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

Welcome to the BioInvent Q4 Report 2020. Today, I'm pleased to present the CEO, Martin Welschof; and CFO, Stefan Ericsson. [Operator Instructions] Speakers, please begin.

Yes. Thank you very much for the introduction, and welcome, everybody, to our audio cast for the Q4 2020. The next slide, please. So on the next slide, you see our forward-looking statements since we are listed in Stockholm. And then on Slide #3, you will see a very brief snapshot of the company. So just to remind everybody, so we are an antibody discovery and target discovery company. And we are focusing clearly on cancer immunotherapy. And there, specifically, we are focusing on overcoming tumor resistance. We have a lead program, BI-1206. This is currently in a Phase I/II clinical trial for non-Hodgkin lymphoma and also in a Phase I/II trial for solid tumors, and I'll come back to that later in a little bit more detail. And then we have 2 additional programs. So currently, we have 4 programs in the clinic, all proprietary. And I will come back to that in more detail when I discuss with you our current portfolio. All those programs are based on our in-house discovery. So we have a discovery engine that has been validated through a number of collaborations, such as Daiichi, Mitsubishi, Takeda and most recently with Pfizer. Pfizer selected in 2019 targets, and then by the end 2020 antibodies that they are now moving into their development pipeline. On the last bullet on Slide 3, you see a brief summary, and Stefan will come back to that a little bit later. Obviously, we had big news today in the morning, announcing a very good and high-quality financing. So we have now new shareholders that I would like to welcome, Redmile and then also the current shareholders such as Van Herk, Omega, HBM, Swedbank Robur, The Fourth and Invus, of course. And from the current shareholders, I want to mention Van Herk, HBM, Robur AB, The Fourth, Invus, they also participated in this financing that we just implemented during the night and announced this morning. And we'll come back to that later in more detail, and I'm sure there will be a lot of questions around it, and we'll try to keep the presentation rather short such that we have sufficient time for Q&A. So on Slide 4, just to remind you quickly about the very unique discovery platform that we have. So the phenotypic functional-driven discovery platform. And I'm not explaining that to you in detail, just highlighting the USPs. So first of all, I mentioned it's patient-centric, which means we are starting from new tumor tissue that we will see freshly from the local clinic in Lund, and we have a very good collaboration with them such that we get high-quality material several times a week. Once we have done our QA, QC, this goes into the screening process. And we screen our human n-CoDeR phage display library that has been validated now a number of external collaborations, as already mentioned. And once we have identified specific binders, then before we even check what those antibodies are binding to, we do phenotypic screening, which means we check those antibodies for therapeutic effects in a number of animal models. And then we only focus on those who have shown strong therapeutic effects. And then for those, we also identify the target. So basically, this is a machine which splits out clinically or preclinically validated targets and targeted antibodies. And obviously, this is of clinical relevance, that was what I wanted to say before. So with that platform, we have served collaborators, and we might also come back to that in our Q&A session, but most importantly, we have built, and this is summarized on Slide 5, a very interesting portfolio with multiple value drivers, and it's quite focused, even though it's a number of programs. So currently, 4 that are in the clinic. By the end of the year, we will have 5 programs in the clinic. But they are all around targets and cells, which play a role in tumor resistance in various liquid as well as solid cancer. So the main focus is on solid cancer. So we have one program in indolent non-Hodgkin lymphoma, which is a liquid cancer, obviously. And I go briefly from the top to the bottom. So we have 2 antibodies targeting a structure called FcgammaRIIB. And our lead there is BI-1206. And as I already mentioned, this is in the clinic on indolent non-Hodgkin lymphoma but also for solid tumors. Just to highlight here, so this problem has been partnered for China with CASI Pharmaceuticals. And in the solid cancer trial, we have clinical supply in collaboration with Merck. But Merck doesn't have any right to BI-1206. I'll come back to those 2 programs later in more detail. Then we have a second antibody called BI-1607. And this is actually scheduled to go into the clinic during the second half of this year. And once we do that, we will also announce a little bit more around the mode of action, et cetera, et cetera. So this needs to come basically. Then we had a very broad approach and still have an ongoing approach actually screening on T regulatory cells, specifically in the tumor microenvironment. And there, I want to highlight 3 programs. First of all, our collaboration with Transgene, which is a 50-50 collaboration. And that program is called BT-001, which is a combination of our proprietary anti-CTLA-4 and the oncolytic virus platform from Transgene. And there, we just got approval for several clinical trial applications. And this program is ready to move ahead. And we are expecting to enclose -- to enroll patients at any time point soon. That program, and I will also highlight a little bit more, has been published quite significantly, the preclinical data, I mean, during last year and also a lot of promise. And it's basically a fast follower of the [indiscernible] program. They also have combined the oncolytic virus platform with an anti-CTLA-4 antibody, which is the one which is currently used in the clinic. Then we have quite some activity around TNF receptor 2, which also recently was highlighted in an endpoint article. BeiGene have licensed their anti-PD-1 to Novartis, just recently brought antibodies against TNF receptor 2 into their hands for China. Not only for China, I think for Asia, New Zealand and Australia, an option license deal. And obviously, acknowledging TNF receptor 2 -- the pathway of TNF receptor 2 plays a big role in the PD-1-based therapies. And in that article, it was also mentioned that BioInvent is actually quite ahead of the crowd since we have BI-1808, which is now in the clinic. And we have enrolled the first patient, and we have mentioned that already. And then we have a second program BI-1910, which is basically preclinical but we are very much ahead of everybody at the moment, and we are planning to keep that advantage. Then the last column here in a way of the last bucket or category is our collaboration with Pfizer. And there maybe just to mention, so they have selected targets that were expressed on tumor-associated myeloid cells in 2019 and now in 2020 -- end of 2020, have selected also antibodies, which are now moving into their