Earnings Call: Q4 2020

Feb 26, 2021

Thank you, operator, and warm welcome to our Q4 and full year 2020 webcast. On Slide 3, you will find our presentation on our homepage. And on Slide 3, I do recommend Everyone to read the disclaimer, which will be, as I said, on our homepage as well for those of you who are interested in the details. Slide 5, please. This is today's outline, where we will briefly touch upon our main projects and then to be rounded off with our Q4 full year numbers. Slide 6, please. Medevir has been around as a company since 1988 and started off as a virology focused company back in the day. The company is listed on NASDAQ here in Stockholm, and our proprietary asset currently is MIV-eight eighteen, which is a liver directed nucleotides prodrug. We are currently in Phase Ib clinical development and aim to initiate a combination trial later this year. 818 has received orphan drug designation both in EU and the U. S. We have made a couple of achievements in the last months. We managed to outlicense brinapant to IGM Biosciences, where we continue to expect initiation of a Phase I trial later this year, but have also out licensed one of our preclinical project US B7 to ubiquitgen, which we announced just a couple of weeks ago. In parallel, we have completed a successful financing of the company, specifically to drive the next phase of our 828 molecule. In the right issue, a new specialist health specialist investor, Health Invest, became a new major shareholder. We do also have 2 programs for partnering, that is remetinostat and 711. Next slide, please. On Slide 7, you will find an overview of our clinical projects. We have a focused clinical program called MIV-eight eighteen targeting liver cancer and currently in a Phase Ib monotherapy clinical trial. We do have a partner asset, Brinepant, which will enter Phase 1 clinical development in IDM's range later this year. In parallel, there is an investigator sponsored trial currently running at National Cancer Institute with the indication, hidden neck cancer. We do also have 2 clinical programs, we're partnering in ALK licensing, remetinostat and 711, which we will come back to later. Slide 9, please. Just a recap of the rights issue, one of our recent events here in the company. The preference and rights issue was completed successfully in February, and it was oversubscribed by more than 93%. With that, Medeville received around SEK 170,000,000 before transaction costs. Subsequently, the Board of Directors decided to exercise the overallotment option of SEK 25,000,000 to the specialty investor, Health Invest. And supported and we do also have an EDM upcoming March 11, which is supported by the Medevir shareholders to vote on a directed new share issue to Link of approximately SEK 28,000,000. In total, Medevir will receive approximately SEK 223,000,000 before transaction costs, And we will then have an ownership base with 3 strong institutions and specialist investors: LINK, which Aim for a 10% shareholding, Nordea and Healthi Invest. Thank you all for supporting The rights issue and warm welcome for Healthi Invest as a new shareholder in the company and also warm welcome to all other Shareholders will participate in the rights issue and made that a successful transaction earlier this month. Slide 11, please. In mid January, we signed a licensing agreement with IGM Biosciences. To recap that, IGM is a clinical stage biotechnology company focused on creating and developing engineered IGM antibodies. IGM received global development rights for Bunapant, a clinical stage mathematic that binds to and degrades IAPs, which then leads to cell death in tumor cells. Puneppant is initially intended to be combined with IGM's antibody known as 8,444. This antibody targets DR5, this receptor 5, And it's being developed in different tumor indications. And what we see is a Potential Phase I trial then later this year with BRINAPAN in combination with 8,444 in solid tumors. Next slide, please. Medivir, we received an upfront payment of US1 $1,000,000 upon signing of the agreement, which has already occurred. An additional $1,500,000 will be received when brinapant is included by IGM in a clinical Phase I study. Should brinapant be successfully developed and approved, Medeville is entitled to receive development, regulatory and sales milestone payments up to a total of approximately USD 350,000,000 On top of that, Meduir is entitled to receive tiered royalties from the mid single digits up to mid teens on net sales. Currently, The tech transfer is ongoing with full speed. We should also mention that a prerequisite for this agreement was the announcement we made in December, the revenue share agreement with TetraLogic. Next slide, please. Slide 13. Just a reminder, this is a picture that was presented by IGN Biosciences at our