Good afternoon, everyone. Thanks for coming to my presentation on Medicenna. Glad you're here. Medicenna, we are a publicly listed company on the TSX main board, also on the OTCQX. The symbol is MDNA or MDNA. Just to let you know that I will be making forward-looking statements, so I encourage you to look at our regulatory filings when you have a chance. What is Medicenna and what do we do? We are focused on developing life-changing immunotherapies for patients with late-stage diseases, particularly cancer that I'll talk about today, and other different immune-related diseases as well. From a historical perspective, what we are really focused on is a class of molecules we call cytokines. Cytokines are immune messengers that we all have. What we are trying to do is develop these cytokines that we have naturally, but generate what we call Superkines.
The reason we do that is that we want our immune system to be best able to communicate with the immune cells and generate the best possible immune cells to fight cancer. That's the objective. To do that, what we did was in 2016, we licensed this entire platform of Superkines from scientists that had developed these Superkines back at Stanford University. We have exclusive worldwide rights to these very unique Superkines from Stanford. We IPO'd on the main board of TSX in 2017. We have since then had a clinical collaboration with Merck, where Merck has agreed to provide us with a drug called KEYTRUDA. It's the world's biggest selling drug. That drug has been combined with our drug to see how these two work together.
When we presented some early data last year at a conference, we had one of the world's largest oncology investors out of Boston, ARA Capital, do a PIPE investment of $20 million. What we are planning to do this year is, before the end of this year, provide you with an update on what we have done with one of these Superkines. This is MDNA11. We'll talk about that. Just to let you know that we have de-risked a considerable amount of our development by virtue of two things. First, that we have an agreement with the FDA on a phase III design for our brain cancer drug. I'll talk to you about that. We have more than 100 patient data from patients that have received our drug with other types of tumors. There is a lot of data that we have that we are leveraging.
With Medicenna, we have an outstanding team of experts that have been working in the biotech space, in the immunology space. In fact, we have one of the world's number one brain cancer specialists, John Sampson, as an advisor, been working with us for the past 10 years. Paolo Ascierto, he's the number one expert in Europe with skin cancer. He's been working with us for the past five years. We have others who have decades of experience in running biotech companies, including myself. I've been at it for about 30 years. One of my companies had a thousand-bagger. I'm really looking forward to really taking this particular program and getting some very substantial returns for our shareholders and, of course, myself. Where are we with our pipeline? We have got a really exciting set of drugs that are in development.
What we have right at the bottom is the drug for brain cancer. This is a drug that is now ready for phase III clinical trials. We're looking to partner this particular program. I'll talk to you about the opportunity here with respect to MDNA55, or we call it Bizaxofusp. We also have early-stage programs. I'll talk to you about one particular one, which is MDNA113. This is a drug which is a checkpoint inhibitor fused to an interleukin 2. The reason I'm saying this to you today, although it's getting ready for the clinic, which will be in the clinic next year, is that this morning, Takeda did a $11.2 billion deal with a company called Innovent that is also developing a similar compound, but we think ours is better than what Innovent is developing.
Finally, today I'll talk to you about MDNA11, which is our IL-2 super agonist that is in the clinic. We have data from over 100 patients now. As I said, a collaboration with Merck with this particular drug. There again, this particular IL-2, the IL-2 space, has been part of multiple transactions worth multibillion dollars over the past few years. Let's talk about what news flow we expect in the coming weeks and months. The very top on the list is, of course, MDNA11. We have the bulk of data that we'll share with you all in December of this year. Towards the end of this year, presenting data at a major conference in the UK where we will provide the up-to-date data on MDNA11, when it's used on its own or when it's used in combination with Merck's drug KEYTRUDA.
Also with MDNA113, which is the anti-PD-1/IL-2 fusion, which is a really exciting space, we'll have data from non-human primates as we get ready for entering the clinic next year with this product. Finally, Bizaxofusp or MDNA55, this is a drug that we're looking to partner, and hopefully, it'll bring in non-dilutive capital into the company. Let's start with MDNA11. This is, as I say, the phase 1/2 program. We finished the phase 1 portion. We are now in the phase 2 portion of the clinical trial. What we have, just as a background, and to tell you what IL-2 is all about. IL-2 really is an interleukin that we all produce naturally in our bodies, and it is there to stimulate our immune cells to fight off infection, to fight off cancer, et cetera.
