Avacta Group Plc (AVCT) Earnings Call Transcript & Summary

Welcome to the Avacta Group webinar, which has been facilitated by Turner Pope Investments, which provides corporate broking services to listed companies, as well as providing investment services to high-net-worth private investors and family offices. Today, the CEO and Founder of Avacta Group, Alastair Smith, is with us presenting. And before I hand over to you, I'd like to let our audience know that immediately after the presentation, the investor Q&A will take place, and that's when I'm asking your questions that have been sent in to us. So, do stay with us for that. But for now, Alastair, it's over to you.

Thanks, Katie, and thanks, everyone, for making the time to listen to this update of the AVA6000 Phase I clinical trial, based on the poster we just presented in San Diego at the 2024 AACR Meeting. Okay. So first, just one introductory slide for those of you who aren't as familiar with Avacta and the pre|CISION platform as many. So the goal for many oncology companies is to improve the targeting of therapies to the tumor, and that's because traditional cancer therapies don't differentiate between normal tissue and tumor tissue. So the systemic toxicities that you get really limit the effectiveness of most of these oncology drugs. So there's an urgent unmet need for medicines that selectively kill tumor cells and spare healthy tissue. And our solution to that, the pre|CISION platform, pre|CISION drug conjugates, is a platform that links a cleavable peptide to the chemotherapy that creates a peptide drug conjugate that's effectively inert, can't get into cells. But that peptide that we've added is removed by an enzyme in the tumor tissue, which concentrates the release of that chemotherapy in the tumor microenvironment. So pre|CISION medicines are designed to, and we'll see from the data as we go through the presentation, they are reducing systemic exposure, targeting the chemotherapy to the tumor and enhancing safety and tolerability, and therefore, increasing the efficacy. Okay. So let's get into the update on the data emerging from the ongoing Phase I study. Okay. Just to run through the mechanism of action of pre|CISION and AVA6000 in particular, which is a pre|CISION peptide drug conjugate of the well-established chemotherapy, doxorubicin. So the mechanism depends, as I mentioned, on an enzyme called FAP, which is at elevated levels in many solid tumors compared with healthy tissues. And AVA6000 is a modified form -- a pre|CISION modified form of doxorubicin, so modified with a small peptide that prevents AVA6000 from getting into cells. So it's effectively inert. And then, that pre|CISION peptide is unique in that it's recognized by FAP in the tumor tissue and only FAP, and it's removed, therefore, releasing the active drug, which, as I say, in this case, it's doxorubicin. Because FAP is found predominantly in the tumor tissue and not in healthy tissue, the release of doxorubicin, which, as a released drug, can get into cells and kill them, that release is predominantly in the tumor. So pre|CISION provides a true tumor-targeting mechanism. So the Phase I trial design is a standard, what we call, a 3+3 dose escalation study. And the data presented at AACR have been collected in Arm 1, which is a 3-weekly dosing study up to the 11th of March this year, 2024, and come from a total of 42 patients. So, as many of you will be aware, no maximum tolerated dose was reached in that 3-weekly study, despite in the seventh cohort reaching doses of approximately 3.5x the normal dose of standard doxorubicin. So we'll obviously talk through the data in detail in a moment, but the overall observations are a remarkable improvement in the safety of AVA6000 compared with doxorubicin in that 3- weekly study. And that's allowed us to move to a more frequent dosing schedule of 2-weekly, something that isn't possible with standard doxorubicin. So we've now dosed in Arm 2, the first 3 patients in that first cohort. And the Safety Data Monitoring Committee will shortly review the data from that first cohort in those 3 patients. I've been through the Phase I study demographics before, so I'm not going to labor this slide, but suffice it to say that it's a pretty typical Phase I study population. The patients have been heavily pre-treated. You can see in the bottom right of the slide that the average number of prior therapies is 3 and the range up to 7. So there's also a range of different indications, many of which are known to not be responsive to doxorubicin as a monotherapy, which is obviously going to be relevant when we talk about the responses that we have observed later in the presentation. So, a pretty standard Phase I study patient