web conference in connection to the licensing deal. As we can see, IGM 8,444 plus brinopant shows synergistic impact on inhibiting tumor volume growth in preclinical in vivo models. Slide 15, please. Jumping then to our own proprietary compound, which we are running clinical trials with. VIV-eight eighteen is a liver directed Nucleotide is an oral prodrug. Once observed from the GI tract, 818 is transported to the liver. The prodrug is taken up by liver cells and converted into troxocytobine triphosphate, which is the active moiety of this molecule. Fructacitabine triphosphate is incorporated into DNA and causes double strand sorry, DNA breaks and cell death. Next slide, please. We did, in our Phase 1a trial sees selective effect of signals in liver cancer. There is a clear sign of Cell death, measured as DNA damage, was observed in liver biopsies from tumor tissues in 818 treated patients. The tumor selective effect is an early proof of concept of the intended liver directed effect in patients. As you can see, as depicted in the pictures, brown coloring is evidence of DNA damage, which is not seen then in normal liver cells and enhanced post MIIB818 treatment. Next slide, please. So currently, we are reaching the end of the Phase Ib monotherapy, which we hope to announce when that is completed. In parallel, we have started to work on and preparing the initiation of a combination therapy in the second half of twenty twenty one. Next slide, please. Just to illustrate what we aim for in the hepatocellular carcinoma space, We all know liver cancer is the 3rd most common cause of cancer related death in the world, and HCC is the most common form of liver cancer. As we can see, in 2020, the ATC market was approximately $1,000,000,000 and it will grow rapidly to approximately $3,000,000,000 The growth comes from the combination therapies that will drive this. Previously, only monotherapy drugs was approved for the treatment of HCC. Next slide, please. Slide 20. And we do also have 2 clinical programs for partnering in our blood bank, Those are remetinostat and MEVE-seven eleven. For remetinostat, we expect the publication of the final BCC data, which is now being prepared. As we all know, there was an updated data points on clinicaltrials.gov in late January, where the overall response rate from the announcement that we made in previous years was changed from 64% to almost 70%, which is seen to be very positive. But for the final details, we will have to wait for the publication. With remotinostat, there was also an investigator initiated Phase 2 trial in squamous cell carcinoma that was conducted by the same group at Stanford University. The study was unfortunately terminated due to the delays from COVID-nineteen, which resulted in difficulties to recruit patients, in the end, resulting in drug shortage. We expect data from the 4 patients studied in this trial to be published during this year. We look forward to seeing those results. MIIF 711. We all know we have Conducted a Phase II study showing positive effects in bone and cartilage in joints in osteoarthritis patients. This was a 6 month treatment where the primary endpoint was not reached. We are continuing to evaluating 711 project. With that, I hand over to Magnus to go through our financial numbers. Thank you, Jim Matt. Please see Slide 22, where you can see the financial summary through quarter 4 and for the financial year 2020, and all numbers are 1,000,000 clear. As you can see, the turnover for quarter 4 amounts to 1.5, which is more or less in line with last year and relates to royalty income from Zeklier. And as you can see, accumulated for 2020, the turnover amounts to around SEK 40,000,000, which is higher than last year and relates to both higher royalty income as well as the business deal that we made in Q1 2020. During the year, we have been very cost conscious. For example, we have renegotiated the office agreement that we shown in the quarter 3 report. As well in quarter 4, we have now exit the rent agreement in UK, which means that the liability on the balance sheet is substantially lower from now and onwards. And as well, for example, we have renegotiated some 0 agreements during the year. And as a result of that, We have received refund from previous clinical studies in this quarter, which is shown as other operating income. And the effect of cost conscious is resulting in lower other stone expenses as well as lower cost of personnel as we have fewer FTE compared to last year. As you can see, the loss for the quarter 4 is around SEK 11,000,000 And for the financial year, it's around CHF 43,000,000, which is substantially lower than last year for 2019. And the cash flow from the operating activities for the financial year 2020 amount to minus EUR58 compared to minus EUR 148,000,000 for the financial year 