I can assure you, by the end of my presentation today, each one of you will have had at least one cancer in you, and the reason you won't have cancer is because these immune cells are fighting them off all the time. We end up having cancers, cancer cells being generated regularly all the time in our bodies, but these immune cells fight them off. Unfortunately, when patients are sick or ill, the immune system is weak. It's not able to fight off cancer, and this is where IL-2 comes in place. IL-2 was approved about 20 years ago, a drug called PROLEUKIN. That particular drug was used to treat patients with skin cancer and kidney cancer.
Unfortunately, that particular drug, although it shrank and cured patients of cancer in about 5% of the patients, the problem was that there was an equally good chance that you could die of the drug because it was so toxic. The other thing was that the drug would clear from your bloodstream very, very quickly, so you'd have to treat the patient three times a day, every eight hours for five days. Because it was so toxic, you had to be entered into an intensive care unit from the very beginning and get your treatment in an ICU. A number of companies, Roche, Bristol-Myers, Sanofi, have all been engaged in the IL-2 space, trying to develop an IL-2 that's going to stay in your bloodstream much longer. You don't have to treat patients 3x a day.
Hopefully, you can treat patients once every three weeks, which they were successful in doing. The problem was that you can see that they acquired these assets in these multibillion dollar transactions. The problem was that their IL-2s, although better designed, were not able to show tumor shrinkage. When you used their drug on their own, the tumors did not shrink. Yes, they were safer. Yes, you could treat once every three weeks, but the tumors did not shrink. Therefore, they abandoned this program. What we're doing at Medicenna is really addressing that big issue. You can have a safer drug, but what's the point if it's not going to shrink your tumor or cure the tumor?
This is what we've been able to show in our studies so far, that with MDNA11, we are not only treating patients once every two or once every three weeks, but actually curing patients or shrinking tumors in a vast majority of patients. These patients are not newly diagnosed. These patients have failed KEYTRUDA. These have failed the big blockbuster drugs. I'll share those data with you shortly. If you look at the big market opportunity, where is it with MDNA11? If you look at on the left is Merck's KEYTRUDA that's going off patent in 2028, in three years' time. Today it is the world's biggest selling drug, nearly $30 billion in sales annually, higher and bigger sales than Ozempic. This is a big drug. You can see that in patients that have previously failed therapies, only 16% of patients have tumor shrinkage.
If you then look at Bristol Myers' drug, this is sort of taking two of their blockbuster drugs, combining them together. Even then, you have 20% of the patients responding to treatment. Whereas with MDNA11, which has the IL-2 super kind fused to this albumin, we are seeing that we are able to shrink 30%- 50% of the patients' tumors, despite the fact these patients have failed checkpoint inhibitors. What does MDNA11 look like? On the extreme left, what you see is the engineered IL-2 we brought in from Stanford. What we've done is we've engineered it so that it's a lot more safer. We've engineered it so that it's able to stimulate the cancer-fighting immune cells that we need. That's the key thing here. None of the others have ever done that. We've engineered it so that the binding of this molecule is dramatically improved.
The IL-2 that we have will bind to the cancer-fighting immune cells about 100 x more effectively than the IL-2 being developed by others. That's the big thing. Another thing we did, which was very unique, was we fused our molecule to albumin so you can stay in the bloodstream much longer. It made the molecule bigger. In this way, we can treat patients once every two weeks or once every three weeks. What is very interesting is albumin tends to accumulate in the tumor and in the lymph nodes that are close to the tumor. The lymph nodes are where you have your immune cells. That's where you train your immune cells. That's where you are able to generate immune cells that can recognize the tumor and attack it.
This is what ends up sort of creating what we think is a much better response with our drug than other IL-2s or, for that matter, other immunotherapies. Let me give you some examples here of what we've been able to show in tumors. We've seen a number of patients. You can see tumor shrinkage. These patients have all previously failed at least one, if not two, sometimes three different immunotherapies. These are end-stage patients. They have no other treatment options. These are the patients we treated. We are seeing these kinds of responses in these patients. Seeing that sort of response rate being so much better than checkpoint inhibitors is really exciting. I think one important one that I need to bring up is the pancreatic cancer patient. A pancreatic cancer patient had surgery.
