BioInvent International AB (publ) (BINV) Earnings Call Transcript & Summary

Welcome to the BioInvent Q2 report of 2020. Today, I'm pleased to present the CEO, Martin Welschof. [Operator Instructions] Speakers, please begin.

Thank you very much, and this is Martin Welschof, the CEO. First of all, welcome everybody. Today, I'm together with Stefan Ericsson, the CFO; and Andres McAllister, the Chief Medical Officer. Before I start the presentation, just a quick word. Of course, we are all very pleased with the financing that we did over the summer period and Stefan will cover that in more detail. And I think the most important point related to that, that we basically have removed the financial risks for some time and can now really execute on our strategy that I will explain and our plan to you again in a little while. So if you can go to the second slide, which is basically the standard forward-looking statement. And then please right away to the Slide #3. And this is just to remind you a very, very quick snapshot. I will not cover all these in detail because most of these you would already know. And basically what we're doing, so we have a fully integrated discovery engine, which provides antibodies and targets, which is validated through a number of collaborations and that we are also using internally. And with that platform, you basically have generated a portfolio. The current lead product is BI-1206, and we'll come back to that later in more detail when I give the word to Andres McAllister. So this is currently 2 clinical trials. And our portfolio, obviously, is growing. So we have now 2 additional programs close to the clinic, which is basically BT-001 and BI-1808, and I will cover this also a little bit more in detail when we talk about the portfolio summary. So basically, by the year-end this year, we will have 4 programs running. And this is clearly our approach. We run a portfolio multiple shots on goal since we all know the attrition rate in clinical development. The last bullet here, you see that we basically have through the recent financing basically broadened our institutional investor base. And as I said, Stefan at the end will explain that to you in more detail. But you see the names listed there. Obviously, we have Van Herk, our very strong supporter, has invested again; but also Omega; and then we've got new investors on board, such as HBM from Switzerland, and then from Sweden, Robur, AP4, and Invus from France. And as I said, Stefan will get back to that later in more detail. I think that should be sufficient as a snapshot. Then Slide 4, I will not go over that again. That's basically our core, just to remind you, which is affinity screening. We have a platform that can use a human tumor tissue or human tumor cells and then we apply our n-CoDeR antibody library and basically get targets and antibodies that bind to those targets. And that we'll use in collaboration as well as internally. But now I want to spend some time on Slide 5, which is giving you the portfolio overview before I hand over to Andres as he goes a little bit more into detail of the program. So when you look at that table, you would see basically 3 categories. So we have 3 programs around our target, FcgRIIB, which also Andres can maybe explain a little bit. And there we have 2 antibodies, our lead antibody, BI-1206. So this is in Non-Hodgkin Lymphoma and in solid tumors and I leave the details to Andres. But then there's a second antibody, 1607, and this is basically scheduled to go into the clinic at some time point next year. And then we have followers, basically, antibodies that have been derived generated through our screen on tumor-associated T regulatory cells. There, I want to highlight 2 programs, in particular, one is BT-001, which is a collaboration that we're running with Transgene. And we had quite a number of applications this year and abstracts really showing the big potential of that program, which is an anti-CTLA-4 antibody in combination with our -- with the oncolytic virus platform from Transgene. And we have filed a CTA and basically hopefully can start recruiting at some time point at the end of this year. Then we have a second candidate, which also has been derived from the TREGS cell screening, which is called BI-1808, which is targeting TNF receptor 2. And there, we're also on track such that we start recruiting patients towards the end of the year. So as I already mentioned on my initial slide, we will have then 4 programs by the end of the year in the clinic, which, of course, is very, very good. And then there will be a fifth program at the beginning of next year. We have a third candidate from that screening, another anti-TNF receptor 2 antibody, which is BI-1910, and that has been also published in an abstract in the middle of the year, which is another interesting candidate, but this is still in preclinical, but that might be a candidate that at some time point we push into the clinic. So -- and then obviously, we have an ongoing activity regarding screening. That's basically the fourth bar under this category. So we have ongoing screening on T regulatory cells and are generating new candidates as we speak. Then the last category is in the collaboration with Pfizer. And just a few comments there and we can come back to that in more detail when we do our Q&A. So we have made good progress. And you could see that we have extended our collaboration with Pfizer. But obviously, we have some delays here, not on our side but on Pfizer side because the way it works is that we generate data that we then transfer to Pfizer and then they have to repeat, sort -- and experiment and do certain control experiments. And due to COVID, Pfizer was closed down, at least the laboratories, for quite some weeks and months even. But they are now fully functioning and operating again, such that we hope that they can select during the second half of this year antibodies to the targets that they already have reserved. They picked 2 targets last year. And we're actually quite hopeful that we will reach the next antibody selection milestones and they might even select additional targets. So I think we're on track again since they are fully operational. And again, so we can also come to that in more detail at the end of our session. So going then to Slide 6, and I think I will use that to hand over to Andres, such that he can give you a little bit more background regarding our lead antibody, which is currently in 2 clinical trials, and he will give you some background again about the mode of action, the target. And then we'll focus mainly on the clinical time lines, settles of the clinical trial as well as the data that we have generated so far. And then at the end, Stefan will finish with the financials. Thank you, and go ahead, Andres.

