Phone. I would now like to hand the conference over to your first speaker today, Bill Enright. Thank you. Please go ahead, sir.
Thank you very much, and thanks everybody for joining us this morning. This is really a very transformational event for Vaccitech, and glad you could join us to learn more about it. I'll be going through the slides that you have, I believe, in front of you. First slide is a word from our lawyers. As a publicly listed company, we need to remind you that there may be some forward-looking statements. You can find out some additional information either on our website or at sec.gov. Onto Slide three. Really, as I mentioned, this is a transformational event for Vaccitech. The acquisition of Avidea really provides us with a number of key things. We really feel that this is a synergistic acquisition.
There's lots of complementarity between the two companies and our technology platforms. That will allow us to do things either in joint, so using some technologies from Avidea plus some technologies from Vaccitech, or with additional programs that are only based on the SNAPvax, or other technologies that Avidea brings to the table. It really also allows us to bring a top-notch group of scientists that have some unique expertise and expertise that doesn't currently reside within Vaccitech, and on the chemistry side and on the T-cell side, immunology side as well. They have a number of very late-stage preclinical programs.
They're very well prepared from a GMP perspective with lots of preclinical data across a number of different areas. It gives us a breadth of additional programs that we can add to our suite and continue to rapidly grow the company. It really gives us additional R&D engine to continue to develop the pipeline as well. You know, ideally here, what we're trying to do is really strengthen Vaccitech as a leader in T-cell approaches. Not just with the CD8 positive T cells that, where most of our current products focus on the therapeutic side, but expands that. It really feeds the pipeline and it establishes a U.S. presence as well.
Avidea being Baltimore-based in Maryland gives us that U.S. footprint, and that will allow us to attract additional talent in addition to the, you know, U.K. and European as well. I think it has a manageable impact on our runway from a cash perspective, as you'll see. Turning to Slide four, this acquisition really aligns well with our current priorities. You know, from a company perspective, what we're really trying to do is build on the translational expertise that we have in both manufacturing and clinical development. Looking at continuing to build the pipeline, not only with our current viral-based vectors. We've always said that we're technology agnostic. We're using this ChAdOx, MVA, prime-boost approach because it's the approach that's working the best.
This also gives us an opportunity to branch out into a new platform and it kind of leverages our expertise on the heterologous prime-boost side with a different type of platform. Really helps position us to be the global leader in immunotherapies and vaccines, particularly that leverage the T-cell immunology and with the goal of really helping, you know, improve billions of lives. The key value drivers that this acquisition brings, I've touched on some of these already.
You know, really maintaining the leadership position that we have deepens our current expertise, mitigates some of the risks to our current technologies outside with a different platform, and provides opportunities both dilutively and non-dilutively for additional funding as well as, you know, helps us on our path to rapidly add new programs into the pipeline. With that, I'm gonna turn it over to Geoff Lynn, one of the co-founders of Avidea, who will be joining us in a senior science role moving forward. Geoff?
Thank you, Bill. Hello, everyone. This is Geoffrey Lynn, a former CEO of Avidea Technologies and now starting my first day at Vaccitech as the Chief Medical Officer for Synthetic Immunotherapies R&D. I'm gonna talk through slides introducing Avidea and our platform technologies starting on Slide five. I'll try to keep this high level, but then also highlight how our technology platform is differentiated and can help build value. As you may know, while most licensed vaccine technologies for infectious diseases primarily rely on antibodies for efficacy, T cells for cancer and regulatory T cells for autoimmunity. It was this need that motivated us to spin out of Avidea Technologies based on our work from the Vaccine Research Center at NIH in 2016, with the goal of developing vaccines that can be programmed to precisely control T-cell and antibody induction.