development. Coming then to Slide 6, where we provide a quick product overview for BI-1206. So I mentioned already that it blocks FcgammaRIIB and has application potential in both in liquid cancers as well as in solid cancers and also in autoimmune disease. And I'll come back to that later in a minute. The lead program is clearly in the non-Hodgkin lymphoma, which is an interesting market and also a very interesting introduction point of the antibody. And as I said, it has the potential also in solid tumors, and I'll come back to that also in a minute. So probably going directly to Slide 7. So in the non-Hodgkin lymphoma trial, where we're exploiting FcgammaRIIB expressed on the tumor B cells. And there, we're focusing currently on 3 areas, which I mentioned on the right, mantle cell lymphoma, follicular lymphoma and marginal zone lymphoma. And for mantle cell lymphoma, we have orphan drug designation. And the trial design is basically described on Slide 8. So it's an open-label study. We're currently -- and consist out of 2 parts, Part A and Part B. Part A is the dose escalation. And Part B the dose expansion. And we're currently at Part A. And I will summarize the data on the next slide, but not quite yet. Just to mention a little bit on the study here. So as I said, so far, A is almost done. We're at the end of dose escalation. And we are soon moving to dose expansion. We are basically focusing on patients who have relapsed or are refractory of those 3 different non-Hodgkin lymphoma types, mantle cell lymphoma, follicular lymphoma and marginal zone lymphoma. So going to Slide 9, which basically gives a quick update that we already provided to the market at the end of January. So to date, 15 patients are enrolled in Part A. 9 can be evaluated at the moment and 2 are still on treatment. And out of those 9, we have 2 complete responses. And those complete responses are still continuing as of today. One is more than a year and the other one is more than 2 years, which I think is a very a strong value indicator because those patients that we're treating, normally if you can get a response again, would not respond for that long. And then we have 4 partial responses. So I think still the early days, but 6 out of 9 is a good start, as a next step. So we still have to get the read off from 2 patients at the 100 mg, which should come in at any time point soon. And then, of course, we'll continue to recruit and then hopefully determine soon the recommended Phase II dose. And then we'll start Part B. When we do that, we will obviously mention that also to the market and provide an update. On Slide 10, you basically see the potential for 1206. So when we start at the center, this is indolent non-Hodgkin lymphoma. This can be expanded into non-Hodgkin lymphoma, and we are also looking into solid cancers. And to that study, I will come in a minute. There we're focusing at the moment on metastatic melanoma and non-small cell lung cancer, but we are also looking for other solid tumors. And then we also have the possibility to grow into autoimmune diseases. But within BioInvent, we clearly focus on the cancer indications and beyond autoimmune and rare disease, we try to explore in academic collaborations. And would be interested to establish at least the proof-of-concept preclinically and then see how we take it from there, but our focus is clearly within cancer. Now moving to Slide 11. So this is the ongoing solid cancer study that's run under a clinical supply and trial collaboration with Merck. We are currently in Part A. It is also a dose escalation, then followed by a dose expansion. We're focusing on patients with solid tumors who have relapsed or are refractory to anti-PD-1 or anti-PD-L1. And the current plan is to update the market towards the end of the year about the status and data that we have accumulated so far in that study. So far, that trial is running well and has been enrolling patients. So then on Slide 12, a quick introduction to the T regulatory cell program. This is the antibody that I already mentioned, BI-1808. This is in the clinic for TNF receptor 2. And on Slide 13, you see the clinical trial design. And as I mentioned, the study has started. And what we're doing here is that we're testing both. So we're looking first for simulation activity. And there, we are looking, in particular, for 3 indications, non-small cell lung cancer; ovarian cancer, which is quite interesting, then a lot of material that we use for screening came from ovarian cancer patients. But then we also look at PTCL, which is a very rare T-cell lymphoma, which is also quite interesting since TNF receptor 2 as a target seems to play a role there. And then in addition, we'll look for combination and for synergies with anti-PD-1. There, we also look for non-small cell lung cancer as well as ovarian cancer. And I think ovarian cancer is also very interesting. And this is an indication where checkpoint inhibitors did not have a strong footprint yet. So as I said, so the study has started. We have enrolled the first patient. And I think it's quite interesting we are allowed to start at a relatively high dose such that we might be able to see already glimpse of data during this year. So then going to the -- to Slide 15, which is our program that we run in collaboration with Transgene, BT-001. And so Transgene has a very interesting oncolytic virus platform based on [indiscernible]. And that virus can incorporate large payloads such as full-length antibody. And we have identified in our screening onto regulatory cell, our own proprietary anti-CTLA-4 which is nicely differentiated from the one which is currently used in the clinic. In that way, it has similar inhibition or blocking profile of CTLA-4 but it has much, much stronger TREG patient activity. And what we could see preclinically and that has been published last year significantly, that we have a very nice enriched expression of anti-CTLA-4 only in the solid tumor environment after intratumoral infection and a very strong anti-tumor activity, and that is quite encouraging. And I mentioned already at my introductory part that Replimune has a similar program, which already has generated some clinical data, such that our hopes are quite high that we will have at least the same quality of data if maybe not even better since we have a more potent anti-CTLA-4. I should also mention briefly that the anti-TNF receptor program BI-1808, but also BI-1910 also has been published last year at AACR and SITC. And especially for BI-1808, we had very encouraging preclinical data where we could show that it works as a single agent, but also very well as a combination -- in synergy in combination with anti-PD-1. And that's basically also we're testing, as I already have mentioned. So I think I stop here such as Stefan can give the financial overview and also talk about the most recent fund raising a little bit more in detail, and then I have a slide at the end, Slide 18, that basically also highlights the milestones that we have achieved, but also what we are doing going forward, especially also with the new funds coming in. So Stefan, maybe take it, please on Slide 16.