population. So the safety data that we've continued to gather just served to reinforce the analysis that we presented back in December last year, December 2023. So I know that Chris has talked through the tables of safety data. So I've just summarized them here so we can get on to other data. And the safety data are very much explanatory -- self-explanatory. So you can grab the poster from our website or with the QR code that will come up at the end of this presentation. And what we're seeing, in summary, is a remarkable improvement in the safety and tolerability of AVA6000 compared with standard doxorubicin. Now, specifically, there is a significant reduction in the severe toxicity, so that the grade 3 and grade 4 toxicities such as neutropenia, that limit the way in which doxorubicin can be used. The implications of that reduction, that improvement in safety is that we can consider optimizing the dosing to more frequent or higher doses, and that gives us the scope, obviously, to improve the efficacy and the outcomes for patients and basically make doxorubicin a better drug. So there's also been a reduction in almost all of the mild to medium toxicities that affect patients' quality of life whilst on doxorubicin treatment, and some of those side effects really do affect patients' lives very negatively. And I think Professor Banerji's comment there says it all, really kinder, yet still effective. And in fact, we're aiming for kinder and more effective, of course. So you'll see on the poster that a couple of dose-limiting toxicities occurred in earlier cohorts. And when those cohorts were expanded, which obviously is exactly how a 3+3 design is intended to work, those DLTs were not repeated, and so the dose was deemed safe. And finally, just to repeat that we saw no maximum tolerated dose in the 3-weekly study. So, as I said, in summary -- and you can go to the poster to look at the detail, but in summary, a remarkable, a very clear improvement in the safety and tolerability compared with doxorubicin. Okay. So let's focus now on some of the new data that have not been presented before. So, first, I'd like to talk through the case study that we mentioned back in December. This is a 60-year-old male patient with grade 3 undifferentiated pleomorphic sarcoma. The patient has had the primary tumor removed, and following a Stage 4 diagnosis about 2 years ago, received an immunotherapy combination on a trial during 2022 and 2023. And he entered the AVA6000 trial with his disease progressing, which means that the tumors were growing. So, the CAT scans on the slide show 5 different lesions in the lung. And there's a baseline scan, so when the patient entered the trial from February 2023, and that's compared with the most recent scan in January 2024. So the lesion is highlighted in each scan, in the baseline scan with an orange circle, in the more recent scan with an orange dashed circle. So you can see there's a near complete reduction in these metastases in the lung, in fact, a 70% reduction and ongoing with more than 6 months duration of response, which means that, that reduction in size has lasted for more than 6 months since it was first observed. So it's a really great result for all concerned, of course, and this patient remains on the study and can be treated for many more months because of the reduced systemic exposure to doxorubicin that comes from the ability of pre|CISION to target the drug to the tumor. Okay. So let's take a step back and go from a single case study to the data for all patients with FAP high tumors. So this figure, which we call a waterfall plot, shows the tumor reduction on the right-hand side or the growth on the left-hand side for all of these patients. And there are 2 clear, what we call, partial responses in the undifferentiated pleomorphic sarcoma patient we just talked about, and the salivary gland -- a salivary gland carcinoma patient of 74% and 57%, respectively. So there are 3 -- there are also 3 minor responses in soft tissue sarcomas. And just a word to say, you shouldn't let the words partial or minor suggest a poor result. These are just the formal classifications for tumor reductions of 30% or more. That's a partial response. So both of those 74%, 57% are, what I call, partial responses, where a minor response is between 10% and 29%. So, a complete response, obviously, would be a 100% reduction. So these are just the ways in which the different degrees of tumor shrinkage are referred to. And the asterisks show patients that are still ongoing on the trial, and that means the data will likely improve for those patients over time as well. So, in the case of lower FAP tumors, we can see there are fewer responses. And that's mainly due to the fact that all of