Since our inception, we've raised nearly $8 million in financing with more than $20 million in in-kind support through partnerships, allowing us to grow to a team of 14 immunology and nanotechnology experts developing a pipeline of immunotherapies based on two distinct platform technologies referred to as SNAPvax and Syntholytic, which are our vaccine and intravenous drug delivery platforms, respectively. Key differentiators of our platform technologies that are really highlighted on the right side of Slide five are that they are synthetic and programmable. Meaning that we can exert precise control over formulations of nanoparticles co-delivering multiple antigens and/or immunomodulators, allowing for tighter control over immune responses needed for diverse applications ranging from cancer to autoimmunity. For both platforms, we have developed cGMP manufacturing capabilities and demonstrated safety and efficacy in mice and primates, establishing a key preclinical proof of concept data.
While we are developing candidates based on both platforms, our most advanced candidates are based on our SNAPvax technology, which I'll describe in greater detail on slide 6. The SNAPvax technology was purpose-built to address the need for generating T-cell and/or antibody immunity against any antigen. For example, a current challenge is that expression systems such as RNA and viruses may not be able to target posttranslationally modified antigens such as glycopeptides well represented on tumor cell surfaces, and RNA may be limited for inducing T-cell immunity needed for cancer and autoimmunity applications. Synthetic peptide vaccines provide the advantages that they can be used to target any antigen that can be produced synthetically, including various posttranslationally modified peptide antigens, and combined with specific immunomodulators for inducing T-cell immunity. For peptide vaccines to be effective for inducing T-cell immunity, peptide antigens must be co-delivered with immunomodulators and nanoparticles.
Those are the key ingredients that are needed to target immune cells of prime T-cell immunity. However, existing nanoparticle technologies often suffer from manufacturing challenges and fail to ensure reliable nano formulations with multiple antigens and immunomodulators. To address this challenge, Avidea developed the SNAPvax technology, which leverages proprietary self-assembly technology to co-deliver antigens and immunomodulators in nanoparticles of precise programmable composition, thereby overcoming a major historic manufacturing challenge. The resulting nanoparticle compositions are of an optimal size and composition for targeting immune cells of prime T-cell immunity. Moreover, owing to the modular design of SNAPvax, we can either co-deliver an immunostimulant, such as a toll-like receptor agonist for inducing cytotoxic T-cell responses for cancer treatment, or co-deliver an immunosuppressive agent such as an mTOR inhibitor for inducing regulatory T cells for tolerance applications, including treatment of autoimmune diseases.
In this regard, we've established compelling proof of concept of SNAPvax for both oncology and tolerance applications summarized on Slide seven. As reported in recent cover articles in Nature Biotechnology and Nature Immunology, we've demonstrated that SNAPvax as a cancer vaccine in preclinical studies can be used to broadly target tumor antigens, including tumor-associated self-antigens, viral antigens, and tumor-specific neoantigens and that the platform induces about 5-10-fold greater breadth of T-cell responses compared with published data. Other differentiators established in preclinical studies are that SNAPvax can be dosed by the intravenous route to not only prime and expand T-cell responses alone or in combination with Vaccitech's existing platforms, but also reverse tumor-suppressive microenvironments owing to the small size of the SNAPvax particles that may be able to cross leaky tumor vasculature and release the immunostimulant in the tumor microenvironment.
As a synthetic peptide vaccine, SNAPvax can also be repeatedly administered to maintain responses. Unlike viral vectors and expression systems that are inherently pro-inflammatory, may be effective for cancer and infectious diseases, those platforms may not be ideal for tolerance applications. However, SNAPvax is a peptide vaccine that is largely immunologically inert. This provides the advantage the immune response can be programmed based on the co-delivered immunomodulator, allowing for either a pro-inflammatory response to drive cytotoxic T cells for cancer, or a suppressive immune response to drive induction of regulatory T cells. As shown in the figures, we've now demonstrated in animal models of experimental autoimmune encephalomyelitis, which is an animal model representing multiple sclerosis, that SNAPvax as a tolerance vaccine can completely prevent disease through induction of regulatory T cells.
Based on this compelling proof of concept, we may advance a candidate for treating multiple sclerosis, but believe that the unique advantages of SNAPvax may make it well suited for a range of indications in tolerance spanning allergies, autoimmunity, and transplant that we are currently evaluating. Moving to Slide eight, I've discussed key applications of SNAPvax as a cancer vaccine, tolerance vaccine, abbreviated CV and TV, but also want to stress that we have generated compelling proof of concept in collaboration with the VRC at the NIH that SNAPvax antibody vaccine, SNAPvax AV, may also be an effective platform for focusing antibody responses against specific targets for infectious diseases or even for targeting antibodies against aberrant proteins involved in neurodegeneration.