Thanks. Please turn to Page 16. I will present the financial overview for Q4 and the 12-month period, January to December. All amounts are in SEK million, unless I say something else. Net sales were SEK 98.7 million in Q4 2020 compared to SEK 25.4 million in Q4 2019. And that's an increase of SEK 73 million. Net sales for January to December 2020 was SEK 147.4 million. And for the same period in 2019, net sales were SEK 93.7 million. And that's an increase of SEK 54 million. The increase is mainly related to the net sales in 2020. It was including -- we had an upfront payment of $5 million from -- when we licensed BI-1206 with CASI Pharmaceuticals for the China region. We also had a $3 million milestone from Pfizer, which was triggered by the selection of antibodies under our collaboration. And we had a EUR 2 million milestone under our collaboration with Daiichi Sankyo when they started their Phase I study. And these prepayments, they correspond to approximately SEK 91 million. In 2020, revenues from production antibodies was 9 million lower than in 2019 and also 9 million lower for research fund. When it comes to operating costs, in Q4, operating costs increased from SEK 65.8 million in Q4 2019 to SEK 69.3 million in Q4 2020. We had higher cost in BI-1808, 1206 and TAM program and also lower cost for production of antibodies for customers. For January to December, the decrease of operating costs was SEK 9 million from SEK 231.6 million in 2019 to SEK 222.8 million in 2020. We had low cost in BI-1206, 1607 and the Treg program and also a little bit lower cost for production antibodies for customers. At the same time, we had higher costs in BI-1808 and the TAM program. We're also -- in 2019, we also had some [indiscernible]. The profit for Q4 2020 was SEK 28.5 million, and the loss for January to December 2020 was minus SEK 76.3 million. Liquid funds end of December 2020 was SEK 729 million. When it comes to share issues, the share issues completed in August 2020 amounted to SEK 625 million before issue expenses. And CASI Pharmaceuticals, they made a $7 million investment in shares in Q4 2020, and that corresponds to approximately SEK 61 million. Please turn to Page 17. I will do a summary of the directed share issue that was announced this morning. It's a directed share issue of SEK 962 million. That corresponds to $116 million before transaction costs. And the investors, this range of international Swedish institutional investors, including Redmile, Invus, HBM, The Fourth, Swedbank Robur Fonder and Van Herk Investments. This capital injection enables us to accelerate and broaden our clinical development. The proceeds that we have got will fund the continued transformation of BioInvent, expansion of our programs. And assuming continued generation of positive data, we plan to, in particular, use the fund to prepare a pivotal clinical trial for BI-1206 with the aim of -- and that's for NHL, with the aim of receiving an accelerated regulatory pathway, but also to expand the clinical programs of BI-1206 in combination with Keytruda in solid cancer and also BI-1808 in solid cancer. The subscription price for new shares was SEK 50.36, and that corresponds to a 5-day volume-weighted share price we want. 2.8 million new shares are issued based on authorization granted by the EGM on -- in November and 16.3 million new shares are issued subject to approval of an EGM on the 23rd of March this year. That was the summary for the period. Over to you, Martin.

