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

Hello and welcome to BioInvent Q3 Report 2022. Throughout the call, all participants will be on listen-only mode and afterwards there will be an opportunity to ask questions. [Operator Instructions] Today I am pleased to present CEO Martin Welschof and CFO Stefan Ericsson. Please go ahead.

Thank you very much, and welcome, everybody, to our call, and I will jump right into the presentation. So on Slide 3, we have summarized the events during the third quarter, and we had actually quite some things. So we did successfully a directed share issue of approximately SEK 300 million. We added 2 new members to the Board: Natalie Burner of Redmile and Nanna Luneborg from Forbion. They were elected as new Board members of BioInvent. And then we received also an upfront payment of USD 25 million from the option and license agreement with Exelixis. Then also we pushed ahead with our clinical program. So we have the first patient enrolled in the Phase I/IIa, evaluating our second [indiscernible] for the treatment of HER2 positive solid tumors. We also completed, as planned, the dose escalation in the Phase I/IIa trial of BI-1808, which is our first and lead antibody against TNF receptor 2 and we test this in advanced malignancies. And then also, we're very happy that we could move ahead with our first patient of BI-1206 in China. So together with our collaborator, Cardi Pharmaceuticals, [ we basically started the clinical trial focusing on relapsed and refractory non-Hodgkin lymphoma in China. So on the following slides, I will basically cover the programs, give you a short status and then at the end, also an outlook of the news flow to come. So our lead is BI-1206, ] which we are developing for the treatment of Hodgkin's lymphoma and solid tumors. And we try to reestablish the clinical effect of existing cancer treatment, such as rituximab for [ follicular ] lymphoma and pembrolizumab for solid cancer. We have 2 separate clinical Phase I/IIa trials ongoing, one for Non-Hodgkin and then the other one for a number of different solid tumors. And in the boxes at the bottom of this slide is the current status. So with 1206 in Non-Hodgkin lymphoma, we had first positive data during the dose escalation, and we'll come back to that a little bit more in detail later, and we're now moving into the expansion phase. And for 1206 in solid tumors in combination with pembrolizumab, we obtained early signs of efficacy during the dose escalation and the dose escalation study is still ongoing. So on this Slide 5, we have then summarized the status of 1206 in Non-Hodgkin Lymphoma. That's based on the result of Q4 2021. So the combination with rituximab has demonstrated a nice objective response above 50%. And we are particularly proud or excited, I should say, about the complete responses that we have seen. So we've seen 3 complete responses, 4 partial responses and especially the complete responses are very long-lasting, high-quality complete responses. So as you can see here, we have long-lasting, complete response beyond 12 months, 24 months and 36 months in 3 patients, which means for the longer complete responses, this is 2 years after the end of treatment with 1206 in combination with rituximab, which is very exciting. Those patients, obviously, needless to say, had progress after produce reduction of containing treatments with BI-1206. And in addition, BI-1206 has a very good safety profile. We position it as a key free therapy and targeting patients with high unmet need that could not tolerate any toxicity. We had some infusion-related reactions, but we could manage them with a novel steroid regimen that we have developed at BioInvent. So all in all, we can say that BI-1206 shows a highly promising response rate in patients with a high medical need. So here on this slide, you see the key milestones listed. So we have selected the dose for Part 2. We had a successful constructive end of Phase I meeting with the FDA. And as already mentioned, we have [ start things ] from China and our global clinical development strategy and that is also running quite well. And on the lower part, you see what is next, and I didn't mention it on the summary slide. So we have started actually early last year to develop our own subcutaneous formulation for BI-1206, and that is ready now to go into the clinic during the end of this year. Then a quick summary also for BI-1206 in solid tumors, also based on the latest result Q4 2021. As I already mentioned, we had early observations that we may reverse metastatic disease progression in patients who have previously progressed on PD-1 and PD-L1 containing therapies. So far, we had 11 patients and 3 dose cohorts that we have treated with BI-1206 in combination with pembrolizumab and we have observed positive responses in 2 patients. Here also, we had to control the infusion-related reactions. But other than that, we didn't have any major safety concerns and the dose escalation will continue. So the current patient cohort is dosed at 2 milligrams per kilogram. And then at the bottom, on the bottom of this slide, you see what is next. So obviously, we are about to determine the recommended Phase II dose and then we'll also introduce the subcutaneous formulation and that will happen first half of next year. Then I would like to cover briefly our second anti-[indiscernible] antibody, which is BI-1607 and we are going to develop or have started to develop this for the treatment of solid tumors. The difference between 1607 and 1206 is basically that 1607 has been engineered for redeemed Fc binding, which results in a different mode of action. And the first immune clinical trial, a Phase I/IIa study is ongoing since July this year. The Part 1 of the study will evaluate 1607 in combination with trastuzumab for the treatment of HER2 positive advanced or metastatic solid tumors. And the Phase I part will run in Spain, U.K., Germany and the U.S. And then during the Phase IIa part, we aim to recruit about 30 patients in 2 cohorts, 15 patients each, 1 cohort in breast and 1 cohort in gastric and gastroesophageal cancer. So this has been started this summer and is ongoing and is continuing very well. Then coming to 1808, which is our lead Anti-TNFR2 antibody for the treatment of different solid cancers and one actually liquid cancer as well. And as you might remember, since we observed a strong single-agent activity, but also very good synergies between 1808 and pembrolizumab, we are testing both. And on the left-hand side, you see the dose escalation Part A which has been finished, 25 up to 675 milligrams where we have tested BI-1808 as a single agent, and we have decided now we'll have a summary. On the next slide, on higher dose, and I come back to that. But once we have finished the dose escalation for the total or the complete dose escalation for Part A, then we'll move into the expansion, and we will focus on non-small cell lung cancer, ovarian cancer and CTCL, which is a rare T cell lymphoma. We have picked up already the dose escalation for Part B, the combination with pembrolizumab and that will be then tested in those 2 different dose expansion cohorts, one for non-small cell lung cancer and the other one for ovarian cancer. So here, you see the summary, and that's based on the latest readout Q3 this year. So as I already mentioned on the previous slide, so the single-agent dose escalation has been completed. We could show that 1808 is safe, well tolerated, no serious adverse events. And since we have this very positive safety and tolerability profile, we will explore higher doses and the next dose level is 1,000 milligrams as already indicated in the previous slide. During the dose escalation, we have seen 3 disease stabilizations and we have a very nice correlation between dose receptor occupancy and soluble TNF Receptor 2 in patients in the ongoing Phase I/IIa clinical trial. The cohort to explore potential synergistic activity in combination with Keytruda, pembrolizumab is now enrolling patients, as already mentioned. So the next step here would be to determine the recommended Phase II dose as a single agent as well as a combination. Then last but not least, BT-001, which is our 50-50 joint venture with Transgene. This is the oncolytic virus armed with anti-CTLA-4. And the virus platform is from Transgene and the anti-CTLA-4 antibodies our proprietary anti-CCR4 antibody. And we're currently in Part A, where we test single-agent BT-001 intratumoral administration at ascending doses, and I'll come back to the data -- the summary of the data a little bit later on the next slide. Once we have done that, we go on to the Part B, which is the intratumoral administration in combination with pembrolizumab. So the summary. So in June this year, we announced good progress and safety data in the ongoing trial, evaluating BT-001 in patients with solid tumors, including melanoma, and the initial data from the Phase I Part A has demonstrated the BT-001 alone is [indiscernible] [ well tolerated with first signs of anti-coactivity in a hard-to-treat population, ] and confirmed the mechanism of action of BT-001 as a single agent. And the initial findings are as follows. [ So we could detect the virus in the tumor several days after administration, which suggests that ] BI-001 is able to persist and replicate within tumors. The expression of anti-CTLA-4 observed in the tumor, there's no detectable systemic exposure. It's exactly what we wanted. That's why we went for this approach because we wanted to have a high concentration of anti-CTLA-4 only in the solid tumor environment, but not in the blood. So we didn't see any spreading in blood or biological fluids and which suggest indeed a high tumor specificity, as I already have said. And we observed tumor shrinkage in one of the patients in the first cohort. So the next steps are to complete this Part A, which is the single-agent dose escalation of the Phase I and then move to this Phase I Part B, which then would be the combination of BT-001 with pembrolizumab. So I think those were the overviews that I wanted to provide, and I hand over to Stefan to go briefly over the financials.

