Morgan Stanley 19th Annual Global Healthcare Conference

Sep 9, 2021

Well, great. Thanks for joining us for the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Very pleased to have Vaxtech with us here. Quickly before we get started, I need to read a disclosure statement. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures appear on the Morgan Stanley public website at morganstanley.com/researchdisclosure. So, Bill, I thought we'd start off maybe with sort of a broader program before we go into each of the programs that you've got in the clinic. But I think through COVID, everybody's gotten familiar a little bit with Chadox. So maybe you could talk about Chadox MBA and sort of the basis for the company here and why you think that's a good platform to generate therapeutic vaccines? Thanks, Matt, and thanks for having us. Certainly. So, the ChatEx MBA platform was developed at the University of Oxford at the Jenner Institute. And the rationale there is, we know adenode generates the highest levels of CD8 positive T cells of any technology platform out there, bar none. And that we can stimulate that even further by coming back with a heterologous prime boost, so a different vector other than an adeno. And NVA, through a lot of trial and tribulation at the Jenner, was found to be the platform that worked best. And so, we're really technology agnostic, to be honest. This is the platform, the combination of viral vectors that is giving us the highest levels of CD8 positive T cells for the longest duration of time. And we know from work that others have done in chronic infectious disease and through the CAR T space that high levels of long duration of CD8 positive T cells can be important in certain disease areas. You're on mute, Matt. Sorry. Appreciate that. Thank you. So look, I guess the place to start after that is, so if you know that how did you pick the targets, why is the pipeline set up the way it is? And just give us a little bit of insight there and then we can obviously go through the programs. Yes. So again, very consistent with what I was explaining before. We went after targets where we believe that T cells are going to have an impact, particularly CD8 positive T cells. And so, we're looking at chronic infectious disease like hepatitis B and human papillomavirus, where we believe those will be important in the cure because that's how those diseases are cured naturally. We knew through the natural clearance that occurs in the small portion of patients in HBV, but in a larger proportion of patients in HBV. It's all done through the T cell mechanism. And in oncology, very similar. There's a lot of work being done to show that T cells were important in the clearance of cancer. Okay, great. And actually one more question, I think before we go into pipeline specifics. But I think investors have seen over the last 10, 15 years a variety of therapeutic vaccine platforms. And in general, the data and the potential of those platforms really haven't delivered. So maybe just, I guess, give people a little bit of context to why you think that's not going to be the case here. And obviously, you pointed to the level of T cell generation that you have, but maybe other points would just be helpful. Yes. I mean, again, the 3 areas where we think we have differentiation is in the ultimate magnitude of the T cell response. And we know magnitude is important. If you look at CAR T stuff that if you don't give enough CAR Ts, you don't get a response. If you increase the amount of CAR Ts, then you do get a response. And you also want that to be long duration. And so, what we're seeing is levels of anywhere from 2,000 to 6,000 spots per 1,000,000 in an ELISA SPOT assay. 2 years out, we're still seeing levels that are above the peak of any other technology platform out there. So, it's really a significant increase in the magnitude and the duration of the response. And by every measure that we've been able to look at, we also sort of these responses are polyfunctional. So, they're doing what they're supposed to be doing. They're actually recognizing and killing the infected cells or the mutated cells in the case of oncology. So, that's what gives us the hope that this is going to be successful. Also, companies like Inovio have kind of showed that in HPV, for instance, they get some efficacy, maybe not sufficient for commercial activity, but they are seeing some efficacies even at a much lower level of CD8 T cell response. And so, we think we can improve on that and thereby increase the efficacy. Okay. Okay, perfect. Great. So maybe we should start with HBV mainly because that's the nearest term readout here. I guess maybe give people a sense of the kind of data we should expect to get here at the end of the year and also broadly how you think this is going to fit into this sort of treatment landscape for HBV, which continues to emerge, I guess, is the way to put it? Yes. So, I think this year