M&A Announcement

Mar 1, 2021

Slides

Thank you, and good afternoon, everyone. I'm very pleased to hear that we are over 100 participants on this webcast. So really thank you for that. So this morning, we announced the acquisition of global development and commercialization rights for CanthriXel, A clinical stage ovarian cancer program building, therefore, critical mass in our oncology pipeline. Over the course of the next hour or so, I'm looking forward to sharing with you the strategic rationale for this move And now excitement about it as we believe it marks an important milestone in oasimia transformation. And as usual, we will be hosting a Q and A session at the end of this presentation. Slide 2, but I will not ask you to read Slide 3. So today, I am joined by Doctor. Reinhard Koenig, With our acting Chief Scientific Officer, who has been working for quite some time for Oasmia. And since this is The first time that you hear Reinhard, I would kindly ask him to present himself in a few words. Reinhard, the floor is yours. Yes. Thank you very much, Francois. Hi, everybody. So I'm Reinhard Konek, and I'm a medical doctor by training and a pharma and life sciences professional. I have about More than 25 years of experience in the United States and Europe in the field. Over my career, I've been developing products from early stages to Approval International in several indications, and I've held positions with companies in the U. S. And Europe in various capacities, Mainly in product development, regulatory and general management. Back to you, Francois. Thank you, Reinhard. So let's move to the Slide number 4. So today, as I said earlier, so we took really a bold step forward By announcing the acquisition of global rights of Canvixil, our drug candidate from Asia Therapeutics Limited, an Australian biotechnology company. This licensing in has been very carefully considered. And really, it builds on our proven development and regulatory expertise in ovarian cancer. As you all know that We have been able to register successfully APILIA in Europe. Furthermore, we plan to evaluate the Attention of Kymflixyl for synergy with Apellia and with our technology platform, XR17 Down the Road 18, which is also, so in some other words, a double shot at once. We are really particularly excited But this licensing agreement, as it is a part of a wider strategy to transform rosacea into a sustainable Specialty Pharma Company, this is the first of several Envision product compound acquisitions Aiming at beefing up our pipeline, this is really the first step of our, what I would call, our string of pearls strategy. And having said that, I will pass the floor now on to Reinhard on Slide 5, please. Okay. So in the next few slides, I will be discussing some of the scientific background And we'll paint a picture of its So on Slide 5, let's talk about Contrexel, a broader overview. Pantryxa is a 1st in class, 3rd generation, bensapyran targeting CD44 positive cancers, Initially ovarian cancer. And as you know already, erosimyr already has considerable experience in ovarian cancer Through the development of our lead program, Papyriane. Contrexel has shown Promising results in preclinical development, and those are activity against ovarian cancer stem cells As a key driver of chemotherapy resistance, it's been shown that Contrexel monotherapy inhibits Tumor growth in a model of aggressive ovarian cancer and it has been shown that Cantrexel and standard chemotherapy Combine effectively against chemoresistant cancers in vitro and in animal experiments. Most recently, top line results were published from a clinical study, a Phase I clinical study. And the highlights of the study were intraperitoneal IP application. The study objectives by and large were So the maximum tolerated dose was determined. And A partial response and a complete response were observed. Generally, the Compound was well tolerated. But since this was only a top line disclosure, We are waiting for a peer reviewed publication that will discuss the entirety of the results. Next slide please. Let's talk a little bit about the Market case for ovarian cancer. As we all know, it's a major medical unmet need with a high rate of Recurrence. And from a business perspective, this is a market that is Growing globally, about 295,000 women are diagnosed or were diagnosed with ovarian cancer in 20 Which makes it the 8th most common cancer in women. Many of those women, Probably more than 70% have a relapse within 3 years from diagnosis. And the market size, According to the measures that we looked at are considerable, about $6,700,000,000 Now how does Contrexel work? In order to discuss that, I want to give you a little bit of background on ovarian cancer. Broad strokes, of course, no scientific minutiae. But overall, the cancer stem cells play a key role in