these indications, pancreatic, colorectal, ovarian and so on, are known not to be responsive to single-agent doxorubicin treatment in general. But clearly, the level of FAP expression and the sensitivity to doxorubicin are both going to have an effect on the response. So we can summarize all of these response data in, what we call, a best overall response table and produce a disease control rate, which is defined by the RECIST criteria. So, just to comment before someone suggests that the numbers in the table are wrong, the way the RECIST criteria work, which I don't really have time to go into now, creates effectively some double counting. So essentially, what we do is, we take the partial responses, minor responses, stable disease more than 16 weeks, and express that as a ratio or percentage of the total number of patients. We can see that in high FAP indications, 10 out of 15 patients show disease control, 67%, whereas 37% in FAP low, FAP mid indications. Well, as you'll appreciate by now, the remarkable property of pre|CISION is the fact that it is a tumor-specific release of the warhead. And we've got a growing body of data now showing that explicitly for AVA6000. So Figure 5 on the poster shows the doxorubicin concentration measured in tumor biopsies, 11 biopsies from 10 patients, compared with the amount of doxorubicin measured in the blood stream plasma at the same time point. And we've split this up in Figure 5 into FAP high indications tumors, which is the red dots, and lower FAP, FAP mid indications, which are the black dots. And it's shown on a log scale. So just to point that out, so you can see that there is 10x to 100x more doxorubicin in the tumor biopsies than in the bloodstream across these patients. I think it's important also to note that we're seeing release of the doxorubicin in the tumor, the black dots, even in the FAP mid, the lower FAP indications, which goes back to my point about lack of response in these patients, probably due to the lack of activity of single-agent doxorubicin in those tumor types. But we are seeing comparable levels of release in lower FAP tumors, as well as the higher FAP tumors. So Figure 6 further reinforces that critical point that we have, with pre|CISION, got a tumor-specific release mechanism. And Figure 6 shows the amount of doxorubicin in blood, taken from the total area under the pharmacokinetic curve, so the total exposure, so the amount of doxorubicin measured in the blood over time in a number of patients. And each of those patients had pharmacokinetic curves generated for both cycles 1 and cycle 2 of treatment. And along the X axis, the horizontal axis, is the activity of the free FAP in blood. So, remember, there's a small amount of FAP free in the bloodstream, whereas it's predominantly on the surface of cells in the tumor microenvironment, of course. So if the FAP in the bloodstream, that free FAP, was releasing doxorubicin from AVA6000 to any significant level, then you would expect to see more DOX in the bloodstream, the more activity you have, i.e., you'd expect to see those dots form a roughly diagonal line going upwards towards the right. But there is no correlation at all, which means that free FAP is not releasing the warhead significantly in the bloodstream, which obviously contributes to the safety profile that we're seeing. Okay. So Figure 7 is a -- it's a complex figure, I appreciate, but an important one. So let me go through it slowly. So, firstly, what it tells us is that there's a clear dose window in which we're seeing responses, i.e., tumors shrinking, but we're not seeing severe grade 3 and 4 toxicities, neutropenia in this case, which limits the dosing frequency. So the responses, partial response, minor response or stable disease more than 16 weeks, or a lack of a response are plotted for each patient in blue circles with a 1 for a response and a 0 for no response. And those are plotted for each patient as a function of the measured total exposure of the patient to doxorubicin in the bloodstream, i.e., what we call the AUC, the area under the curve. So the blue circles are, do we see a response or do we not see a response as a function of the total exposure of the patient to DOX in the bloodstream? Next, you can see the incidence of severe neutropenia or not, plotted in the same way as a function of the area under the curve for each patient in red. Then we take a statistical approach called a logistic regression, which is used to turn that binary information, response/no response, severe toxicity/no severe toxicity. It turns that binary data into a probability curve. So that's the blue curve for the likelihood of getting a tumor response, and the red curve for the likelihood of severe neutropenia. And we