2019. And the cash position At the end of 2020, it's SEK 70,000,000 and with the proceeds from the right issue that Ilham has mentioned, The cash is more than enough to complete the ongoing clinical activity. And according to our current plans, We will have cash well into the year 2023. Then I hand over to you, Guillaume, again. Thank you, Magnus. Slide 23, please. Just to sum up, We have a proprietary clinical asset, 818, a liver directed nucleotide prodrug. Currently, we have started planning for a combination trial with the aim to be initiated in the second half twenty twenty. In recent months, we did also achieve several milestones, of which highlighted here on this slide. We signed a business development deal, an exclusive global licensing agreement with IGN Biosciences. We did complete the Successful rights issue and a directed rights issue to a new specialist health care investor, HealthInvest. And we do look forward to complete the directed issue to Link, which is also a specialist health care investor here in the Nordics. And we do have 2 clinical programs for partnering out licensing, remetinostat and 711. We continue to work with those 2 assets. With that, next slide, and I would like to open up for Q and A. Thank Our first question comes from Manuela Brancini from H. C. Wainwright. Please go ahead. Good afternoon, guys. This is Emanuela on for the OpenGenius. Thank you for taking my questions. So a couple of questions about MIB-eight eighteen. I was wondering, can you remind us when we will see The dose escalation data. And also, can you give us maybe a little bit more Color on the thought process around the selection of a combo asset for MIB 818. Good morning, and thank you for very two interesting questions. When it comes to the Completion and reaching the maximum tolerable dose, I think we have guided end of this quarter, and we hope to achieve that. It all depends with the new COVID-nineteen surge, of course, and recruitment of the final patient into that trial. So we'll come back to that. And regarding the combination treatment, I think we have a delicate work to do in house because the positive thing with 818 is that it can be combined with all currently approved treatments for ATC. And those are a handful treatments, both antibodies, small molecules, tyrosine kinase inhibitors, etcetera. So that is the final work that's ongoing at the company right now. And we will also convene An external scientific advisory board in a couple of weeks, where we will get their inputs on what the combined MIV-eight eighteen, where we see hopefully, where we believe we will see the best synergy in combination with another treatment and also to discuss different dimensions of patient population within the HCC space. And we have not landed that yet. What we will communicate when we have landed, what kind of combination and design of treatments we will run-in combination with 818. So we will come back to that. Okay. Thank you. That's helpful. And I guess my second question is about Birina And what did you learn about like from your past Birinaband experience? And What makes the new combination different from the past? Yes. I think we tried to illustrate that On the call that we had in connection to the licensing agreement with IGM Biosciences, I think what we have learned that it's brinapant as a single agent. It hits the targets, the intrinsic apoptotic targets, But as a monotherapy, it doesn't really drive the apoptotic mechanism in tumor cells, except for some indications or some instances in some patients. We have seen other companies working with MacDiMETICS, where they have shown a great success in combination therapies. So all in all, to sum up, our experience is that You need to push the cell with some kind of extrinsic pathway and in combination with Brinavant, which then inhibits intrinsic In inhibitory apoptosis inhibitory pathway, you get basically a total synergy, at least what we can see in preclinical models. So I think that combination made us and we are quite excited about the IgM Biosciences and the death receptor 5 antibody combination, where they will push the extrinsic apoptotic pathway. At the same time, Brinavant will then augment that signaling, so to say, by inhibiting breaks within the cell. So I think that's the scientific experience, and that's the evidence we see out there how one can use mathematics. And that's why we are so excited about the upcoming trials that IGM will run for Brinepant. Sure. Thank you. And you didn't disclose any indication for the new combination. But Would the Phase I be a basket study? Should we expect a basket study? Thank you. Very good question. Why it hasn't been disclosed? What indication? The indication that we have disclosed is solid tumors, and that's disclosed by IGM. And why solid tumors? Because the combination, if