2cureX AB (publ) (2CUREX) Earnings Call Transcript & Summary

Welcome to this live broadcasted interview with 2cureX, a med tech company leading the work in individualizing cancer treatment. Viewers can ask their questions in the live chat, and I will raise as many of them as I can. Now let me welcome newly appointed CEO, Nat Hutley, how do you do?

Very well. Thank you. Thanks for having me.

Nice to have you here. Let's start with the basics. Who is 2cureX?

So 2cureX, it's got an exclusive license to commercialize IndiTreat, which is the only CE-IVD approved product, which is essentially you take a biopsy of a tumor and we can replicate the tumor and then we can test different chemotherapies on it to work out which one is most effective to make a more informed treatment decision essentially.

Okay. And how did you first come to be involved in tumoroids?

So I first found out about it when my first child was born, when we did a stem cell harvesting, which is where you take a bit of the placenta and store it just for the future. And that field of medicine is called organoids in general. And I became pretty interested, obsessed, you might say, with organoids and their various different applications. At the time, I was working for a family office called Kinled. And we looked at putting together an organoid fund, and there were some early investments in tumoroids, which is a very good application for this technology because tumors can replicate very easily, and they have, in many ways, lots of the -- yes, it's a very good use of the technology.

And what made you get even more involved?

Well, I think, essentially, it doesn't come -- it doesn't stand up to reason. I found a couple of very interesting points. One was that routine testing of actual tumors is not done during the cancer journey of a patient. So after the biopsy process, typically, the only test that's done is a cross-section where they maybe do a stain test or a dye test to see whether it's first stage, second stage or third stage. But after that, actually, the tumor then just gets taken away. So that was something that I found very strange. Now there are more and more routine tests. Genomics is growing in this field and has fantastic application. But then I came across this other thing that there are 320 approved chemotherapies in Europe. And so it just doesn't stand up to reason that the oncologists have got essentially a multiple choice as to which chemotherapy to take. And I think that the direction of travel in this area is sort of undeniable and this technology, it will be in clinic at sort of a standard of care in the future.

Yes, exactly. You've spoken about functional precision oncology being at an inflection point. Where would you say we are in terms of adoption and industry momentum?

Well, I think if we look at genomics as sort of the benchmark and really, genomics is now very much mainstream. There were some very large acquisitions that happened in that space. And what we did is we plotted the number of clinical trials that are happening in the area, and we analyzed it against what happened in genomics. So I think last year, there was around 45 clinical trials using organoids and chemotherapy, which puts it in the same sort of time as genomics around 2017, 2018. So I think we're still early, but the number of clinical trials on the graph, it's very interesting to see, I mean, it's just growing exponentially. And I think once we get to 65 clinical trials in this area, that is really an inflection point where we'll have sort of in-clinic adoption for this technology globally, I would say.

We will soon move on to how you get really individual level. But first, how do you assess the competition in the space?

Well, I think, if you look at it like this, if you say there's 20 million new patients a year or a new diagnosis of cancer, take colorectal cancer...

Is this in Europe or...

Globally.

Globally.

Colorectal cancer, there's about 2 million from previous data. Over half of those are taking standard of care with no additional routine tests. So that's no genomics testing. That's no additional profiling of the tumor. So I don't really see there being any competition from the perspective of who are we competing against. There is not only enough space for a lot of players in this market, but there's clearly a ginormous gap in what patients are getting. So I think until this is being used as standard, there is no competition. I don't think it's the right way of sort of looking at it. In fact, in many ways, I've reached out to a lot of the competitors in this area because I think that we see a lot of fragmentation, industry fragmentation, people doing it in different ways, how you're taking the biopsy, the procedure in which you're growing the organoid or the tumoroid. And I'd like to see the competition coming together a bit more to establish a sort of a gold standard, which is what we see in other industries. So at the moment, I think, we seek partners, and, I think, we'd encourage anyone to reach out to try and partner with us to see how we can bring better care to patients in clinics.

Okay. And what are the risks in this area? What do you say?