Given the immense interest in RNA platforms, our team is developing a platform for RNA delivery that aims to address the need for improved induction of T-cell immunity and safety by the intravenous route. Finally, as an orthogonal approach to treating cancer and chronic infectious diseases, our team has developed a platform referred to as Syntholytic, which is designed for tissue-specific accumulation and drug release. For example, within oncology, a candidate Syntholytic may be used for delivering small molecule-like STING agonists to tumors by the IV route as a means for reversing tumor suppression and priming T-cell responses against antigens present within the tumor, which can be used alone or in combination with other immunotherapies, including vaccines.
In terms of combinations, as shown on Slide nine, we've already generated compelling proof of concept in animal models that SNAPvax can be used in combination with Vaccitech's ChAdOx platform to induce higher magnitude T-cell responses and improve survival of treated animals as compared with either SNAPvax or ChAdOx used alone. We also have data suggesting that Syntholytic may be used in combination with Vaccitech's existing viral vaccine platforms to augment T-cell function by, for example, inducing innate immune activation within tumors or sites of chronic infection to promote T-cell recruitment and reverse the suppressive microenvironment in those tissues. Moving to slide 10, combining our complementary technologies and teams creates exciting new possibilities. Within infectious diseases and cancer, Avidea's SNAPvax platform expands the pool of potential targets, including post-translational modifications, glycopeptides, and enables synergistic combinations, thereby increasing probability of success in highly competitive areas.
Within the tolerance space, the ability of Avidea's SNAPvax platform producing regulatory T cells opens a whole new therapeutic area where we're highly differentiated. Together, these complementary platforms, coupled with a robust, established R&D engine, will enable our combined teams to launch two to three novel and differentiated candidates per year, which each represent large market opportunities. I'll now turn it over to Bill to describe the pipeline.
Thanks, Jeff, and thanks for walking through that. Really exciting technology platforms, as you can see. That leads us into slide 11, which is our near-term pipeline. You can see, you know, we're continuing to advance the current programs that we have been focused on. Our HBV therapeutic, obviously, we had some pretty exciting data that we announced last week with that program in the phase I/II study that's ongoing, you know, demonstrating that we saw a promising reduction in surface antigen at the three-month time point in a number of patients in Cohort 3, where we had ChAdOx plus MVA with the nivolumab at the same time as the boost.
We also had interesting data with just ChAdOx and MVA alone. The focus there will be finishing up that phase II clinical study, and focusing on those two cohorts where we're seeing activity. HBV therapeutic, again, moving forward, interim efficacy data still planned for the third quarter of 2022. The enrollment there seems to be picking up now across the sites. We've added four sites in Estonia, so to help with enrollment. That will continue to progress, I believe, and keep this program on track as well. The prostate cancer program, we will have back in the clinic, mid-year next year. Again, the...
This is building on the promising phase II A data that we had using the 5T4 antigen. And this new construct, VTP-A50, will include three additional antigens to broaden the potential response. Then finally, on the oncology side, VTP-600, we still anticipate having the first patient dosed by the end of this year. Likely will be in the next few days. And we'll announce that shortly thereafter. On the Avidea side, the new programs that we'll add to the Vaccitech pipeline, we do anticipate bringing an oncology program yet to be identified. We've got a number of things that we're looking at here and prioritizing that are possibilities.
These are, as we said, late-stage preclinical programs, so we expect to be able to push these into the clinic within the next 12-18 months. Similarly, as Geoff alluded to, there is an opportunity here on the autoimmune side as well. Geoff mentioned MS and a number of other things. Again, we are prioritizing those programs based on the available preclinical data, and we'll announce one of those programs moving into the clinic as well, again, in the 12-18-month timeframe. We need to prioritize and then move those through manufacturing, but we will push to add, you know, at least two programs into the clinic on an annual basis for the next few years. Again, the focus here is on the therapeutic side.