tumor recurrence and resistance. Cancer stem cells are able to self renew, differentiate and initiate and maintain tumor growth. Very often, cancer stem cells are drug resistant, leading to tumor recurrence and metastasis. And in the indication, the standard of care is still platinum and taxane based therapies With a significant occurrence of drug resistance after first use, So that makes it a very difficult disease to treat among others. So, Cantrexel has shown Potent anticanceractivity, sorry, let's go to Slide number 8, please. Slide number 8 talks about the preclinical results that Contrexel has Achieved so far. Contrexel has shown anticancer activity in some of those experiments. And it has been shown that Contrexel destroys cancer stem cells That under monotherapy, it inhibits tumor growth and aggressive ovarian cancer model, That there is an effect on the basis of Contrexel with a combination of cisplatinum In vitro and in vivo. And there has been an anticancer activity demonstrated across a panel of ovarian cancer cell lines Across different histotypes. The IND enabling profile It was favorable for the compound. Next slide. How does Contrexel work? It may be, and this is still an emerging area of Inquiry that Contrexel exhibits a multi Factorio mechanism of action in combating those cancer cells. One of them is the mitotic arrest That directly inhibits tubulin polymerization. Another effect is the Activation of pro death apoptosis pathways and other effects The inhibition of poor survival pathways. Those targets We'll need to be fully validated going forward. Next slide. In this slide, I'm going to briefly discuss the Phase 1 safety NPK Okay. Results, I don't want this to be too technical. So I just want to state that the maximum tolerated dose in this Clinical study was established as 5 milligrams per kilogram And that adverse events were assessed, of course, in this study. And there was a Incidents of abdominal pain, fatigue, vomiting and nausea. All of those data, please keep in mind, are very early there Phase I study and cannot be extrapolated at this point. Overall, the pharmacokinetic profile is Predictable and there is no accumulation of the compound. Next page, next slide. So in the Phase 1 study That I referred to earlier, it was also reported as a top line report late last year. Contrexel showed positive efficacy and safety signals. Again, very early signals, not final results. It was shown that the that out of 16 patients that were evaluable for efficacy, One patient showed a complete response and 2 patients showed a partial response. Generally, the compound was well tolerated With the mentioned GI toxicities, abdominal pain, vomiting, nausea. So this is An overview over the data of Contrexel, both clinical and preclinical. With that said, I'm passing on back to you, Francois. Thank you, Reinhard. Thank you for this explanation. So let's move to Slide 12 now. With the addition of CabSeq sale to our product portfolio, we are building Our critical mass in our oncology pipeline. You all know that APIDEA has been approved in Europe for adult patients for Relapsed platinum sensitive epithelial ovarian cancer, but also primary peritoneal cancer and a fallopian tube cancer. You also know that a commercialization deal has been now announced with INCEPTRA from Elevar, And commercialization will start this year. You also know that We Elieba is making significant progress with regard to the registration in the U. S. Now we are about to enter the clinics with besetaxel miscella in metastatic prostate cancer. And obviously, we continue to work hard on Adding new candidates to this pipeline through in licensing, initially focused on oncology. And the transaction today is certainly the first of a planned series of string of pearls, acquisitions and licensing in deals. So let's move at Slide 13. So I'm very happy to report that we have secured a Submarable agreement terms for this transaction, the net form consideration of US4 $1,000,000 Development and milestones up to $42,000,000 for ovarian. And we have not disclosed the royalties. They are sales based, as you would expect, in line with the standards in the biotech industry. The next steps that you're going to see over the next few weeks months, Well, first of all, I'll find out, in Unit 2, there will be a peer reviewed publication of the full Phase I results, not only the top line but the full Phase I. And then we are planning to initiate a Phase II next year. And why? Because we, 1st of all, need to secure an international drug supply this year for Convexil. We will be building up an advisory board. We have already started to talk to Most of the leaders in the intraperitoneal fields also in the U. S. And we Obviously, we need to talk to the regulatory agencies in Europe but also in the U. S. In order to Disclose and validate our