportunity will be, and we'll be participating at the Danske Bank Healthcare Day on February 24, i.e., next week. We'll go into some more details on that. With that said, just sort of short roundup of thank you everyone for listening in, and we look forward to future interactions, and we look forward to sharing sort of future progress on both the company transformation journey and also the progress of our lead asset MIV-818. With that, thank you everyone for dialing in today.