Thanks. I will present the financial overview for Q3 and 9 months period January to September. All amounts are in SEK million unless otherwise stated. Net sales were SEK 17.9 million in Q3 2022 compared to SEK 3 million in Q3 2021. That's SEK 15 million higher in 2022. And the increase is related to the revenues from production of antibodies for customers was SEK 11 million higher in 2022. And also, we had research funding in 2022, SEK 4 million. Net sales for January to September 2022 were SEK 305.5 million. For the same period in 2021, we had net sales of SEK 14.5 million, that's an increase of SEK 291 million. The increase is related to that we in 2022, received an upfront payment of $25 million when we signed an agreement with Exelixis. We also received a EUR 25 million from Bayer. And the increase in 2022 is also related to that revenue from production of antibodies for customers. It was SEK 26 million higher, and we also had some research fund. When it comes to operating costs, they increased from SEK 65.4 million in Q3 2021 to SEK 87.1 million in Q3 2022. That's an increase of SEK 22 million. we had quite higher costs in BI-1910 and somewhat higher cost in BI-1206 and also somewhat higher costs in -- for production of antibodies for customers. And we added quite higher cost [indiscernible] . For January to September, the increase of operating cost was SEK 64 million from SEK 214 million to SEK 277 million. During the period, we had quite higher cost in BI-1910, BI-1607 and also higher costs for production of antibodies for customers and also had somewhat higher costs in BI-1808. And we had quite a lower cost in BI-1206. And finally personnel costs were quite higher compared to 2021. The loss for Q3 2022 was minus SEK 63.9 million, and we had a profit from January to September 2022 of SEK 35.8 million. The share issue completed in July amounted to SEK 299 million before issue costs. And finally, liquid funds, current and long-term investments end of September amounted to in total SEK 1.664 billion. That was my summary.