The patient then had a combination of four different chemotherapies together, and the tumor continued to grow in the liver. Stopped taking it, went to another combination of two different chemotherapies. The patient simply could not tolerate it. It was so toxic. The patient went to the mega blockbuster drug KEYTRUDA from Merck. Again, that patient's tumor continued to grow in the liver. This patient entered our clinical trial. Soon after receiving our first dose, these patients, we started to see the tumor stabilizing initially, starting to shrink. Eventually, the tumor completely disappeared. These tumors were in the liver, which is a very difficult place to have a tumor shrink. More importantly, this patient has stopped treatment with MDNA11 or, for that matter, any other drug since December 2023. We are getting close to December 2025. There is no sign of the tumor coming back, which is really exciting.
Have we cured this patient? I don't want to say we have, but it seems like we might have. We see the same thing with a cancer patient with melanoma. A complete cure of the tumor, despite the fact that the patient failed multiple chemotherapies and KEYTRUDA. We're seeing a durable tumor shrinkage, where it's not only shrinking and then growing back again six weeks later. These tumors get shrunk, and they stay shrunk for months and months to end. We're also seeing a very nice safety profile. We're not seeing the need for the patients to be in intensive care. These patients come and get treatment once every two or three weeks. The majority of them receive their treatment pretty much on an outpatient basis. OK. Where are we taking our drug? You can see pancreatic cancer patients. That's obviously really exciting.
We are also seeing melanoma is an exciting space for us. When we combine our drug with KEYTRUDA, surprisingly, we saw that these patients had failed KEYTRUDA. These are patients with endometrial cancer. This is really aggressive at this point. We saw half of the patients respond to this drug as well. We have multiple shots on goal with this particular drug, either on its own or in combination with other therapies. Let me give you an example of a sort of a benchmark as a comparator. Where are we from a valuation perspective? You can see that's where we are valuation-wise, about $60 million U.S., CAD 80 million . We are seeing response rates of 30% already with our drug on its own in patients who have failed checkpoint inhibitors. Look at these two other companies, Replimune and Iovance.
Both of them have valuations that are 10 x or more higher than ours, seeing similar response rates. These are difficult treatment procedures. With Iovance, you have to first extract the tumor from the patient. You have to isolate all the immune cells, grow the immune cells outside the tumor, outside the patient, inject it back in the patient. The patient has to be in hospital for 30 days. There is a good chance, 1 in 15 chance, that the patient will die because of the treatment. OK. They only get response rates of 30%. It costs per patient $550,000. You've got a 1 in 3 chance of having a response after spending more than half a million dollars. Replimune, on the other hand, has to have a combination of an oncolytic virus and a checkpoint inhibitor together.
On its own, FDA recently rejected their application for approval because they did not see their drug, when used on its own, was not able to shrink tumors. We, on the other hand, are seeing our drug cause tumor shrinkage in 30% of the patients with melanoma. There is a huge opportunity for us right from the get-go. We are looking at, in our phase II trial that's currently underway, patients with melanoma, which is 7,000- 10,000 patients available every year. Despite the small patient population, you can see sort of the $800 million valuation. MSI high tumors, it's a three times bigger opportunity. That's where we're seeing tumor responses as well. Finally, another biomarker, which is TMB high, where the opportunity is about 10 times bigger than melanoma. Just think about it.
We have valuation of about $800 million for these kinds of programs, whereas we have three shots on goal, perhaps even endometrial cancer. I haven't included it here. Potentially four shots on goal with data that's going to start coming out at the end of this year. We will be positioning ourselves for multiple opportunities with this particular drug. I believe this has a multibillion dollar opportunity for our shareholders and obviously benefit for our patients. Let's talk about something else. This is brand new. Happened this morning, 113. It is, as I said, a combination of anti-PD-1 and IL-2. It's a bispecific molecule. We call these BiSKITs™. Just to give you an idea, what's happening in this bispecific field, you can see these anti-PD-1s, multiple transactions occurring with this checkpoint inhibitor space. You can see these are multibillion dollar annual sales with a number of patents expiring.
Look at right at the bottom here. You can see these bispecifics. These are just over the past 12 months. You've seen these multibillion dollar transactions taking place. Even more important is the transaction that occurred today. It's an anti-PD-1 fused to an IL-2. This is a program that was announced this morning between a Chinese company called Innovent and Takeda. The total deal size was over $11.2 billion, with about $1.2 billion upfront, a $1.2 billion upfront. If I look at the data from their work that they presented, they've shown a response rate in melanoma with their massive anti-PD-1 IL-2 drug of about 20%- 30%. We are seeing a 30% response rate with only the IL-2 portion of our drug. Just imagine what we will be able to do with 113, where we have fused the IL-2 to our anti-checkpoint inhibitor.