Yes. Thanks very much, Stefan. So please, if we could go to Slide 18. Because what I would like to do is to give you a quick summary, and I will not go in with details there on what we have achieved during 2020. So basically, as you can see, that's the upper part of the slide. We had quite a number of important clinical and preclinical development milestones, and that's, of course, also reflection that we are pushing ahead with the portfolio. This is clearly our strategy. So we are not focusing on 1 program, but on several programs because we feel this is the best risk diversification that we can do as a company in order to increase the chances of success to generate significant value. Then we also had and still have quite some focus on business development and partnering activities. So we mentioned a number of times already that we have our deal with BI-1206 and CASI Pharmaceuticals. They got an exclusive license for the Greater China region, which would include Macau, Hong Kong and Taiwan. We talked already about the commercial numbers there. But I can say this is really a very active collaboration. You could also see that we had the Wei-Wu, the Chairman and CEO participating in our webcast, and we're very pleased with CASI Pharmaceuticals, and we feel that they add also significant value to the program. Stefan mentioned already the milestones that we received from Pfizer and Daiichi. And then, of course, we also have in-house manufacturing capabilities, which is the #1 priority, of course, to support manufacturing for our programs, which also enables us to be very quick. So just to give you an idea, in August 2018, we had 1 clinical program. By the end of this year, we will have 5 clinical programs, and that is only possible with having our own talent generation and manufacturing capabilities in-house. But in case we have available stocks and we do also manufacturing for external parties, and we signed and this will impact the deal with Cantargia at the end of 2020. Then looking now a little bit detailed at 2021, and I touched it basically on the main milestones already. So obviously, we have started a number of studies. We also presented our early data in non-Hodgkin lymphoma. And as Stefan already mentioned, the financing that we just implemented successfully during tonight and announced this morning, will allow us really to prepare for potential accelerated approval. Obviously, this whole thing will be data-driven. But currently, the data that we see is actually quite encouraging. And if that should hold up during the dose expansion phase, then that's something that we will be prepared for on CMC side, but also with all the clinical development steps that need to be implemented in order to be able to do that. Then, obviously, we want to push our second program 1607 into the clinic during the second half of this year, and that will be also quite exciting. And I think it will be also interesting for the market because then once we do this, we will also give a little bit more granularity regarding the mode of action of this antibody. We have been quite secretive about it, and that's for the reason in order to give the competitive advantage. And then we have those 2 programs that I already mentioned, 1808 and 001 that hopefully will give a first glimpse of data during this year already, but definitely next year. And we will remain active regarding business development, potential additional partnering. You can see that with all our programs, we are actually in quite interesting areas where there's a lot of demand and unmet need. And then last but not least, so at the end of this year, we want to present our second clinical program with BI-1206 with pembrolizumab in solid tumors. So that will be happening at the end of the second half of this year. I think I will stop here such that we have still some time for question and answers. Thank you very much for your attention.