Thank you, Martin. So yes, so as a quick reminder of the way our first candidate, BI-1206 works, it basically recognizes the only inhibitory Fc gamma receptor. You might remember that they are activating inhibitory receptors. And there's only one actually inhibitor receptor, and BI-1206 recognizes very specifically that, that receptor can actually block the activity of that receptor and it blocks the signaling and transduction through the receptor. So that's basically how it works. It's a very, very specific antibody, very difficult to generate. It was because actually FcgRIIB is 95% identical to -- in the extracellular domain to FcgRIIa. So it's very difficult to generate an antibody that has that level of exquisite recognition. In the case of BI-1206, there is no cross-reactivity between the 2. So in this slide, the bottom of the slide, you see how -- when BI-1206 blocks FcgRIIB. CD20 actually remains on the surface. Rituximab or any anti-CD20 targeting antibody can recognize CD20. And the antibodies together can pursue the destruction of the tumor cell, which is a situation which would not happen in case the receptor was not blocked. And this is -- that has been largely demonstrated in B-cell lymphomas and CLL. So let's go to the next slide then. This is the exact hypothesis that we're testing in the clinic. So patients are being infused with BI-1206 in combination with rituximab. We're using rituximab by the usual regimen that is usually administered. So it's once every week for 4 weeks. And then when patients show evidence of clinical benefit, we move into the maintenance phase. We give BI-1206 in combination with rituximab. And right now, we are still in part A of the study here in the black -- in the white panel. And we -- right now, the idea is to find the appropriate dose in order to be able to move forward into part B of the study, which will be an expansion cohort, currently planned for 12 patients. And we will try to and reach for mantle cell lymphoma patients. And the reason -- and I'd come back for the reason for that. But this is currently where we are. Of course, the primary endpoint of this study is to explore the safety and tolerability of the 2 antibodies together and, of course, look for signs of efficacy, which, as I will describe later, we are starting to see interesting things happening in the patients. Obviously, these patients must have received other treatment and must have become resistant to rituximab. And most of the times, they have received a number of other treatments. So they're quite advanced patients. And then we administer the treatment for -- of the 2 antibodies together. If we move to the next slide, we are looking then to -- there are several value drivers that are important to consider here. The first one is that the rationale has been very strongly demonstrated. Interestingly, this would be a chemo-free regimen. So this is very important for these patients because they have often received a number of other treatments, including several chemotherapy lines. So they're older patients. And so they do not tolerate well new to non very tolerable treatment. This is something that we consider is very important. As I mentioned, this is a first-in-class we -- and actually only in class. We don't have any direct competitors as of yet, and we believe this is very likely due to the fact that antibody specificity is so difficult to obtain. We are looking into developing this drug into third and second lines in follicular lymphoma and mantle cell lymphoma. Marginal zone lymphoma patients are also included here. And as we mentioned here in this slide, we have obtained orphan drug designation in the U.S. for mantle cell lymphoma. You might know that mantle cell lymphoma patients are -- their disease is often more aggressive. It progresses quickly. There is few options. And after they become resistant to BTK inhibitors, such as ibrutinib, they progress very quickly. So there is an opportunity there to come back to a less -- a more tolerable treatment for those patients. And we actually have data that shows that many of those cells from many of those patients who have become resistant to many of these treatments, including ibrutinib, lenalidomide, et cetera, that this combination treatment for BI-1206 and rituximab actually is effective against those resistant cell lines. So that's very interesting. That's where we are right now in the follicular lymphoma and Non-Hodgkin Lymphoma space. If you move to the next slide, this is a little bit of what we've seen in patients already. And so we have 1 patient who is in complete response. And of course, that is already has lasted for several months and this is a matter of excitement to us. We have seen cells for the mantle cell lymphoma patient that were -- something that had a blastic form. So that is a form of disease where cells circulate in the body and you can actually detect them in the blood. We saw those cells be depleted by a single injection of BI-1206, so really showing that the antibody is doing what it is supposed to do. And so we're seeing those -- and we have another patient who had -- who also remained with partial disease for the entire year treatment of this study. So this is interesting. We're starting to see those dose responses. And of course, we are very excited about the future when we're starting to get into more relevant doses where pharmacokinetics and pharmacodynamics are reaching the appropriate dose. So if we move to the next slide. This actually tells us a little bit about the potential of this antibody. We started in indolent Non-Hodgkin Lymphoma because it was a more targeted approach. And we know that mantle cell lymphoma patients, for instance, and some follicular lymphoma patients are very high expressors of FcgRIIB, so very high expressors of the target. And of course, that prompted us to specifically try to see activity in those patients. But we are working with a company called Skyline Diagnostics. The idea is to be able to cherry pick the patients that may respond to the treatment, and that would allow us to go to other spaces in Non-Hodgkin Lymphoma and I'm thinking specifically, perhaps, the LBCL patients or other types of patients, et cetera. But then interestingly, recent data from a number of other groups and BioInvent have shown that we can actually move into solid tumors. FcgRIIB has been shown to be a major driver of resistance inside the tumor microenvironment and specifically anti-PD-1 agents may suffer from this. There has been a number of other papers showing that this may be an important mechanism of resistance. And when looking at all that data and the data generated at BioInvent, that prompted us to start a new trial, which I will talk about in a minute, just to say that if you look into FcgRIIB, it also has been shown to have important activities in autoimmune disease. So this seems to be a target that can be used for a number of things. Of course, bioInvent is currently focused totally in immuno-oncology. But these autoimmune disease aspect is something that we are only exploring preclinically for the time being, but it's something still promising. So if we move to the next slide, this is the study that we're carrying out in solid tumors. You may have seen that we started dosing patients. We have dosed already. We, of course, are in part A of the study. The dosing is proceeding. And of course, we can -- because of we -- this is the second trial with our drug. We could start at a much higher dose. This is currently being studied in the U.S. and Europe. And of course, you may have seen that we signed a deal with Merck whereby they are providing pembrolizumab. And as soon as we move into part B of the study, we'll be able to test BI-1206 at the recommended Phase II dose in combination with pembrolizumab. And of course, the part A of the study is ascending doses of BI-1206 in combination with pembrolizumab. I think it's interesting to note that we are using an adaptive design, which we believe is likely to lead us more quickly into the appropriate doses. I think if we move to the next slide, I think I already told you this. But perhaps something that I didn't mention is that this is in patients who have already become resistant or refractory to anti-PD-1 or PD-L1 targeting agent. So importantly, if we -- in case we see responses, this is highly probable to -- that we can attribute it to the combination treatment. And I think I mentioned Skyline Diagnostics where we're looking to identify a small signature of -- genetic signature that will allow us to identify the patients that would most likely respond to treatment. So I think I'll stop there and now give the floor to Stefan, but I'll be happy to answer any questions during the Q&A session.