we'll have data, we'll also have safety and immunogenicity study. So, safety and immunogenicity data. We've got 2 studies ongoing right now, HBV001 and HBV002, which is a Phase onetwo. The HBV001 is in healthies and in chronic patients, but it's only being treated with CHADOC. And it's really designed as a safety study. And since this is first in humans, and then also looking at cross reactivity because our construct was designed as a genotype C specific construct. And so, we want to look at cross reactivity across other genotypes. Genotype C is the most prevalent genotype found in the world, a lot of it in Asia, in Eastern Europe, which is consistent with where a lot of the chronic HBV infections are as well. So those are data that we expect to come out here in the Q4 of this year. And then in the Q1 of next year, we'll be able to add in some of the efficacy data around surface antigen reduction. So, as I mentioned, this is gene type C specific that the Phase II trial is being run-in Taiwan and South Korea as well as the UK. So we hope to get more genotype C specific patients in that patient population. And then look for and again, at this stage, we're looking for biological activity here. So, if we get a half a log to a log reduction in surface antigen in these patients, that's a good start given that we're doing a single prime and boost. I think most thought leaders in this space, as you mentioned, there's a it's evolving, but I think most people think that it's a multi faceted approach is going to be necessary. So, we are combining our PRIME BOOST. Patients are already getting antivirals, the tenofovir and tecovir to keep the DNA low. We come in and stimulate the T cell response. But we know in HBV that T cell exhaustion is a problem. And so we're also combining with low dose checkpoint inhibitors to try and deal with that T cell exhaustion as well. Okay. Okay, great. So, as we think about the data we're going to get at the end of this year, obviously, we got a little bit of look at safety, a little bit of look at immunogenicity. How much do you think that gives people a view on obviously what they care about, which is surface antigen data in the Q1? Or do you think there's not much not a significant read through there? Yes. I think we don't know enough information at this point to know how much read through there's going to be in that to be candid. We're looking to see whether we can get we demonstrate that we can get high levels of the T cell response. We know that's going to be knocked down somewhat in the chronic hepatitis B patients, but we still want to see a response into response to the antigens that we're using. So, we're using surface antigen core and polymerase as the antigens there. So, we want to make sure that we're seeing read through on all of those antigens in both the healthies and the chronic. Okay. And then you mentioned half a log to a log. Maybe just give people a little bit more context in terms of why that's the threshold you guys are looking for in terms of a good data set? So this is the first in man study. We want to be careful as far as dosing goes. You're trying to kill liver cells that are infected with hepatitis B. So if you go too aggressively, you may have other issues with killing too much of the liver at once, for instance. So, we want to do this in a controlled way, make sure that the product is safe. And then, look at other dosing regimens coming back with a repeat dose. We've shown that we can boost with multiple doses of MVA. So you can go with Chadox, MVA, MVA, MVA, you can go Chadox MVA, Chadox MVA. And we don't know what the right dosing regimen is at this time. But we hope to have at least have some level of biological activity in this first study. Okay. Okay. Got it. And so I think it's maybe the context then is we should think of that more as the minimum level of biological activity for you guys to proceed to then optimize the dosing regimen? Exactly. Exactly. In combination with that, we've announced the collaboration with Arbutus because, again, we don't know whether the prime reduced in combination with checkpoint is going to be enough. So, we announced collaboration with Arbutus where we're going to add in siRNA as well, another direct acting antiviral to see whether or not that's necessary or that will be helpful. Okay. And then maybe ultimately just for context like what do you guys see as ultimately what you need here in terms of the Optimum regimen? I mean is the idea to get people off of antivirals and have them have an effective cure? Like what exactly are you looking for in terms of the ultimate profile? Yes. The ultimate profile is a functional cure, right? So it's I think from the regulatory perspective, what we'd like to see is taking people off their antivirals and 6 months later still having surface antigen reduction. Okay. Okay, perfect. Good. So we'll look forward to that data then to get our first look on that