Well, I think industry fragmentation is one. I think you look at this from a risk -- from different perspectives, right? I mean, so what are the company risks? What's the chances of us being an industry leader? I think that the first in the industry or the largest player in the industry is definitely going to -- the Pareto principle applies to most things. So that's a big risk for us. I mean, how do we ensure that we are the dominant player and the market leader. And I think that that's really how we execute, right, how we bring this technology forward, how we partner. But I think from a technology perspective, what I -- one of the things of why we say this is very much med tech rather than biotech is because we're not trying to create a new compound. We're not trying to create a cure for cancer. What we're saying is that there's 320 drugs out there, and you should just take the right one because the reality is that it's probably out there already. I mean, of course, there are other risks, new technology coming in. I mean, immuno-oncology seems very effective in situations. I mean -- and I think that there's a larger sort of ecosystem within chemotherapy, and within cancer in general, right? I mean, because chemotherapy is not the only way that you treat cancer. There's radiotherapy and there's surgery as well. So I think that we're really focusing in on a specific area. And from a risk perspective, I don't see there as being a risk in the sense that I am absolutely convinced that this will be used in first-line treatment as a decision-making tool in the future. And that's validated by the clinical trials in this space that are happening.

And you spoke earlier about direct to patient. What does this actually mean?

So it really comes back to the stem cell harvesting that I did with my children. This was -- I think most people don't know that this technology is out there or they assume that the oncologist is doing it or the hospital is doing it. I think that -- I guess, taking a step back to risks, I think a big risk at the moment is education, right? I mean people don't know that, a, this exists; and b, that it's not done as routine. So I think that I've certainly made it my mission, and it's what 2cureX will do, that people should be able to buy this directly to either run the tests, to be able to provide these reports to oncologists for them to make a more informed decision. So I think we're really working in partnership with the oncologists and with the key opinion leaders to make sure that oncologists are making better decisions.

Is that one of your -- part of your strategy, to reach key opinion leaders and thought...

Yes. I think certainly. I mean, it's interesting. In Denmark, for example, which I was looking at the other day, in Eastern Denmark, the standard of care for colorectal cancer, they use FOLFOX, which is a particular chemotherapy; whereas in Western Germany, they use FOLFIRI.

In Denmark, yes.

Sorry, in Denmark, yes. The guidelines allow them to use one drug or the other. Yes, if we're able to run the IndiTreat test, and we've proven within a European clinical trial efficacy and patient survival and that it's a significant step above standard of care, then I think that not only the key opinion leaders, but also the oncologists welcome this type of information because it allows them to make a much more informed decision because they are quite often left with a choice of whether to go left or right.

And sort of guess.

Exactly. Yes. And so this is part of that change.

Okay. And what about other new technologies?

Yes. So we were talking earlier before the camera started about this, is it human nature to want to find a sort of a silver bullet, some sort of magical cure. I mean I think that the reality is that cancer is an incredibly -- I mean it's incredibly resilient. And I think that having one shoe fits all is just simply never going to be the solution. I mean we know -- if we talk with other technologies, we know in genomics that there are specific biomarkers that people have where they will respond incredibly well to a particular drug. And so I think that -- again, it's AI, I think, which perhaps we will come on to -- this large ability to simulate huge data sets will give us the ability to basically categorize people into smaller subsets. And once you can get people into smaller subsets, you should be able to make a more effective treatment decision. That being said, this is still part of that process. And so I think having more tests as standard of care, whether that's profiling or genomics, I mean, that's what we believe is the future and what we think 2cureX' mission is.

Okay. And you touched upon AI. What else will AI bring to the solution here?

I think there's this idea of a digital twin, of not just the physical twin, because we call them twins -- avatars is a name. But to be able to simulate different options using AI is certainly part of the future. And there's a huge amount of investment in there. I mean I think what's interesting is that if -- whether it's using viruses or bacteria, this is very much the standard of care. This technology or this concept is the standard of care. It was used during the development of the COVID vaccines. You take a virus or bacteria, you replicate it and you test various different options on it. I mean whatever happens in the future, this is coming to chemotherapy, and this is coming to this area. So I think it's very exciting for us being very much the leaders in Europe at the moment in that area.

Okay. Thank you. We will move on to a recent news from the company that is -- or actually, I'll ask it like this. What can you tell us about regarding the news that PreComb Therapeutics AG based in Switzerland and 2cureX, you have signed a letter of intent. What is this about?

Yes. I think, again, it's part of a broader strategy to make sure that the entire industry is working together because we are working together towards a common goal. I think what PreComb is doing at the moment is there also seems to be in this industry specifically two sort of schools of thought, whether you're coming after the process of a biopsy, are you grinding the tissue down to a single cell and then exposing chemotherapy from a single cell perspective; or are you using shards, which -- these are sort of 2 schools of thought. And we spoke earlier about the gold standard. In the future, a single standard will be used because that's what we see happening previously. So I think not only is this about future-proofing, but it's also really establishing that there are multiple commercial avenues for this technology, whether that's in drug discovery and pharma services, where PreComb is very much taking the lead; whether that's direct to patients, so selling these tests and making it available directly to individuals; or whether that's in clinic through public health services. And so I think it's important to have a multiple strategy across all of those areas, whilst obviously maintaining focus on what you're doing.