Thank you, Andres. Please turn to Page 13. I will present the financial overview for Q2 and the 6-month period January to June. All amounts are in SEK million, unless otherwise stated. Net sales were SEK 15.6 million in Q2 2020 compared to SEK 32.9 million in Q2 2019. This is a decrease of SEK 17 million. The decrease is mainly related to that net sales in Q2 2019 included a EUR 0.75 million milestone from Mitsubishi and a $0.5 million milestone from XOMA. Net sales for January-June 2020 was SEK 32.4 million. For the same period 2019, net sales were SEK 50.3 million. This is a decrease of SEK 18 million. The reasons for the decrease are the same as for the second quarter. In Q2, operating costs decreased SEK 11 million from SEK 65.6 million in Q2 2019 to SEK 54.7 million in Q2 2020. We had somewhat lower costs in BI-1206, BI-1607 and BI-1808. For January to June, the decrease of operating costs was SEK 6 million from SEK 110.7 million in 2019 to SEK 104.4 million in 2020. We had a little bit lower cost in BI-1206 and BI-1607. The loss was minus SEK 39.3 million in Q2 2020 and SEK 72 million for January-June 2020. Liquid funds end of June was SEK 182 million. As of 30 June, ongoing share issues were completed in August 2020 and amounted in total to SEK 625 million before issue expenses and approximately SEK 589 million after issue expense. Please turn to Page 14. I will do a summary of the share issues. In total, SEK 625 million was raised before transaction costs. The directed share issues were SEK 487 million before transaction costs. It was completed in July. New investors were HBM Healthcare, Swedbank Robur Medica, Invus. Also existing shareholders participated. These were Van Herk Investments, Omega Funds, Fourth Swedish National Pension Fund and Handelsbanken Healthcare. The subscription price was SEK 1.38. The repair rights issue was SEK 139 million before transaction costs. It was completed in August and it was oversubscribed. It was carried out primarily in the interest of shareholders who didn't participate in the directed share issues and aim to in part compensate for the dilution of the directed share issues. The proceeds from these share issues are made intended for progressing and expanding clinical development of BI-1206 and advancing 3 compounds into clinical programs. These are BI-1808, BT-001 and BI-1607 and also continue development of prioritized preclinical programs. Over to you, Martin.