can see that the blue curve sits above the red curve, i.e., you're more likely to get a response than a severe case of neutropenia for much of the dosing range, and particularly at the lower doses, where we've seen the responses in the trial. So you can see from the -- you can see the exposure from standard doxorubicin, the black dotted lines, and an exposure where the likelihood of severe neutropenia is about the same as the likelihood of a response. So what this analysis shows unequivocally is that we've significantly improved that, what we call, therapeutic window, the therapeutic index for doxorubicin. And finally, many people have asked about the PK data. So it's summarized here from the poster. The different dose cohorts in the 3-weekly study are shown down the left-hand side with the doxorubicin equivalent dose in the next column. What we call the Cmax, you'll recall, is the maximum amount of doxorubicin detected, the peak level of doxorubicin detected in the blood stream, arising from AVA6000 dosing. And the AUC, or the area under the curve, over time, tells us about the total exposure of the patient to DOX. So the 2 key columns really are those on the right. And you can see that the maximum concentration, that Cmax, is -- that's measured in the blood stream is significantly reduced, 90% -- 77% to 92% reduction compared to standard dose doxorubicin. So patients are experiencing a considerably significantly reduced peak exposure to doxorubicin in the bloodstream. And some toxicities are related to that maximum exposure. So a 90% reduction explains why the safety is improved so dramatically by the targeting to the tumor. And the area under the curve, which is the total exposure over time, shows a similar 70% reduction at the lower doses, but it becomes more similar to standard doxorubicin exposure at the higher doses. Last slide, and this slide isn't on the poster, but I wanted to take the opportunity to talk through the way in which we see the pre|CISION pipeline developing beyond AVA6000. So AVA6000 is an example of a pre|CISION peptide drug conjugate. That is a warhead modified with the pre|CISION peptide, which targets its release to the tumor, as we've seen. So there's numerous possibilities to take other cytotoxic warheads forward. And many of you will be aware of AVA3996, but there's also other opportunities, more potent warheads in the pipeline as well, and we'll speak about those in more detail as soon as we're able. Now, any small molecule drug is going to be cleared relatively quickly from the bloodstream, and it might be desirable to have a longer serum half-life, and that's achievable with what we refer to as pre|CISION+. And a pre|CISION+ tumor-targeted drug is conjugated to a portion of an antibody called an Fc or to the AffimerXT half-life extension system. And both of those have the potential to increase the half-life, the serum half-life from hours to days, which could significantly increase the effectiveness of a warhead such as an immune modulator. And many of you will know that there's a huge amount of interest in antibody drug conjugates, which attempt to target the tumor using an antibody to a tumor-specific antigen. And those of you who have been involved with Avacta for a while will be aware that the pre|CISION version of that concept, a tumor microenvironment activated drug conjugate, which not only uses an antibody or an Affimer to target the tumor, but ensures the warhead can only be released in FAP-rich tissue. That is a drug modality that we're very keen on developing. And that is a drug conjugate, which does not need to be internalized into the cancer cell as with traditional drug conjugates. So it maximizes what we call the bystander effect. So I think you'll agree that there's a huge scope and opportunity for us to make a real difference to the treatment of cancer, to generate significant upside for our shareholders with the pre|CISION pipeline. So it just remains to run through the summary. So the combined data to date from the AVA6000 clinical trial unequivocally show that pre|CISION is a true tumor-targeting platform. AVA6000 targets the release of doxorubicin to the FAP-rich tumor tissue, and the result of that is improved safety and clear responses in anthracycline-sensitive tumors. So that is clinical proof of concept for AVA6000 and pre|CISION. The PK data obviously support the concept of more frequent dosing, which we're now exploring in the 2-weekly dose escalation study, and that is on schedule. So we expect to complete that around the middle of the year, allowing us to begin the efficacy expansion cohorts in the second half of the year. So thank you very much for your attention. And obviously, I'll be very happy to answer any questions.