program. So then second thing is you talked about HPV. Obviously, we do have, as you pointed to, we have some proof of concept with others in the field here. So maybe I guess first question is, why do you think you can do better or how are you differentiated versus what we're seeing out there? And then maybe we can talk about the trial. Yes. I think a couple of key ways we're differentiated here. Again, obviously, there's some like a broken record, but it's the magnitude and the duration of the T cell response, right? So I think that's one way we're differentiated. But in this case, we're also differentiated because we're going after early stage disease, right? So, there's a significant number of women out there who get diagnosed with persistent HPV infections and they have no dysplasia, no lesions. And they're basically told to go home and wait and come back in 6 months or a year. You're infected with an oncolytic virus, you may develop cancer. So, get checked at a regular basis. And if you develop cancer, we're going to cut it out. So, the premise here is why wait, why not treat them and clear the virus so that they don't end up getting cancer. And so, coming in and looking at early stage disease allows us then to actually get a breadth of antigen responses. So, when you're looking at the oncolytic indications in HPV, people are primarily focused on using E6 and E7, which are the antigens that are highly expressed in cancer. We can go back and look at E1 through E7. And so we get a much broader breadth of antigens and also we're targeting a much broader breadth of genotypes of HPV-two. So we're looking at 5 different genotypes where majority of folks are focused on HPV-sixteen and 18, which are about 70% of the oncolytic indications. Okay. Okay, good. That's helpful. So then you obviously have an initial study running there. What level of evidence can we expect to get out of that study? And what's your goal to be able to see there? Yes. So in this study, we're looking for HPV clearance as the obviously the secondary endpoint primary endpoint in this first in MANS studies is safety. But as the first secondary endpoint is HPV clearance as measured by quadratic PCR. So there's a a percentage of women who clear naturally, again, through a T cell mechanism, and we want to get a 50% increase above that natural clearance. Okay. And is the study, just for everybody's benefit, is the study powered enough to be able to statistically demonstrate that or are we just going to be looking at trends in this sort of initial population? Yes, there will be trends in this initial population. It's 105 people that will be included in the study. So you'll get you should be able to see reasonable responses. Okay. Okay, great. And then I guess one other thing because you pointed out, right, the other constructs that people have used have a different group of antigens and different group of overall subset of patients that they're looking at and you're looking at a much broader subset. So I assume the natural T cell clearing in that group is it also looks different. So maybe just give people a context so they can sort of rightly think about when you say a 50% improvement, what that actually looks like? Yes. So, I think in natural clearance rate, we are expecting somewhere in the 30% to 50% range. So, our target is 75% to 80% clearance. Okay, great. Great. Good. And I guess second question then is, let's say you can see that trend here, what how quickly can you move on this program? Because it sounds like maybe you don't have to do the same kind of potentially the same kind of dosing work that you might have to do in HBV or combination work. So maybe just help us think about the path forward. Yes. This trial was actually designed so that we can step it right up into a Phase IIb and expand the trial into additional locations increase the number of enrollees in the study. So we'll move pretty much right into that Phase 2b study. Okay. Okay. Great. Good. So then maybe here we should talk about some of the other work you're doing on. I guess prostate is probably really the next thing to discuss. I guess maybe the context that I would give is obviously, as we think about vaccines, right, viruses, there's some proof of concept, cancer vaccines, right, we've had even more trouble with. So maybe talk to us about why prostate seems to be a good place to start in terms of solid tumors and how investors should just think about the kind of data you can generate there? Yes. It's interesting. I don't know that I would have started in prostate if I was designed to novo. But when Vaztech was spun out of Oxford, Professor Adrian Hill, one of our scientific founders, had received some EU grant funding and had already started these studies. So, it was a legacy product that we showed last year had some pretty promising results. So, Professor Hill did a Phase 1 and a Phase 2 study using 5T4 as a self antigen. The Phase 1 study was in