We still have the prophylactic programs moving forward, the AZD1222. AstraZeneca did announce in their third quarter earnings call that they've actually initiated commercial pricing and have commercial contracts now. That will allow us to likely get royalties from that program starting in 2022. Then we've got the ongoing programs in MERS and zoster that are partnered with, in part with, CEPI and Janssen, to move that program into phase II on the MERS program and with CanSino Biologics in China on the zoster program. Exciting times for the company. We do intend to keep a fairly rapid pace of growth moving forward, and we'll continue to add these new programs along the way.
Let me turn this over to Tom Evans to talk about this next Slide 12.
Yeah. Thanks very much, Bill. As you can see, this basically opens up a variety of different approaches for us, including the use of our next generation of viral vectors, which have now been validated in our hepatitis B program, the SNAPvax programs that Jeff has talked about, which we will expand both our indications looking at CD8-positive T-cell induction, but importantly allow us to get over into the regulatory T-cell side, which was not approachable with our viral vector system. Importantly on looking at a variety of RNA platforms, and Jeff's team has some good expertise on the formulation of nucleic acids with DNA and RNA, which we can now move forward in a much more concerted fashion.
This really opens up our R&D capabilities, allows us to go from being more of a translational program to having a greater R&D driver engine, as Jeff mentioned in the first slide. We're excited by these new capabilities, and we will build out our research teams both in the U.S. and in Oxford to help drive our overall pipeline. I'll turn it over to Georgy to talk about the transaction overview on Slide 13.
Thank you, Tom. As we announced yesterday, the consideration for the transaction was $40 million, excluding debt for cash. The consideration was split around $12.5 million of cash and $27.5 million of equity in Vaccitech ADS. We have also agreed to pay certain milestones upon reaching certain clinical points or commercialization points to Avidea shareholders, and obviously if these points are reached, this will be a pretty exciting stage for the company as well. There's no financing conditions attached to this transaction. The funding of the transaction will be funded from the available cash.
Post this transaction, we've got around $270 million of cash, which provides us more than enough cash into 2024 on the most conservative scenario of no revenue. With additional revenue which we expect either from the AZD1222 transaction or any other commercialization opportunities we have with more advanced programs, obviously this cash runway will expand proportionally. Echoing what my colleague said, we will add new programs to the existing pipeline, with at least two expected to go into the clinic within the next 12-18 months. Therefore, we're speeding up our growth and development, and we'll be investing around $45 million-$50 million into R&D in 2022, which is obviously a step up from our current pace.
Lastly, the transaction closed on the 10th of December and was unanimously approved by both boards of, for the companies. Let me pause over here, and, we're happy to take any questions.
Thank you. We'll now begin the question-and-answer session. As a reminder, over the phone lines, if you wish to ask a question, just press star and one on your telephone keypad and wait for your name to be announced. Once again, over the phone, just press star and one on your telephone keypad. You can also submit questions via the webcast. We do have a couple of questions that came through over the phone. The first question comes from the line of Andy Hsieh from William Blair. I'll open the line now. Please go ahead and ask your question.
Great. Well, congratulations to the Vaccitech team. It's a really, like you said, transformative deal that would really kind of you know set the growth pace for the next couple of years. Really happy to see that. I asked a couple kind of follow-up questions following you know kind of yesterday's conversation. One is, you know, Geoffrey, I think you mentioned about the glycopeptides. Just curious about the manufacturing route for that. Would that be like a chemo enzymatic route? And also we've seen more and more discussions about vaccine through the mucosal route. I'm just curious about the application of the SNAPvax platform, you know, whether that can be applied there or it's mostly restricted to the IV route. Thank you.
Yeah, great question. This is Geoff speaking, and Tom, if you want to add anything, please do. The first question is about manufacturing glycopeptide vaccines and other post-translationally modified antigens. These can all be produced by synthetic chemical means. We've currently demonstrated proof of concept including published data now showing that we can manufacture glycopeptide-based vaccines for HIV. That was work that was done in collaboration with Duke and Vaccine Research Center. Since that time, we've branched out and demonstrated that we can manufacture and scale up vaccines targeting other post-translational modifications.