Okay. Thank you very much, Alastair. So we're going to get started with these questions. Some of them that were similar in topic and subject, we've grouped together, but hopefully, they'll all get answered. And I know, Alastair, you've got something to say about some of the questions that were submitted in regards to the placing.

Yes. Thanks, Katie. There's been a lot of questions regarding the recent placing, and it'd be silly not to acknowledge that. So most of the audience will be aware that because we marketed the placing in the U.S., there are restrictions placed on us. So we're not able to have a detailed discussion about the placing today. But those restrictions will lift before the preliminary results at the end of April, and then we'll be able to answer the questions. So what I can say is that we've brought a number of high-quality institutional investors onto the register, including a large European healthcare specialist. And we've got a long cash runway now, which puts us in a position of great strength in any future commercial discussions and, of course, allows us to hit some key development milestones and add value through AVA6000 and the pre|CISION pipeline. So we'll focus on 6000, pre|CISION and the data that we just talked through. It's the purpose of today's webinar, but the preliminary results are coming up in a couple of weeks, so then we can have a chat through other topics.

Okay. We'll look forward to that and to hearing more detail on that, as you say. All right. Well, let's get stuck in, shall we? So the first investor is asking today, does Avacta's objective remain that Phase II will serve as a registrational trial?

Yes. In an ideal world, the strategy is to pursue a single-arm Phase II trial in an indication with a high unmet need. So that could ultimately serve as one of the 2 registrational trials that's needed for approval. When I say 2 registrational trials, just to remind everyone that a Phase III study also has to have begun in order to get the approval, following a single-arm Phase II study in the U.S. And the exact clinical development strategy is going to be defined based on the efficacy and the safety data that we're continuing to obtain now and we'll obtain in the expansion cohort. So, that will all begin in the second half of the year. So, that strategy, a single-arm Phase II, is our preference and is very likely, but we'll only be able to confirm that when we've got the data from the expansion cohorts. And just thinking back to the poster, the data we just presented, we should add that the clinical activity that we're already seeing in the Phase I study in certain orphan indications that we've literally just talked through gives us a really clear clinical proof of concept for AVA6000. So our confidence in the upcoming efficacy studies is very high.

All right. The second one is a bit longer. So is the company's small size discouraging potential institutional investors? Is there a concern that valuable scientific data might be overlooked if primarily private investors are involved, making it challenging for institutional investors to establish significant positions?

No. I don't see any evidence that the size of the company is discouraging institutional investors. In fact, we've just talked about bringing in a number of high-quality institutional investors onto the register. So specialist healthcare investors are really important to us all going forward because they've got the capacity to support biotech companies over the long term to the really, really major value inflection points. And the most important things to those investors are clinical data and a differentiated pipeline. So we're now generating very solid clinical data, as you've seen. We've got an exciting pipeline to follow on, which we'll be able to talk about shortly. But private investors are -- they're a very important group, not least because they provide liquidity. And I really don't think that the value of the data being generated is lost on private investors. Many of those investors do a lot of research, more than some institutions, to be frank, in order to understand the value proposition and the scale of the upside in Avacta.

Yes. This next person is asking, whilst appreciating commercial deals are complex and take time, could Avacta confirm whether it has sufficient data set to partner pre|CISION now? If it doesn't, what additional data is required to partner the substrate?

Yes, I can absolutely confirm that we've got sufficient data now to partner the pre|CISION platform. But let me expand on that a little bit. So, clinical data is absolutely key to deals and deal value. So we've now got very clear, irrefutable clinical evidence that the platform selectively targets a warhead to the tumor tissue, and that leads, obviously, to the improved safety and the signs of efficacy we just talked through. So, a couple of things are critical to us in the commercial partnering process. And one is obviously continuing to build that body of data, and the second is to be in a strong negotiating position with a long cash runway, which we also now have. So in terms of strategy, we want to retain as much as we can right now because we know how valuable the pre|CISION platform is. So doing small, quick deals is not attractive, nor sensible. So care needs to be taken right now to do the right deals with the right partners, obviously. Otherwise, we actually risk reducing the value of the commercial opportunities. For example, we don't want to do deals that cut across our own pipeline strategy. And that goes back to the point I just made about retaining as much of the value as possible for as long as possible. And we don't want to do small deals, which are easy to do, of course, but you could carve out a portion of what a large pharmaceutical partner of the right caliber might be interested in. So our intention is to exploit pre|CISION to the maximum possible benefit for the company, patient, shareholders. So doing the right deal or deals with large pharmaceutical partners requires some care and some time. But you shouldn't see that as a reflection of any question marks at all about the pre|CISION platform. It's a reflection of us taking the right approach to deal-making at this stage.

Okay. The next one is quite simple. What is the longest a single patient has been on drug to date?

Well, as you can see from the poster, the patient with the first partial response, a patient with undifferentiated pleomorphic sarcoma, had the first baseline scan in February 2023, last year. That's when he started on the trial. And the latest follow-up scan was in January 2024. That patient is still on the trial. So, that patient is probably the longest on trial, has obviously been on trial for well over a year now with a reduction in tumor size of more than 70% and very much reduced side effects over that more than a year period, whilst he has been on the study. So, that patient can also continue to be treated because of the low systemic exposure that, that patient is receiving to doxorubicin. So we know that from the PK measurements. And that's precisely what pre|CISION was designed to achieve.

Excellent. All right then. The next one has various components. I'll just take my time with this one. Has Avacta undertaken any additional work to estimate the sales of AVA6000, given now its proven safety profile? If so, what does this show? In addition, could Avacta explain how the platform, which sits behind a pipeline of drugs, will be valued? And what precedent is there for applying metrics to value a novel platform? Will Avacta seek any independent advice to assist with this valuation? And if so, when will this be undertaken?