[Operator Instructions] Our first question comes from Sebastiaan van der Schoot from Kempen.

Martin and Stefan, can you hear me?

Yes, Sebastiaan.

Yes.

Yes. Great. Congratulations on the results this morning. Can you maybe expand on how the rates have expanded your current cash rate? And does the current cash position also allow you to approach business development in a different -- yes, from a different angle? And can you also give a bit of guidance on what we can expect for R&D and SG&A expenditure in 2021?

Yes, absolutely. Happy to do so. The financials will be covered by Stefan. I can make a quick comment around the partnering with the activities. So obviously, we can be very selective, and we will be. That doesn't mean that we will not do deals, but we will only do very selective deals, provided the right partner and provided commercial structure. And also already last year, our collaboration with CASI was actually under that premise. So we want to find the right parties, getting the right commercial structure in place and also keep enough upside for our sales. So basically selectivity. That's the catch word there. Stefan, do you want to address the financial points that Sebastiaan had?

Yes, sure. Yes. The -- when we -- the cost, of course, that will increase over the years now. We see we had a little bit over SEK 200 million this year, for 2020, and that will increase -- yes, quite. We don't really give forecast, but we could say for the cash run is that we foresee with the use of proceeds that we have presented the expansion of the studies, the pivotal study, we would have money until, yes, end of 2024, and yes, early 2025. It depends a little bit on our plan, of course.

Okay. Great. And then if I may, regarding Fc-gamma receptor IIB in non-Hodgkin lymphoma. You previously mentioned that you would enrich for mantle cell lymphoma patients, which also were refractory to BTK inhibitors. Is this still a goal of the study, given that you experienced some difficulty in recruiting patients in so far? Or will you focus now more on follicular lymphoma?

That's still -- thank you for the question. So that's still the goal, absolutely. But we will also include or will look closer also at follicular lymphoma as well because based on the data that we have seen. But we still want to explore and we will try to push for more mantle cell lymphoma patients during the dose expansion.

Okay. And then regarding the dose escalation. Can you give some insight on how it is progressing? Do you expect that the 100-milligram cohort will be the final cohort? Or do we expect more? And then also regarding the 2 patients you earlier mentioned in the 100-milligram cohort, will you PR it separately? Or will you PR it when you have determined the recommended Phase II dose?

Yes. So starting with your last point, Sebastiaan. So obviously, what we're trying to do is not to report every patient or every second patient. So what we will do, we'll always try to make packages. So what I currently can foresee that is, one, we have the Part 2 dose that we then, at that time point, do an update. And I can't tell you right now whether the 100 mg will be the final. So what I remember that we might try 1 dose higher. But I can't tell you at the moment exactly so because we're still waiting for the data to come in.

And then my final question for Fc-gamma receptor IIB in solid tumors. We have seen for the other programs that you have generated a lot of preclinical data that actually supports the rationale. But for to Fc-gamma receptor IIB in solid tumor we have not seen that yet. Can we expect more preclinical or clinical data for Fc-gamma receptor IIB in solid tumors and then especially for 1206 at conferences or in the lymphoma publications of some sort?

Yes. So what I can tell you, and of course, it's always difficult to promise when it comes in, but we're trying to make a very nice high-intent publication around the mode of action of Fc-gamma receptor IIB in solid tumors. In any case, we will have an update at the end of the year regarding the clinical program. And then we might include there also some updates around the mode of action. So the only thing that I can tell you at the moment is that, obviously, we got Merck on board. They have seen all the data that, of course, doesn't help you much because I know everybody is keen. But we decided basically to keep the data such that we can do an high-impact publications. And that, of course, did not stop us to move ahead with the clinical trial in any way. So yes, in summary, so hopefully, we'll have some publication around the mode of action soon. That's the piece that we're trying to get into pace. And in any way, there will be an update at the end of this year around the clinical trial. And then depending on what has happened in between, we also give some more ideas around the mode of action at that time point. So probably might do something similar to what we have done for non-Hodgkin lymphoma study.