Thank you, Stefan. Then I would like to end the presentation with brief overview regarding the key milestones for next year and I will start on the top. So basically, what will happen during the first half of 2023. So first of all, BI-1206 plus rituximab, we'll have preliminary results from the Phase I subcutaneous -- and then also during the first half of 2023, we'll start the Phase I subcutaneous for BI-1206 in combination with pembroizumab. Then also during the first half of next year, BI-1808 as a single agent we'll have first results there as well. and then we will kick off BT-001, the combination with Keytruda that will also heighten first half of next year. Then during the second half, we have 3 key milestones. So one is BI-1808 plus pembro, preliminary results of the Phase I, and then also preliminary results of the Phase I for BI-1607 plus trastuzumab. And then last but not least, we will also kick off our second anti-TNF Receptor 2, which is BI-1910 that will also start or happen during the second half of next year, which will be the initiation of a Phase I/IIa clinical trial. So I will end my presentation here and give back to the operator, I'll hand back to the operator for questions. Thank you very much.

[Operator Instructions] And our first question comes from the line of Richard Ramanius from Redeye.

I had a first question about recruitment. Do you have any issues with recruitment rate or everything going smooth? Or do you see any different interest between your indications?

Yes. So in principle, hi Richard -- in principle, I would say, recruitment is going well according to the area. So as you could see, for instance, for 1808. There we exactly finished the dose escalation as planned, no problems at all. For 1206, we had a little bit of a delay because it's a much more competitive area. And there's a lot of late-stage clinical development, specifically for non-Hodgkin lymphoma, not so much for the solid cancer ongoing and then that could impact or have an impact on your recruitment. But I would say, all in all, so far, for the different clinical programs, recruitment is going as planned, more or less.

And also sir, thinking about your subcutaneous formulation. Could you tell us how the regulatory development looks like? Will you -- and how will it be used with the intravenous formulation?

Yes. So basically, what we're doing. So as I said in my presentation, so we will introduce -- or will start clinical development for the subcu this year. And it will be a very short dose escalation. We have discussed, obviously, with the regulatory authorities, there should be no problem. And we've got only positive feedback. And then as mentioned on the news flow slide, it will start to produce data already during next year for the non-Hodgkin lymphoma and we will update the market about this. That was during the first half, and then we'll start a little bit later with the solid cancer. And obviously, the combination for the non-Hodgkin lymphoma is rather simple because rituximab and probably also other versions of anti-CD20 are available subcutaneously. But since we develop it in combination with rituximab, so we will use, obviously, rituximab. And for the solid cancer, I know that there's also -- that has been started to develop a subcu for pembrolizumab. And then once this is available, we'll combine those 2. And of course, this is much easier. So first of all, we do this for 2 reasons. So first of all, I think it's a much better product because you're independent from transfusion centers. Secondly, since we have seen preclinically, we might eliminate the steroid treatment that we have implemented in order to control the infusion-related reactions with the IV because preclinically, we see we probably don't need it for subcu and that will, of course, make life much easier and much more convenient.

Okay. Make sense. Last question also about BI-1206. Can you give any more details about the Phase II design that you discussed with the FDA?