Yes. Thank you. So I think probably what we should do really is use the time for Q&A. And I will ask the -- to open the Q&A session, please.

[Operator Instructions] We do have a question on the line, and that comes from the line of Niklas Elmhammer of Redeye.

I was just -- It is nice to learn some more about the BI-1808 project in the recent months. Maybe if you could elaborate a little bit on the advantages compared to other T reg targeting approaches and also on the safety profile and dosing, which seems quite high, I believe.

Absolutely, we can do that. So if we go maybe back to Slide 5, which is showing the portfolio, this we can use as a background. And maybe, Andres, if you can start commenting on the points that Niklas had, and then I can add whatever I feel we should have in addition.

Sure. So if I understood the question correctly, you'd like to understand the differentiation of our antibody -- of the 2 antibodies, is that the question, Niklas?

Yes. Compared to other T reg targeting approaches.

All right. Compare it to other T reg. Yes. We have interesting data showing that its TNF receptor 2 is a very interesting way of targeting regulatory T cells in the tumor microenvironment, specifically. An important differentiating factor is the level of expression within the tumor microenvironment. So we know that the higher level of expression of TNF receptor 2 in the tumor microenvironment and a lesser level of expression in the periphery makes the thing that we will have a much more tolerable profile and perhaps even more -- have a higher level of efficacy. That's one of the things. The other thing is that we also -- when you look at CD8 Treg ratios, they actually improve with this approach. And that's not the case with most of the competitors, not all, but most of the competitors. So we're not only having a safety margin that is likely to be better, but we also improved the ratio of CD8 plus T cells infiltrating the tumor, which is, of course, the #1 determinant of efficacy in immuno-oncology. So that's something that we believe is very, very interesting in this specific antibody.

[Operator Instructions] And we have a question from the line of Sebastiaan van der Schoot of Kempen.

Congratulations on the progress so far. I was wondering whether my math was correct regarding your current cash position. Is that approximately SEK 670 million? And could you maybe expand on how long your cash runway you think it will be? And whether you will only focus on the current efforts in the -- already in the pipeline or we're also focused more on the scope, and we maybe can see other preclinical stuff entering in the coming years?

I can start to comment on the cash position. It's true what you say if the -- all the share issues have been completed by the end of June, we would have had around SEK 676 million in cash liquid funds. And currently, we foresee that with the planned activities, this can fund us into sometimes in the first half of 2023.

Okay. And regarding the other programs, some of the stuff entering the clinical pipeline?

So I think if I understand you correctly, Sebastiaan. So obviously, what Stefan said would fund the planned activities. And if you go back to the portfolio slide, which is Slide 5, obviously, as more outlined now in detail by Andres, the 1206 program but then also the initiation of 1607 as well as then probably seeing first glimpse of data for BT-001 and BI-1808, which both hopefully will start recruiting by the end of this year.

Okay. That's very helpful. And then regarding BI-1206 in solid tumors. You mentioned that there would be a paper in preparation. Could you also maybe indicate the time lines that you foresee for submission or even publications in due time?