The checkpoint inhibitor we are using is not a new checkpoint inhibitor. We are using the same checkpoint inhibitor that's going off patent, this KEYTRUDA and Opdivo. We are evaluating both, and we are going to test them in monkeys. The study is going on right now. We'll have data before the end of this year as to which will be the lead program. Is it going to be KEYTRUDA or is it going to be Opdivo for the clinical trial? What we've done is we've taken the blockbuster checkpoint inhibitor, fused it to the best-in-class IL-2. This is the same IL-2 that you see in MDNA11, and we have masked it with a drug called IL-13. This is an inactive drug, but it helps us to direct and localize the drug right at the tumor site. When the drug is circulating in the bloodstream, this particular drug is inactive.
It's not active because we are masking this molecule. When it gets to the tumor, these pink squares come off. It's like a switch. It comes off, and suddenly, the drug becomes active, binds to the cancer-fighting immune cells, and the immune cells are now supercharged to attack the cancer. That's what we do with this particular drug. The reason we use IL-13 is that it localizes the drug to the tumor because about 2 million cancer patients annually have tumors that have this particular target, and this target will only bind to this IL-13. This is where we have the exciting data that we will be sharing at the end of the year and also next year as well. Finally, last but not least, is our brain tumor program. This is really a drug that has shown some really impressive results.
Just to give you an idea from a background, 20 years ago, this drug was approved, Merck's drug, TEMODAR, and all it did was improve survival of brain cancer patients by 10 weeks and became a billion-dollar blockbuster for Merck. This particular drug is even today used as the first-line treatment. It is the only treatment available. We, on the other hand, with our drug, have shown that we can actually not improve survival by 10 weeks, but we're improving survival by seven or eight months, not in newly diagnosed patients, but patients who have failed surgery, failed radiation, failed TEMODAR, and got in our study. We're extending the lives of these patients by eight months. That is a big deal, and the opportunity is massive for this particular drug. You can see that even for the first-line or second-line or third-line treatments, it's an $800 million opportunity.
As you expand into different types of brain cancers, you can see the market opportunity is about $4 billion. Just from context, just to let you know, brain cancer or glioblastoma is uniformly fatal. We've heard about Gord Downey, the lead singer from Tragically Hip, who succumbed to this particular disease. We think we've got potentially the best drug for brain cancer as well. Multiple data readouts coming up this year, particularly before the end of this year. The company has cash runway into Q3 of next year. We are looking to share more data. We've got good coverage now. We continue to build analyst coverage in the U.S. as well. Importantly, to let you know that, as I said, ARA Capital is the largest institutional shareholder in Medicenna Therapeutics Corp. Insiders own 23% of Medicenna. There is skin in the game for management.
As I said, multiple readouts coming up. All of these, the first four of them are going to be disclosed before the end of this year. Coming up in December at a conference happening in the UK, a major cancer conference between 10th and 12th of December. I'll leave it there and happy to answer any questions. OK.
Yes.
You just finished phase I. Do you believe your organization studies were essentially powered?
No, the studies were not powered. These power studies will be part of a phase II. We have generated proof of concept now. The next thing, that's pretty much done now. We'll be ending by proof of concept by the end of this year. We are then planning to meet with the regulators, the FDA, to see if there's a pathway for a registration phase II trial. The phase II trial will be a registration trial seeking accelerated approval. It would be an adaptive design with the two arms, or it could be just a single arm because the primary endpoint for accelerated approval is tumor response, is tumor shrinkage. That's what we're looking for. No, ORR. That's what we're looking for. Yes. Yes, that's first line. FDA will not, this is end-stage brain cancer patients, sorry, melanoma patients.
If you look at Replimune and Iovance, both of them got, or at least Iovance got approval based on 70 patient data in a single arm phase II clinical trial. That's it. We're using the same approach. Because Iovance got approval based on a single phase II study, single arm phase II study, we are using the same approach. The difference being our drug is safer. It's obviously not going to cost $500,000. It doesn't kill 1 in 15 patients, which is what Iovance's drug does. Right? Yes.
I understand your excuse for KEYTRUDA doesn't work on about 1/3 of patients. Is that correct?
KEYTRUDA doesn't work in about 2/3 of the patients. It works on one-third of the patients. Despite that, you're seeing it's a $30 billion annual sales, and 2/3 of the patients don't respond, right?