clinical plan, which is an essential part of our strategy. So let's move to Slide number 14. So to sum up, we're really excited about Camtrexil. It's An exciting opportunity with the potential platform synergies, 1st client tubulin binding small molecule and with a In cytotoxicity, again, CD44 plus ovarian cancer, but not only ovarian cancer, Potentially bladder and colorectal cancer as well. This drug has the potential to improve the outcome in relapsed Ovarian cancer. I now show the safety profile in IPUs as well as a favorable PK profile as well. That work has got an orphan drug designation With the U. S. FDA, that is always a plus. From a patent standpoint, we are in a safe position with the Composition of the matter patent protection up to 2,035. And again, there is other opportunities with this compound in other indications than bladder. So and as I said earlier, there will be Even an evaluation of the potential synergy with Epidio, let's see what we can and I mean I meant here IV formulation And also with our technology platform, XR1718. So on the Slide 15. So I'd like to say that clearly, This transaction demonstrates our ability to deliver this is the first step of a string of For acquisition and licensing deals, we have a strong cash position of SEK287 million That was disclosed by your end. Many of you have been made familiar with our 4 pillar strategy for growth. And with this transaction, we've made progress against 2 of those 4 pillars, the Pillar 2 in rights and Pia de For as well. And thank you for listening to this presentation. I hope you Share with us our excitement regarding to this compound, and I would like to open up to Q and A at this time in time. Back to you, operator. Thank Our first question comes from the line of Jon Preetha at Edison Investment Research. Please go ahead. Your line is open. Hi there, Francois, and thank you. So I have a couple of questions, so probably ask them 1 at time. So my first question really is, so why was Camtrix still the best fit for OASMEA? And are there any current limitations that you believe the XL17 platform is best suited to address? Yes. So All is best suited to address. Okay. I mean, first of all, we have, We believe a decent level of exposure in ovarian cancer. So that's one point. And the other thing is that, of course, for A company of our size, Caesia was happy to give us this compound because it will be a very important product For osmia, so that's a rationale. Now in terms of limitations, I'm not sure that I really understood your question, sorry. If you could repeat it, please? Yes. So I was just wondering if there are any kind of current limitations that you believe the XL17 platform is best suited to address In terms of using 11 combination together? Not really. And well, first of all, of course, the Development program of Constrictil will be in IP, intraperitoneal. And at the same In time, we will be testing, evaluating in vitro through the IV formulation what we could do with our platform. But I don't I mean, we need to work on this. Okay. That's great. So we can with the Phase 2 set to So in 2022, you can assume that will be for the unmodified, Cantrexel. And I was just wondering if you could Provide any details on really the clinical protocol in terms of maybe number of patients or whether there'll be a combination arm in the Phase II trial set to start. Okay. Reinhard, you would like to address this one, please? Yes. Thank you for the question. It's Too early to make any kind of comments or commitments on design and locations. We'll evaluate that in the next Few months and then we'll get back to the market on this. Okay. That's great. And just a final question, if I may. So this is obviously a very exciting announcement. And how many assets do you think will allow OSME to reach this critical mass? And When do you expect these additional announcements to come? Right. That's a good question, a challenging one. Well, in principle, you know that we are not a one trick pony. This is the first comment, I would say. And what we've done today demonstrates that even more. Now to your question on how many said we need to have in order to have a decent portfolio, well, I would refer to ultimately companies like Genmab, so You have the answer. So we will need to acquire a couple of more broaden our scope of activities, broaden the scope of the oncology candidates and mechanism of action, so in order to be to have this critical mass that is needed to survive in the biotech world. That's great. Thank you very much for taking my questions. You're welcome, John. Thank you. Our next question comes from the line of Joseph Hedden of Arek Securities, please go ahead. Your line is open. Good afternoon. Thanks for taking my questions. Congrats on this deal. Certainly, it makes a lot of sense with your expertise and ovarian cancer and