Yes, obviously, that's always a difficult issue because this -- obviously, what we're aiming for is a high-class scientific publication. And it's in the pipe, basically. But it's difficult to forecast really when you get it through. And since we are on publications, it will not be only 1206 for solid cancers. We're also working on BT-001 and probably -- I'm not 100% sure whether I remember correctly also BI-1808. So that's something which is in the pipe. But it's always difficult to forecast since we normally don't publish in low-ranking journals. We always try to place it in very good journals. And that's difficult to forecast when you go through because very often they ask for additional data and scientific work. So I can't give you a clear date. So what I can tell you is that by the end of this year, we are planning to publish a number of abstracts. ASH, for example. And maybe, Andres, you know a little bit more in detail, but I think it's a couple from the preclinical group as well as from the clinical. Andres, maybe you can add on here a little bit.

Yes. No, we will be present at ASH. We have a couple of posters, and we will be communicating about our ongoing trial and about several things that we feel is appropriate. And so that will be at ASH, yes.

Okay. Very helpful. And then -- I'm sorry, but I have a few questions. Regarding BT-001, could you maybe give more details regarding indication and the trial design?

Martin, do you want to -- we haven't really disclosed the details of the trial. What I can tell you is that there is a huge level of excitement about this project. Definitely, there is -- the world has changed. And the perception about this kind of approach is now at a very high level of interest. So that will happen. It will -- if you will, if everything goes well, we should be able to start treating patients. I guess, what I can tell you is that the indications that we're likely to target are much wider than it has been usually tested with this sort of approach. And of course, we're very excited because when you follow the literature, it makes a lot of sense to take this approach when you're treating patients. So we're super excited. The KOLs that we're working with, the investigators are very interested and very excited about this and we are eager to be able to start.

Okay. And then my final question is regarding the COVID-19 impact regarding the trial recruitment in aHL. Could you indicate what the number of patients that were enrolled in the last 6 months?

I cannot disclose that. We haven't disclosed that. I'm sorry. Recruitment is ongoing. It is a difficult -- it's a very competitive environment, but we are enrolling patients. And COVID is there. But for the time being, we have been able to recruit patients.

Yes. Maybe also comment here from my end Sebastiaan. So maybe going to Slide 15, which is the upcoming news flow. So basically, when you look at second half of 2020, so we expect early results from the Phase I, BI-1206, and as Andres was saying, so we're recruiting patients. So that's all as planned at the moment. So regarding COVID, so we have taken all measures as much as we can, as much as also reasonable for us as a small biotech company. And we monitor it on an ongoing basis. So in case there should be delays, of course, we would inform the market. At the moment, we are on track not only regarding BI-1206, but also regarding the other 2 programs, BT-001 and BI-1808 that we also discussed a little bit. Also there, we are on track currently. But as I said, so we monitor it on an ongoing basis. In the case, we should have delays and we will inform the market accordingly. So far, so good, I would say. And then since we are on the news flow. So we also expect during second half of this year is some potential additional milestones from collaborations. I mentioned already a little bit the Pfizer. But obviously, we also have other milestones that hopefully we'd take in kind of like we had in 2019 where we also had, for instance, Mitsubishi and Takeda/XOMA.

And we have no further questions at this time. Please go ahead, speakers.

Yes. I think maybe I can round up basically. And if any additional questions should come up, happy to cover those as well. So as I said initially, so we're very happy about our solid financial settles that we are in at the moment because this really transforms the company and allows us really to execute on our portfolio plan as I already -- always stress even through my early days in BioInvent, we don't want to be a one-trick pony. We want to have several shots on goal. Now we have that. And I think that's very, very good and this will ultimately drive value. Besides our own portfolio, obviously, we have focused on the collaborations, as I already mentioned. And we also have a very strong focus on additional new further partnerships. So that's basically where we focus at the moment. It's basically the internal programs, the collaborations and trying to strike new additional deals. And I think that's where I will stop. Just, Andres or Stefan, if you have any final words, please do so. And in case we should have any additional questions, happy to address those. But otherwise, I think we have covered everything. So Stefan, Andres, anything from your end that you would like to add?

No, not for my side.

No. Not from my end either.

Okay. Then I would say, let's stop here. Thank you, everybody, for attending and also thank you for the very good questions. And we're looking forward to update you again, hopefully, very soon.

This now concludes our presentation. Thank you all for attending. You may now disconnect.