I have a checkpoint in the future. The thing here is, with all of these, I don't see what all that research will hurt?
It will. Yeah, the exact copy of KEYTRUDA or Opdivo. It'll do the same thing. When they come out in 2028, they'll have the same results.
That makes sense. It would make sense that they would be your partners and that it's sitting there lately. It would be all this money being taken somewhere?
Absolutely. Others as well, potentially. Yeah.
On the mention of the response rate, 30%. If you look at the 11 of 17 patients, it means 2/3 of the patients either were flatlined, there was no change, but not a deterioration?
Yeah.
Improved and actually got a patient. Was that a 60% response rate? I'm trying to figure out whether it's a response rate or you have to have an improvement.
No. We set a certain, very, very strict guideline. Tumor has to shrink by 30% or more. Yes, even if patients' tumors shrink by 25%, we don't call it tumor response. It's that threshold. That's why when I say, yeah, you're right. When you looked at the graph I showed you, you saw that about 60% of the patients, either the tumor stopped growing or the tumor shrank by less than 30%. We did not include that in the numbers. If you include them, then it's about 60% clinical benefit rate. They call it clinical benefit. OK.
I think for experience of how IL-2 has a better binding to the tumor by design, that means it actually works better, but it sticks like up to a blanket?
Yeah.
It basically attaches?
Correct. It binds to the immune cells, not the tumor cells. The IL-2 binds to the immune cells. The immune cells, it's basically essentially stimulating the immune cells to grow and be more efficient and faster and more ready to attack the tumor. In fact, what we see in some cases, we see that these immune cells, at least in animal studies, when we are able to inject the tumor again in the mouse, the same tumor will never show up, even after a year. When we inject the tumor again, because the immune cells now have memory. They remember, just like a vaccine, that there is a tumor that has entered my body. It will attack it right away, and the tumor will never show up. That's what we call really exciting about this approach. That's why we're seeing durability.
That's why we're seeing patients, for instance, the pancreatic cancer patients, two years, no drug, no treatment, no sign of tumor. The immune cells, the memory immune cells, are there all the time, ready to attack as soon as the tumor comes out.
One set of events because COVID made you count 37 by score.
Correct.
Which is too much of a thing.
Yes.
I would have said that normally operating the body has got to be really throwing a blanket there.
Yeah. The thing is, obviously, we wouldn't be using our drug for, say, COVID, for instance. I think the key thing here is for certain infectious diseases where you have the opportunity, for instance, hepatitis is a good example. There, we've seen evidence that an IL-2 kind of drug can also stimulate your immune cells, immune system in such a way that it's going to attack those pathogens. Our focus is right now not on infectious disease or anything like that. We're focusing right now in cancer. OK. Yes.
How long did that work?
Sorry?
How long did it work?
Bizaxofusp, we first started in 2021, 2022. We had an end of phase II meeting with the FDA. They showed us a pathway to get approval for this particular drug. Unfortunately, at about the same time, we had multiple failures in glioblastoma, including big pharma like Opdivo, KEYTRUDA, etc., failing. There has been, I would say, over the past 30 years, a carnage of failures out there. When our data came out, we had these very big clinical trials, hundreds of patients in the clinical trials that failed. There was therefore reluctance for pharma to look at partnering. Things have changed this year, though. They're seeing there's interest again in the brain cancer space. We feel that there's an opportunity for us to take advantage of that. OK.
Any new data?
We have new data, but that's currently not published. It's being prepared together for a publication. We'll be using the data to submit to the FDA as well. Yeah.
And?
The next value inflection point for us is the data in December. December data is the next value inflection point. We have multiple data readouts coming up, first in sort of melanoma and these other tumor types, and then potentially other readouts as well. These are the key readouts coming up in the next three months. Our burn rate is about CAD 4 million-CAD 5 million. We've got enough to take us into Q3 next year.
Do you think this happened?
This happened. This was a deal between Takeda and a company called Innovent. Innovent is a company based in China. They have a number of them. They've got a huge pipeline of molecules. One of them that is generating a lot of excitement is the anti-PD-1/IL-2. That's the drug that they licensed or partnered with Takeda. It's $1.2 billion upfront, and there's milestone payments, et cetera, that come in. That's up to another $10 billion, which makes it about $11.2 billion total. OK. All right. Thank you very much. I appreciate that.