complementarity with the PEA. Just Some questions on the Phase I study. I appreciate that there's not a lot more that you can say about data that's been recorded. But in terms of this publication, could you confirm whether The full 14 patients are going to be available for efficacy in that publication. Rainer, please. That's a very good question. The Overall data set will be submitted for the manuscript, of course. I can't make a firm commitment whether or not 14% or 16% will be valuable, but obviously we'll do our best. Okay. Thanks. And then staying on the Phase I study, We saw the progression free survival after the dose escalation and it suggested encouraging when compared to the 2 Historic chemotherapy rate for that particular last line patient group. Can you say whether or not you had a chance to see the PFS data before you signed this deal? Appreciate it's not public, but did you see the PSA? I'd rather not Comment on that. So the answer is no. I'm referring you to the published data on this study. There is an abstract That is available on the web and there is some other information in previous press releases. But at this point, we don't want to discuss those specifics. Okay, sure. And just on the Phase 2, you announced that you expect that in 2022. So And I imply a fair time period until we get to the start of the study. What means is there anything that needs to be done, any additional work you envisage before you get to that trial? Is that why there's a little bit of a delay? In general, there is technology transfer from our partner that takes time. And in addition to that, we want to initiate an authority consultation process And want to get prepared for manufacturing related issues. So that's going to take A little bit of time that we will need in order to initiate a clinical study. Okay. Okay. That makes sense. And given the mechanism of action, Conceptually, it seems to me that this drug is best suited as a first line therapy or at least as a in an early line of therapy. So I mean, does that sit is that in line with your views? Is the Phase II a first line trial or not At least not in such a refractory population as this, where presumably there's already so much resistance that The drug doesn't have as good a chance to work as it would maybe in first line. Right. This is a good observation. This is obviously a very difficult indication With many limitations from a study design enrollment perspective. So what we are going to do is we will consult with our Your opinion leaders and we will find the best population and protocol to run a Phase II study. So we're not there yet, but that's an ongoing process. Okay, great. And then I realize I've taken a few questions here, but just on the financial side of the deal, I appreciate you're not going to disclose very specific details about milestones and royalties. Just wanted to get an idea of the split between development And commercial milestones and whether there is a milestone tied to the Phase 2 start. Yes. Well, as you would expect, we will not be Closing any details of the agreement that is industry standards from a royalty standpoint, and I cannot say more about the milestones. Okay. Okay. Fair enough. Thank you, Francois. Thanks very much. You're welcome. Thank you. Thank you. We currently have one further question in the queue. And our next question comes from the line of Klas Pannin of Ericsson Bank. I just wonder if you could elaborate a little bit about Possible cost that will be added to Osmia in 2021 for Cantrexil? Also perhaps, I mean, I guess you will not disclose that much about the milestone package, but Maybe you can say if there will also be a milestone payment when starting the Phase IIb the Phase II trial. Okay. So We disclosed by year end close to €300,000,000 in cash and SEK. And you know that we have reduced our burn rate significantly. So we have plenty of financial vessels to execute on our plan with Camtek Steel. And I cannot comment any further. With regard To the milestoneroyalties, unfortunately, I cannot disclose anything on that, and which is not probably surprising to you, Klas. Sorry for that. No. Okay. And also, I mean, there's a lot of preclinical work done with this compound. I just wonder if the previous owners have perhaps been looking into combination with PARP inhibitors? Rainer, please. Yes. I can't comment on what previous owners did, but this is certainly an area where we would be interested In getting input from our KOLs and see what the possibilities are. So the answer is yes, it's interesting and we'll evaluate it. And then my last question is about I mean, You also mentioned that you want to evaluate an IV solution with your platform. Is that regulated in the deal That you have now signed with Cartier? Well, not absolutely no. This is not. This is, let's So an added benefit for us, for