That's not a question. That's lots of questions, and that's fine. Okay. So let me pick those off. We have been and continuing to work with third-party specialists to identify the patient populations for AVA6000. And from those patient populations, we can then choose which indications to go into in the expansion cohorts, and ultimately, the Phase II study. Now, clearly, until we select those indications, it's premature to do much more work on commercial market size, particularly given that that's a fairly expensive activity with third-party consultants. So a little -- we have done some of that work. We've already begun that process, but we will do a lot more once we actually define the expansion phase indications. And those indications are likely to be orphan diseases, as we've said before, because those are tractable for a biotech. And there will be others that are more suitable perhaps for partnering with a larger, better resource partner. But orphan indications shouldn't be dismissed from a commercial perspective. Biotechs with orphan indications can be extremely successful. One example -- a good example is the company that Eliot led, which is Immunocore. Immunocore now has a drug -- a single drug approved in a small orphan indication called uveal melanoma, and that drug generates $250 million a year, which is reasonably typical for an orphan indication, if you want a ballpark figure. And Immunocore's NASDAQ market cap now is $3.1 billion. So our focus now is on orphan indications that provide an efficient development pathway for us and then partnering with the right partner to accelerate progress. So in terms of -- I think the second part of the question was about valuing novel platforms. I personally think that the most sensible approach is to look at comparators. I'm not a big believer in discounted numerical models. So look at comparators, whether those are public companies or maybe recently acquired companies. Immunocore's example I've just given, of course, it's a commercial stage comparator with a single approved drug, so further ahead than we are. We are clearly positioning ourselves within the drug conjugate space because we have a -- pre|CISION is a truly tumor-specific targeting mechanism. So thinking about that -- to begin with, when you're thinking about comparators, think about the drug conjugate space. And even if we ignore the value of the platform, companies with exciting assets in the drug conjugate space are highly valued. So other examples I would give, again, commercial stage, Pfizer took over Seagen recently for $43 billion. AbbVie acquired ImmunoGen for $10 billion. I'd say those are commercial stage businesses. But another probably directly comparable example now is Johnson & Johnson's acquisition of Ambrx for $2 billion, which happened just a few weeks ago. And one sort of final comment to think about when we, you are thinking about the valuation of Avacta, the pipeline is absolutely key, not just the fact that pre|CISION is a platform. It's what you do with the platform that really matters. And now that pre|CISION is proven in the clinic to deliver a warhead to the tumor, it's critically important that we select the right targets and the strategies for the pipeline because that's going to drive valuation. I've introduced some of the concepts today in the presentation, and we'll be talking a lot more about the detail very soon.

All right then. So this next person wants to know, are responses across cohorts in the AVA6000 trial consistent? And is there a correlation between plasma doxorubicin levels and AVA6000 dose or FAP expression?

Okay. So the safety data are very consistent across cohorts, as we've seen from the data today. The responses, i.e., the tumor shrinkage, are dependent on the indication because some of the indications in the Phase I study are not sensitive to doxorubicin. That's not how the patients are selected. And there's been a broad range of indications included in the Phase I study to date. So we can also see from the data that high FAP activity and anthracycline-sensitive doxorubicin sensitivity is correlated with the responses, and that's the data that we saw in the waterfall plot in Figure 4. So the second part of the question was about plasma doxorubicin levels. And the pharmacokinetic data show that there is a broad correlation between AVA6000 dose and plasma -- blood plasma doxorubicin levels. But it's worth reiterating that the -- Cmax, that maximum value of doxorubicin released in or measured in the bloodstream is dramatically reduced compared with standard DOX. And only at the higher doses of AVA6000 does the overall exposure approach that you would see with doxorubicin. But if the question is referring to plasma FAP levels rather than tumor FAP levels, because I think we've seen from the data that the doxorubicin seen in the blood is really being released in the tumor, but if we're thinking about plasma FAP levels because there is pre FAP in blood, a small amount of it, and Figure 6 on the poster shows that there's actually no correlation between that plasma FAP activity and the plasma doxorubicin exposure, which is a really important finding and tells us that we're not seeing significant release of doxorubicin by that free FAP in the bloodstream.