Interesting. And according to you, why is 2cureX a good investment?

Well, I read it's got the best interim CEO in the world. Look, I think the direction of travel of this industry is undeniable. And at the moment, 2cureX is very much, from a public perspective, the best way to get exposure in this area. I think that whether it's with key opinion leaders with members of parliament or with inside the industry, I mean, we're seeing acquisitions in the space. There was an acquisition of a partner or a competitor of ours called SEngine by a company called Tempus that happened last year. Merck has recently acquired a company in Germany, which is called HUB Therapeutics (sic) [ HUB Organoids ]. And so the direction of travel of the industry is secure. We're seeing majors making acquisitions in the space and us also making some big strides. So I think that wherever you invest in this area, it's a good place for placing money at the moment.

Thank you, Nat. And we will open up for questions from the chat and also the previously announced e-mail address, and I will start to pick a few questions from there. What are your thoughts on the long-term future in this field?

I think long-term future, and I think it's difficult to give specific times. There is no doubt in my mind that this will be used as a diagnostics tool in clinic globally as standard of care at some point in the future. Now the key is we want to make sure that it's replicable, that you can replicate it and that you have no errors across that process. So robotics plays a very important part in this, being able to do it at scale at a cost that's affordable either directly to patients, but also more importantly, for the taxpayer who's funding the public health services. I mean we hear these stories of these amazing treatments that cost a huge amount of money and therefore, makes it very difficult. So I think the long-term future of this is very bright, and we're going to -- we aim to be a major part of it.

Yes. And we can see that a lot of other treatments, not only cancer, that is getting personalized.

Yes. Yes, in immuno-oncology, which is great. But I think certainly from PreComb's perspective, using this technology to test and to run these same assays with immuno-oncology is essential for not just creating these drugs, but also making sure that you're making the right ones. So whatever part of it this robotics play using organoids to expose them to different compounds will be standard of care.

Thank you. And there is now a question in the live chat. Are there other tests in the market like 2cureX?

So at the moment, the only one with regulatory approval is IndiTreat. There are...

That is your test...

Yes. So there are some lab-developed tests. And I think if you're doing this through private health care and you're spending a huge amount of money, then this process of growing the tissue and exposing them to chemotherapies is part of their treatment decision-making. I think that often, doing it in a manual process makes it prone to human error. It's very complicated and very difficult to do, which is why I think that the group of patent families that exists around this makes it very defensible from that perspective because robotics is really a key part in being able to do this.

Okay. What milestones should investors look out for during 2025?

Well, I think we've got a very, very exciting year ahead of us. We've got a pretty clear road map, and they should look out carefully on the notice boards and through our socials. I think I aim to, during my time here, have a very direct dialogue with the shareholders because I think it's important to do that. We're going to trial some very interesting concepts. We recently launched this idea of a health dividend, so essentially, our shareholders being able to benefit directly from the tests that we have at the moment and the tests that we will have in the future. I think this is a very interesting concept. And I think that really working closely with the shareholders and within that group is going to be part of -- very much part of our strategy. So we want to be very close to them and have an open dialogue.

And there's another question from a viewer here. Does the merger, I'm not sure if it is a merger, mean that PreComb can access the IndiTreat patented testing format?

So at the moment, 2cureX AB has signed a letter of intent with PreComb, and that is -- that's all we've done at this stage. Yes.

Okay. And there's another question. After selling 2cureX, where their fundamental know-how resides, what is the short- to medium-term revenue development plans of 2cureX AB?

So I think, again, it's important that we communicate with the market in a compliant fashion. And so we have -- we're very optimistic about what we're going to do in the future, but there's limited information that I can share in a public format. I think from a medium- to long-term perspective, the market opportunity here, and it's difficult to express it like that because ultimately, we're selling to patients with cancer or we're selling to institutions. But the size of the opportunity is massive. So I think we have -- I would say that I've got all of the ingredients. And what we have at the moment is a collection of the best assets in Europe to dominate in this space. And so we need to just make sure that we execute on that. It's about execution now. So I look forward to sharing the results in the future.

Okay. Thank you so much. Thank you for watching this show. And thank you, Nat Hutley, CEO of 2cureX for joining us.

Thank you very much.