it really works, It can go very broadly. And as you have alluded to in your questions, most Probably what we have learned from IGM will be a type of solid tumor basket trial patients entering that trial to guide the further development of the combination. In the end, when you look at the mechanism And the science behind it and the preclinical models, we believe it can go very broad among many and different type of solid tumors. Got it. Thank you. Congratulations on all the progress and Thank you for taking my questions. Thank you. Our next question comes from Rene Roetjes from Kempen. Please go ahead. Thank you very much for taking my questions. It's Rene on for Ingrid. First question is about your Cash guidance. So you indicated 2023 cash flow into the year 2023. Does that include all of the proceeds from both the overall open option and the direct share issue as well? Or is that still excluded from that run rate guidance? Thank you for the question. It's included with from Health and Wealth, but it's not included the proceeds from Link as that has not decided yet. So if that will be approved by the Annual Meeting as well, yes, and we'll have even more cash into year 2020. Okay. All right. And then maybe some extra words that you can share about the status of your partnering discussions Remittingerstadt and 711, that will be helpful as well. Rene, thank you for the question. I think we have to disappoint you on answering on that. I mean, Partnering discussions is difficult. You never know when they Go home, so to say, it's like a dance. You need 2 parties, sometimes 3 parties to come up with a final agreement or final collaboration or a licensing agreement. So I think It's for us very difficult to guide when and how those will happen. But obviously, we are working on them, but Nothing that we can guide upon. Okay. Thank you very much. Thank you. There appears to be no further questions, so I'll hand back to the speakers. Apologies. There appears to be another question registered from Hans Englund, who is a Private Investor. Please go ahead. Hello, guys. Just one question in relation to MIV181. Oh, 188, 818, of course. You are sort of targeting the liver, but does Anything of the troxycitabine move over from the liver to the kidney afterwards? Have you looked at that anything? Thank you, Hans, for the question. That's a very specific So I don't know if I can answer that correctly. What we have followed is Not only the signals that we show with the cell death that appear with the DNA strand breaks in the liver, we have followed the molecule in the peripheral system that is in the blood. But right now, I cannot recall If I have heard anything, seen anything directly from the kidney observations, I do not expect that since I haven't heard anything. But let me check that up internally and come back to you. Yes, that's great. Because it could be an opportunity actually. Yes, obviously, it is if it enters into the kidney, absolutely. But also the opportunities, I mean, right now, we have been when we mentioned liver cancer in the trials that we have, We have hepatocellular carcinoma. We have cholangiocarcinoma patients. We have colorectal cancer patients who have metastasis in the liver, etcetera. So if this drug gets approved in the market, the potential indications Patient population that it can be used with is very broad. We know the colorectal cancer market is a $9,000,000,000 market. Obviously, not all of them metastasize or are late stage patients, but a significant amount of those patients are late stage patients. The same will be finding the right combination for those different indications. And we have, so to say, A positive dilemma internally because 818 with this differentiated mode of action and differentiated As an oral compound directing the liver, we have positive issues is that we can go down so many avenues. And we need to decide, and that's why we have invited people and will invite people to set up a scientific External Scientific Advisory Board in a month or 2 to really get their feedback to understand which avenues should we go down first. And that's why we aim to initiate a combination trial in the second half of this year and where we have started to work on that. So that's our, so to say, positive dilemma internally right now. Yes, great. Thank you. Thank you. There appears to be no further questions. So I will hand back to the speakers for any other remarks. Operator, thank you so much for hosting this web conference and teleconference, and thank you all for very interesting and insightful questions. And thank you all to all the new shareholders and existing shareholders who have helped and participated in the latest financing round, and warm welcome especially to the new shareholders. With that, I wish you all a pleasant weekend. Thank you so much.