Our next question comes from Dan Akschuti from Pareto Securities.

Can you hear me? Hello?

Yes, we can, Dan.

Yes, perfect. Just regarding the increase in interest from specialist investors that we have seen since last year, now this year, could you maybe shed some light on what they see specifically or what they like the most about BioInvent? And also, what are they bringing to the company besides capital?

Yes. Okay. I'm happy to do that. So obviously, what they see is a very interesting package. So I think all of them are not only interested specifically in 1 program, but they can clearly see that we're building a portfolio, which I think is good for the reasons that I already have mentioned. And then, of course, they can see that we have a fully integrated discovery engine, which splits out those clinical development opportunities. And I think combined with the manufacturing capabilities that we have become a powerhouse of generating new treatment modalities and testing them in the clinic. So I think that's probably what triggered their interest. And then basically, all the programs that we have there based on high-class work on science. So for all the problems that we have, we are first and best-in-class, which, of course, also has a certain risk profile. But since we have then those multiple shots on goals, I think it's nicely balanced. And I think it is this package which triggers the interest of those specialist investors because they know as good as we know and everybody in the field that good preclinical data and good science is a good starting point, but is no guarantee for good clinical data. So therefore, we need multiple shots on both. And obviously, what we have been thriving for is not only the money, but also high quality investors, who can basically support us regarding the further development of the company because that would be the next step to being more professional, not only to accelerate and to push and deliver but also to ensure that we basically -- we do deliver the highest quality. And then, of course, they also provide the network and have also very deep insight into the science. They would know exactly what is going on in competing programs. And that is, of course, also quite helpful to get their perspective on that as well.

Makes sense. Another question is on, now you have a bit more of funds than before, and you also mentioned that you would like to expand some of the programs in light of personalized medicine. Do you consider a combination of similar maybe as with the Transgene collaboration where you also include TNFR2 antibody, for instance, for a specific indication? Are you looking in the -- into such kind of expansions of your portfolio?

Yes. So basically, what we are basically ensuring is that, first of all, that since we already have a broad portfolio, that we ensure that we move that ahead as diligent and as quickly as possible, but also with the shear focus on quality because it's not only speed but also the quality of the data that you deliver. And in that sense, we now can do things, as Stefan mentioned, for the indolent non-Hodgkin lymphoma getting prepared for potential pivotal study, which obviously will be data-dependent decision. But then also in the other studies, we might include additional cohorts in other interesting indications or in order to ensure that we move quickly. And then in some cases, we do think sequentially that we now can do a little more in parallel. And then -- and that is basically all in order to ensure that the current portfolio as I presented it today will move ahead as good as possible. And then on top of that, it's exactly what you say. And that's something that we already have initiated actually before we even implemented the financing. We're always in the lookout for combinations. And I think a good example for that is the oncolytic virus program that we run in collaboration with Transgene. And we're looking into other possibilities in order to make sure that -- and especially oncolytic virus is actually quite interesting, what you can do there. If you have the right platform because you can incorporate quite interesting antibodies. And we are currently, as we are speaking, evaluating other combinations as well, absolutely.

Okay. And now with all the capital and clinical trials and expansion of those trials, I guess we can expect that the clinical team will be increased and also maybe the amount of centers if you identified other high-quality centers around the world to kind of accelerate the trials?

So the -- that's what I call with making the company more professional. So that process already has started. So obviously, we need more heads, more hands, and that is already in process, and it was already started before we even thought about this new fundraising that we just implemented during tonight. And then clinical centers, yes, that's always something that you look at. But again, also, it has to be done very selective. So it's not that you just say, okay, now I have a lot of money, and I get a lot of other clinical centers on board. That doesn't help either. So it will be a very selective case-by-case process, but now we have the flexibility to be -- to add on where it makes sense to add on, absolutely.