This opens up, we believe, a broad range of potential antigen targets that may be critical for a number of diseases, including cancer, where, for example, you have a lot of tumor-specific glycans represented on the tumor cell surface, representing excellent potential targets. With respect to the second question was
Mucosal route of administration.
Right, mucosal route of administration. This isn't something we've prioritized, as we've been primarily focused on cancer applications. We've focused there on really enabling intravenous administration, which is a major challenge given that you're going by the IV route with a pro-inflammatory formulation. But given that our team is, you know, I'd say has a lot of experience in the vaccine space applied towards, you know, translating for different routes, this is an area that is gonna be a focus for an investigation on the R&D side. Believe it's something that we'll be capable of achieving, should it, you know, warrant further development. So.
Yeah, I'll just add to that. This is Tom Evans. The concept of using what's called Prime-Target, where you prime by an IM route or ID route, and then you basically pull those T cells in by focusing to the mucosal surface of choice, whether it's the cervix or the vagina or the lung, is a hot area of research right now in the vaccine space. Certainly we will be focusing on generating data in that area to see whether we should be moving in that direction. It's an area of interest, but not an area that we have developed any data to date in, although there is quite a bit of data using both the adenoviral and the poxviral platforms by mucosal routes.
Got it. You know, last question, if I may. You know, Bill, I think you've mentioned about your kind of high-level strategies in terms of partnering out compounds. Just perhaps following this transaction, does that alter that strategy a little bit? Maybe share with you your views on potentially partnering your pipeline assets. Thank you.
Yeah. I mean, Andy, we're gonna continue to evaluate that on a program-by-program basis, as we've talked about in the past. You know, we do think that it's possible for us to commercialize HBV and HPV, those therapeutics moving forward. Whether or not we would try and compete with big pharma in the oncology space is doubtful at this point, given the you know, size of the company and where we are. I think it'll be, you know, we'll continue to evaluate that on an individual program basis.
Great. Thank you very much, and congratulations again.
Thanks, Andy.
Thank you. The next question comes from the line of Carter Gould from Barclays. Your line is now open. Please go ahead.
Thank you. Good morning. Congratulations on the deal and all the momentum. I guess first one for Bill. I appreciate all the commentary on the and the transformational characterizations. I guess one of the questions we have is just sort of, you know, why now? You guys certainly have your plate, you know, pretty full right now and, maybe speak to the sort of the timing piece. Maybe for Greg, you know, I guess one of the, you know, questions or overhangs around, you know, these TLR agonists, you know, just kind of working through, some of the dosing and timing questions that will inevitably come up.
I recognize to some extent that will be empirical, but I didn't know if you guys even had, you know, even at a high level, any thoughts around the complementarity in terms of timing between this new platform and then, as you think about, you know, just the various cancer therapies you've developed and sort of how you thought about the timing and dosing there. Thank you.
Great. Thanks, Carter. Appreciate that. You know, why now is because it was available. The technology is exciting. I think it's at the right stage for us to get involved. Geoff and his team has done a fantastic job developing the pipeline, really understanding the platform, getting these ready to go into the clinics. You know, what Vaccitech has showed, I think repeatedly is, we have the focus and the group that can move these things through the clinic effectively. That's in part why I think this is a really good match. The technology aligns very well with what we have going on and provides us
You know, risk mitigation, if the viral based platform, you know, doesn't perform. Although, as you see from the AZ product and from the HBV data that we have so far, and even the prostate data that you know that all looks very promising. You know, the goal of the company is to continue to grow and push things forward, and we just felt that this was an excellent opportunity for us.
This is Tom. From a timing point of view, we have new products in manufacturing, as Bill said, dosing in the major MyISO. Our partners in China are starting GMP manufacturing, and so this will allow us to slot in new programs towards sort of the middle to the end of next year with using Avidea's technology. Their manufacturing is quite straightforward. It's called sort of a plug and play. Obviously, we need to get through the first GMP dosing. In terms of the dosing regimens, right now Geoff's team is planning to go in shortly to do dosing regimens in non-human primates, which will allow us to understand better how we'll design the first phase I trial using the SNAPvax technology.