Okay. And this next one has various elements as well. So I'll break this down. Actually mentions the conjugate as well that you mentioned just a second ago. Okay. What specific elements of the data set are clearly demonstrating that pre|CISION peptide drug conjugate platform is functioning in the way that it was designed? How has this belief been further reinforced over the past 9 months plus, leading you to state pre|CISION is addressing the Holy Grail of oncology?

Okay. So in the Phase I data that we've just presented, and that really covers the last 9 to 12 months or so, there are, I guess, 4 key elements that show exactly that. So AVA6000, clearly from the data, concentrates the warhead, which is doxorubicin in this case, in the tumor microenvironment. We see that from the biopsies. And there's no evidence for any significant cleavage in the blood. We just talked about that. The second point is that the concentration of doxorubicin in the tumor microenvironment clearly translates into clinical responses, i.e., tumor shrinking in patients that have high FAP [ indication ] and are known to be sensitive to the doxorubicin mechanism of action. The third point is that, that concentration of DOX in the tumor also translates into a really dramatic reduction in the severe toxicities and a reduction overall in the toxicities that we see, and the fact that there's been no maximum tolerated dose in the 3-weekly study determined to date. And then, I guess, the fourth point to make is that if you cast your minds back to Figure 7, there's a very, very clear separation between those doses at which toxicities -- and in this case, we were looking at neutropenia, those doses at which the toxicities begin to appear compared to the doses where we're starting to see tumor shrink. And there's a window there. And we've shown that pre|CISION has significantly changed that therapeutic window of doxorubicin, potentially making it a better drug. So targeting tumor tissue, so targeting the drug to tumor tissue is a Holy Grail of cancer therapy. I don't really know any other way to put it. And what that means is delivering potent anticancer therapies to the tumor, sparing healthy tissues. That's critical to the next generation of cancer treatments. And as far as I'm aware, to the best of my knowledge, we have a unique tumor-specific release mechanism in pre|CISION.

All right. And this one is quite short. Will all dose expansion arms be for orphan indications?

Yes. I don't think -- we've probably covered that to some extent already. But we've not disclosed the selected indications for AVA6000 expansion cohorts yet because what we want to do is get more data in the 2-weekly dose escalation study, which is ongoing, should finish around the middle of the year, and that will help inform the choice of those indications. But as soon as we're able, we'll talk through what indications are chosen. I can tell you that at least one of those will be an orphan indication.

All right. Has pre|CISION been successfully conjugated with any of the next-generation highly toxic warheads in the lab?

Okay. So I need to be a little bit careful in answering that because I don't want to create any sort of IP issues. We've not yet disclosed the full pipeline, but that's been obviously a topic of intense work over the past year or so internally. And I've spoken about looking at more novel and more potent warheads publicly in the past. So that's not a secret. We've also recently updated the website. And I've spoken just now in the presentation about how we see, I guess, the shape of that pipeline developing with pre|CISION targeted cytotoxics like AVA6000, pre|CISION+, where the warheads could be an immune modulator, for example, pre|CISION antibody or Affimer drug conjugates. So doxorubicin is not a particularly potent warhead. So AVA6000, the reason we chose that was because it was the most advanced program in Tufts University when we licensed the pre|CISION platform. So it made a lot of sense to get that molecule into the clinic and get human proof of concept as quickly as possible, which we now have done. So, now that that's very clearly demonstrated, the simple answer is, yes. We are working on more potent warheads and more novel drug modalities, and we're going to share the detail of that pipeline, which to say again, is a key value driver. And we'll share that as soon as we've gathered enough data and got our IP filings in place.

Okay. This person's question is staying with doxorubicin, actually. So Avacta initially intended to utilize a straight doxorubicin comparison arm in Phase II. Could you confirm why Avacta no longer intends a doxorubicin comparison arm? And if so, where the comparative data will come from?

Yes. So, just to reiterate that the clinical development strategy, including that final trial design, which is what we're talking about, is dependent upon the indication that we choose. So we can only really confirm that and talk about it when we know what that indication is. But the ideal approach is a single-arm Phase II study. And currently, what's called real-world evidence is often used to contextualize the results in a Phase II efficacy study. And that's data taken from the real world, as the name would suggest, for an approved drug, which in this case is doxorubicin. So, at this stage, we don't anticipate needing a comparator arm for the Phase II study. But just to sort of remind everyone, and I've said, there would need to be a randomized Phase III trial, and that would need an appropriate comparator. So even though you can get approval at the end of the Phase II, you have to start the Phase III. And the results of both of those trials ultimately form the final approval package that goes to regulators.