the compound, for OASMEA, for our investors to evaluate further Any in vitro work with regard to the IV formulation and potentially whether we could with our technology platform. But this is totally independent from the deal with CAGR. Okay, great. Thank you very much. You're welcome, Clive. Thank you. We've had a couple more questions Next is from the line of Tom Ilsen, a Private Investor. Please go ahead. Your line is open. Yes, hello. Thank you. Could you just clarify that this is in fact the XR17, a new API that you have referred prior? Yes. We have initiated Some work with the technology platform in an upgrade manner, okay? So we and I don't want to be Necessarily specific, we will be using our technology platform and potentially the upgraded one In order to perform the necessary individual work with and fixing. So I think this is the answer to your I understand. But you have previously said that you will announce a new API in extra 13, and I just wanted to Clarify that this is in fact that combination. Well, This does serve that purpose as well. Whether this is a new API, I cannot comment on that. We are still working on Another API as well as we speak. Okay. Thank you for that. From what I understand, This is not chemo and it is not intravenous. And it seems from what I could read, there wasn't any toxic issues. So What could be the advantages of combining it with XR17 because it's not the typical advantages that you would have From Ophelia or other chemo combination? I think there are 2 things. First of all, the Phase 1 have been performed intraperitoneal. And the Phase II program will be intraperitoneal. Now this is At the same time, we will be evaluating whether the an IV formulation could be exploitable and whether At the same time, whether we could potentially improve it with our technology platform. So this is 2 different things. Okay. Thank you. And you also mentioned that you will be looking into combination therapy and not just a monotherapy. So if you would combine it successfully with Ophelia and it would be addressing first line rather than relapse, When that is all finished and done, how would that affect and synchronize with your current Deal with Elevar, considering it would include Ophelia and Chemtrigthold. Okay. Rainer, do you like to address this one? Yes. So great questions. But the last question specifically is obviously Speculative and looking far out. So we are driven by research and we will take the next steps And we will find out if there is any synergy with our therapeutic regimens and then we'll explore them. We haven't really thought about potential business related transactions or interactions based on the Opelior situation. It is more a scientific possibility that needs to be validated. So at this point, we can't really comment on that in more specific fashion. I understand. I just figured it would be a game changer for Apeelab If we also move the PEA into first line and not just relapse, though, I just figured it would have something to do with the elevated as well. Yes. And that's a great thought. Yes. Okay. Thank you. And my last question is considering the report you had recently, you You disclosed that there is €30,000,000 worth of inventory and finished cost of goods. What are those €30,000,000 worth of inventory? Well, I cannot comment specifically on that. So this is part of our relationship with Edvard, and we are addressing that as well. Okay. Thank you. You're welcome. Thank you. And we've got one further question in the queue at Time that's from the line of Joseph Hedden at ARC Securities. Please go ahead. Your line is open. Thanks for taking my follow-up. It was just on preclinical data in terms of Now that you've licensed this product, how quickly do you think you could do some preclinical work testing the synergy, the potential synergy with Ophelia? Would it be possible to see pre sampled base from such studies in over the next year? That is a great question and it's one of our priorities. So we are assessing the timing and we'll then plan appropriate Preclinical work and get back to the market on this. Okay. Thanks. And congrats again. Thank you. Thank you. Okay. There seems to be no further questions at this time, so I'll hand back to our speakers for the closing comments. Thank you very much for listening to this presentation and asking those questions. I Hope you are sharing with us our excitement with regard to this transaction, the first step in our string of pearls strategy. And we will continue to work hard behind the scene to evaluate all the opportunities such as today's news. And we not all of them will get to the market, will get to the finish line, let's say. So but I appreciate your patience, your commitment to Osmia. And I'm sure that we will have another opportunity to speak pretty soon. Thank you very much to you all.