You okay, Carl?
Okay, thank you. We will now take the next question, and this comes from the line of Matthew Harrison from Morgan Stanley. Your line is now open. Please go ahead.
Hi, this is Avatar Jones. I'm from Matthew. A couple questions from us, and apologies if they've been addressed. Firstly, how do you think about using virus-like particles in tolerance, and how could that be additive to any of your lead programs? Secondly, can you increase the diversity of antigens in your programs to improve efficacy?
Let me take the first one, and then Geoff can answer a little bit too. The ChAdOx plus MVA program really does not drive regulatory T cells towards tolerance. The regulatory T cells for tolerance are mostly in the CD4 category as opposed to the CD8, and they are driven by different signals, such as a variety of different mTOR and IL-10, TGF-beta. There are a variety of different things that will drive T cells towards a tolerance profile. By using small molecules that are in the viral, like in the nanoparticle, basically what you're doing is you're delivering the antigen and the immunomodulatory small molecule at the same time to drive the T cells over.
As you could see in that preclinical data, there was a 1000-fold change in the TH1 to T regulatory ratio by using this technology in the preclinical data that Avidea's generated, and quite promising data in the encephalitis model in the mouse. That's it. In terms of multiple antigens, one of the interesting things about the SNAPvax technology, which Jeff did not talk about, but which he may be able to list on, is you can put as many as 4 or 5 different antigens into one particle. That is, they will self-assemble by using a variety of different antigens, and those can be sort of anywhere from 50- 100 amino acids long.
That means that you can, for example, present, say, four different flu antigens or four different coronavirus antigens on the same nanoparticle to allow you to get a diversity of response. There's very compelling data from the VRC using a similar mechanism with ferritin. This concept of using multiple antigens to drive both cross-protective responses and a variety of responses is quite doable using the SNAPvax technology. Probably in a way that's slightly better than the way we do it using fusion or multiple antigens in a vector system, which also gives you the chance of recombination events across the different antigens if they're similar enough. Geoff, you wanna augment that answer at all?
Yeah. Tom, that's a great explanation. The only other thing I would add is that, you know, this is not a virus-like particle technology, but it provides a lot of advantages over recombinant technologies like virus-like particles or VLPs. The key characteristic is that, you know, with recombinant technologies, you're limited to what you encode by the DNA that's expressed as RNA and then translated to protein. With these synthetic systems, we can deliver any combination of immunomodulator and peptide antigen, including various modifications of the peptide antigens that we know are present in diseased tissue and that can otherwise be expressed using current expression technologies.
That degree of control allows us, you know, a much greater degree of control over what we can target with this kind of system. Really the innovation that I would say is quite unique and what maybe is somewhat similar to virus-like particles is that we figured out how we can self-assemble multiple different components together in a programmable manner so that it has the exact composition that we've designed the nanoparticle to assemble to. That program self-assembly is what allows us to co-deliver multiple components and control the type of immune response that's generated.
Understood. Thank you. Appreciate the answers.
Mm-hmm. Thank you.
Thank you. The next question comes from the line of Yi Chen from H.C. Wainwright. Your line is now open. Please go ahead.
Thank you for taking my question. Can you comment on the size of the future milestone payments and what event will trigger the first milestone payment?
Sure. Why don't I take this, Yi? So ultimately, the milestone payments are three, capped at $40 million, so they're up to $40 million. Then ultimately, they're split into two. You know, one is the commercialization point for the product which use the SNAPvax technology, or ultimately reaching clinical milestones, which we have not made public, but it's close to phase II.
Thank you.
Thank you. No further questions over the phone lines. You may continue, speakers.
Well, thank you very much for everybody for your participation this morning in learning more about this transformational event for Vaccitech, and we look forward to continuing discussions with you in the future.
Thank you.
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That concludes our conference. Yes, sir. Thank you. That concludes our conference for today. Thank you all for participating. You may now disconnect.