Okay. All right, let's move on. Now, some of these, we are repeating, but I think it's important to go through each and every one that was sent in. So you've started to identify a baseline level of FAP required for a clinical response. Is it your expectation that AVA6000 could potentially be used in patients with tumors that express lower levels of FAP?

Actually, that's a really good question and a really important question. We're learning more all the time about how the clinical activity relates to tumor FAP levels. And to be frank, more data is needed to fully understand what level of FAP activity is required. But a couple of things to say. We saw in Figure 5 on the poster that lower FAP levels still lead to significant, in fact, comparable levels of doxorubicin release in the tumor, if you remember that comparison between the biopsies and the blood plasma. But what I would say is that there's going to be a choice to make to compensate for lower FAP activity, in whatever indication, by choosing more potent warheads, as we've talked about; so lower activity, more potent warheads. And I doubt we would choose a less potent warhead in a low FAP setting. And the other is half life extension, different mechanisms of action like immune modulators, those are also going to play a key role in lower FAP settings.

Okay. This next person is asking about the timeline of everything. So have there been any delays in enrolling patients? Why has the fortnightly trial timeline slipped from the guidance given in September 2023?

Yes, it's been a little bit slower to recruit patients in the first cohort of the 2-weekly study than we would have liked. [ There was also ] Christmas in the middle of it. But it's important that we learn as much as we possibly can from this trial. And therefore, what we've done is, we've been more selective with regard to the indications than we were in the early days of the 3-weekly study when there was a broad range of colorectal, pancreatic and so on. So we're being more selective now so that we can learn as much as possible in some of those orphan indications that might be of interest to de-risk the future efficacy studies. It's also worth just reminding everyone what we said in the recent RNS that patients in the 2-weekly study can be dosed in parallel, whereas in the 3-weekly study, they were dosed sequentially. So, that allows us to remain on track. So the question is an important one about sticking to time scales, and the fact we can dose patients in parallel allows us to stay on track to complete the 2-weekly study in the midyear and begin the efficacy expansion cohorts in the second half of the year.

All right. Now that very positive safety data and early signs of efficacy have been generated, is the company actively pursuing trials to target potentially other high FAP indications such as breast, ovarian, pancreatic cancers?

So we are not conducting any other clinical trials other than the one that you're all aware of, obviously, the subject of the poster and the presentation. But the question obviously brings up an important point that doxorubicin or AVA6000 is not limited in its scope to orphan diseases. There's the potential to consider using it in combination with other therapies such as -- I mean, breast and ovarian are good examples. And those are much larger indications where almost certainly, we would want to work with a partner rather than pursue that ourselves because of the scale of the clinical studies that we require. So our strategy, focus on orphan indications, develop more potent warheads and novel drug modalities, and work with partners, and we're certainly exploring those commercial opportunities for AVA6000 in those larger indications with partners.

All right. This is the last one. So this person wants to know, has the company done all it can to educate clinicians and the profession about Avacta and the trials, particularly if greater understanding can help recruit patients into future phases?

Well, as you would expect to know, we've done a lot in that regard, both to make clinicians and the pharmaceutical industry more broadly aware of pre|CISION and AVA6000. We do that through our own networks, and we do that through events exactly like this AACR, where there's a huge opportunity to meet for scientific and commercial discussions. But I should say that, that sort of education, if that's the word we use, will continue. It's an ongoing process. So -- and I guess the honest answer to the question is, no, we haven't done all we can do yet. For example, one really important activity is to engage with patient advocacy groups, and those are, of course, focused on particular indications. So when we've selected the indications for the expansion cohorts and ultimately Phase II, then we can engage with those appropriate patient advocacy groups, and those can be hugely influential in terms of patient recruitment.

All right. Alastair Smith, thank you so very much indeed, the CEO and the Founder of Avacta Group. We appreciate that. And thank you as well for sending in all of these questions. We appreciate that. And if you didn't have time to watch this or perhaps you just want to go over, maybe pause and pour over some of the details of the answers, then this webinar will stay indefinitely on the Turner Pope website in the Webinars section. So you can have a look at that at your leisure. But for now, thank you very much indeed for watching.

Thank you.