pretty early stage patients. So, it was before prostatectomy. And you showed that, in fact, you can induce a robust T cell response even against the self antigen using this technology platform, which really isn't easy to do, right? So, it's about 10 fold less than we see in against non self antigens, but you still see a pretty robust response. And then post prostatectomy showed that the T cells actually were infiltrating the tumor. And so, took this into a Phase 2 study in late stage metastatic prostate resistant cancer patients and showed an increase over checkpoint inhibitor alone in those patients. And so, we've got about a 23% response rate when measuring PSA as the primary endpoint. And greater than 50% reduction in PSA was the endpoint that was measured. So, it was an open label study. It was done in 23 people. So, not trying to over interpret those data. So, the KOLs and the PI that were involved here were sufficiently impressed with the data that we should follow this up with a controlled study. So, that's what we're working to do. So, because we had to remanufacture drug care to run this controlled study, we actually decided to add additional antigens into the construct. So, in addition to 5T4, we've got 3 additional antigens that will be added into the construct and that will get back into the clinic in the first half of next year. Okay, great. Maybe as we I guess one of the other things that's maybe just helpful to talk about is you obviously have rights or potential royalty interest in a variety of infectious disease vaccines too. So maybe just for everybody's benefit, just walk us through sort of what's going on there and if there are any key things that people should be looking at in terms of development of those vaccines? Yes. So again, we are much more therapeutically focused, but the technology platform is really flexible. And in Chaddox alone, as seen from the COVID-nineteen vaccine, generates a very robust antibody response as well. So, we moved really quickly to move forward that COVID-nineteen vaccine that we eventually out licensed to AstraZeneca through a deal with the university. But we have, as part of that, we get about 1.4% of net sales on the COVID-nineteen vaccine when AstraZeneca starts the commercial pricing. So, we agreed upfront that we weren't going to take profits and royalties during this pandemic phase. But when they start charging commercial pricing, then we have access to royalties. So, we have exclusive rights for all the things that we have in development and then non exclusive rights for anything new in infectious disease and exclusive rights to all of oncology for this technology platform. So anything new that comes along, new emerging infectious diseases, we have rights to move that forward and we've shown that we can do that pretty quickly. Okay. Okay, great. Good. Maybe we should also just touch on, since you're a new company, where you are in terms of cash, what sort of runway people can expect and what exact milestones that can get you through? Sure. Jurgen, do you want to add that? Yes, definitely. So Matthew, yes, so we are at slightly below $240,000,000 of cash right now, which is pretty much exactly as we expected during our IPO process, so no surprises over here. Where we expected the cash to be, we are, I think, the cash runway at least till H1 2024. And H1 2024, it's actually relatively pessimistic forecast. So based on the no revenue no cash revenue coming into the company, so which is you get, as you can imagine, pretty gray sky scenario. Okay. So from this standpoint, we believe we are fully funded for these 3 years and can progress all our existing programs and add new programs as well. Okay, great. Perfect. So Bill, maybe in the last couple of minutes, we should just also touch on you have a variety of earlier stage programs that you're thinking about 400, 500, 600. Maybe good to just touch on people and give people a little bit of a taste of what comes next in the pipeline. Yes. So, we're actually kind of working through that. I mean, one of the programs we didn't talk about is we have a lung cancer program as well that we're collaborating with Cancer Research UK. So they're actually funding and sponsoring a pretty large Phase III study that will be in the clinic later this year as well and in non small cell lung cancer. So we're looking at where it makes sense to move these things forward. Obviously, some virally induced cancers come to mind, such as EBV. That's a pretty interesting target for us, some different oncology indications. And then there's a number of other chronic infectious diseases that are also of interest that we have some early work going on it. Okay. Great. Well, both of you, thanks for being here. Appreciate it. Thanks for the good broad overview of the programs and look forward to the data coming in later this year early next year. Matt, thanks for having us. Really appreciate the opportunity. Thank you.