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

Welcome to the BioInvent Q4 Report Conference Call. [Operator Instructions] Now, I will hand the conference over to the speaker CEO, Martin Welschof; CFO, Stefan Ericsson. Please go ahead.

Thank you very much and welcome everybody to our call and we'll right jump into the first slide. So you see, Martin Welschof, the CEO and Stefan Ericsson, CFO. So our forward-looking statements and then the summary. So basically, I just want to go briefly through the events during the fourth quarter. So we started our Phase I trial with the subcutaneous formulation of BI-1206. Then we received notice of allowance in the U.S. for a quite important patent covering BI-1206 and BI-1607. And then as I will show you later, we have strong progress in clinical and preclinical projects. So our pipeline is growing basically forward as projected and planned and that was also covered during our R&D Day that we had in December 2022 in Stockholm. And then the other thing that we also were quite proud about was that BioInvent and Transgene had a joint paper on BT-001, which is our joint collaboration. We won the JITC Best Oncolytic and Local Immunotherapy Paper Award for 2022. And then we also received, last but not least, IND FDA approval for the anti-FcyRIIB antibody our second candidate, which is BI-1607. Then we had an event after the end of the period and that was that we were -- have been selected by the Leukemia & Lymphoma Society Therapy Acceleration program and received $3 million strategic equity investment and I want to elaborate on that a little bit more on the next slide. So obviously, it's nice to receive that recognition and the money. But I think what is really important that this collaboration or this organization will collaborate with us very closely and make sure that we advance as we have planned, getting context with the right side to the right network. And this is really endorsing mainly our main program, our lead program BI-1206. So -- not the Leukemia & Lymphoma society really got the very unique positioning that we have for BI-1206. And then, of course, they are also quite interested in the application of 1808 in cutaneous T-cell lymphoma. So we are quite proud about this. There was a quite detailed due diligence that we have done on those 2 programs. And we feel that this is a very important external validation and will also help us to progress our clinical development in those 2 areas significantly. So then I will go basically quickly over the program. So as you know, we have started our subcutaneous formulation, clinical development for BI-1206 as planned. And just to remind you, see in the bottom of this slide that we have very impressive early efficacy data, especially long-lasting complete responses that are still ongoing and a couple of partial responses, so a nice overall response, but we were mostly impressed by the long-lasting complete responses. And as you might remember, so we had some infusion-related reactions associated with BI-1206, which we could control with steroid treatment and split dosing. And then also we basically preclinically checked a subcutaneous formulation that we developed in-house and could see that we -- with the subcutaneous formulation preclinically could eliminate those infusion-related reactions completely, which means that we basically started to develop this early last year and put it into the clinic end of last year, which is quite quick. And also is a nice showcase for the competitive advantage that we have not only research and discovery, clinical development, but also manufacturing all under one roof. So this is going very, very well with the dose escalation and we hope to have the first data as outlined and I come back to the key milestones later during the first half of this year. Then just to summarize what we have achieved with BI-1206 and non-Hodgkin lymphoma. So the key milestones are listed here. So we selected the dose for Part 2, this is for the IV. We had end of Phase I meeting with the FDA, which was successful. We started also to include China in our global clinical development strategy and started to recruit diverse patients there. And then as already mentioned in more detail, we have developed our own subcu formulation and that is running in the clinic nicely since the end of last year. Then moving to the next program, which is BI-1206, but now in combination with pembrolizumab for solid cancers. And you would remember that they are still in dose escalation. We had some early observations that would indicate that 1206 with pembro may reverse metastatic disease progression in patients who have previously progressed on PD-1 or anti-PD-L1 therapies and we have 2 published responders and that is also nicely progressing. And so you can see here, we're still in dose escalation and then we plan once we are in dose expansion to go for non-small cell lung cancer, metastatic melanoma and other tumor types. Also for this study, once we step the subcu, we'll also enroll the subcu formulation of 1206 in the combination with pembrolizumab. Then the next program is 1607. So 1607 is our second anti-FcyRIIB program, which is basically a modification of 1206. So it has one amino acid mutation actually, which makes it Fc silent. We started last summer with an open label clinical trial in combination with trastuzumab. This is also evolving nicely and they're currently enrolling patients in Europe. And also as I already mentioned, we have an FDA IND approval since November 2022. And this data for this study, the first data actually should be available during the second half of this year. So then 1808, our lead TNF receptor 2 program that we run as a single agent, as well as in combination with pembrolizumab. We're currently enrolling patients. The Phase I Part A planned dose escalation has been completed. We have decided, as we already communicated during the R&D meeting in December, to go one dose higher, 1,000 milligram. This dose cohort is ongoing. And also we have fit of the Part D combination, that means 1808 in combination with pembrolizumab at the end of last year. We will certainly be observed already some responses. So we had 3 stable disease and one very interesting non-small cell lung cancer patient, where you could see 20% tumor reduction. We didn't have any safety tolerability issues, so this is running as planned. And the next milestones and I will summarize at the end all the milestones again will be for the single agent during the first half of this year, the first data set and then for the combination during the second half obviously. Continuing to the next program, last but not least, our collaboration joint venture with Transgene, just to remind everybody. So this is our proprietary anti-CTLA-4 antibody combined with the oncolytic virus platform of Transgene. We have -- we're running it currently as a single agent, BT-001 antitumoral administration at ascending doses. We reserved some responses, so we had initial data from Part A, basically we're showing that BT-001 is well tolerated. And as I said, we have first signs of anti-tumor activity in a hard-to-treat patient population and we confirm the mode of action for BT-001 as a single agent. The next step there will be then combining it also with pembrolizumab. And this -- there's an update, so we were hoping to start during the first half of this year, but that will move into the second half of this year. So I think that leads then over to the financials and I hand over to Stefan.

Thank you. I will present the financial overview for Q4 and the 12 months period, January to December. All amounts are in SEK million unless otherwise stated. Net sales were SEK 20.6 million in Q4 2022 compared to SEK 4.9 million in Q4 2021, that's SEK 16 million higher in 2022. The increase is related to the revenues from production of antibodies for customers was SEK 7 million higher in 2022 and also there was research funding in 2022, which amounted to SEK 9 million. Net sales for January to December 2022 were SEK 326.1 million for the same period in 2021, net sales were SEK 19.4 million. That's an increase of SEK 307 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 EUR 0.5 million milestone from payer. The increase in 2022 is also related to that revenue from production of antibodies for customers was SEK 33 million higher. There was also research funding in 2022, which amounted to SEK [ 13 ] million. Operating costs increased from SEK 84 million in Q4, 2021 to SEK 100 million in Q4 2022. That's an increase of SEK 16 million. We had somewhat higher costs in BI-1910 and for production of antibodies for customers. We had somewhat lower cost in BI-1607 and we had quite higher personnel costs in Q4 2022. For January to December, the increase of operating cost was SEK 79 million from SEK 298 million in 2021 to SEK 377 million in 2022. During the period, we had quite higher cost in BI-1910, BI-1607 and higher cost for production of antibodies for customers and we also had somewhat higher cost in BI-1808. We had quite lower cost in [ BI-1206 ] and personnel costs were quite higher compared to 2021. The loss for Q4 2022 was minus SEK 78.3 million and we had a loss for January to December 2022 of SEK 42.5 million. The share issue completed in July amounted to SEK 299 million before issue expense. And liquid funds currently long-term investments end of December amounted to a total of SEK 1.594 billion.

Okay. Thank you, Stefan. That leads me to our last slide in the presentation. And as I already mentioned at the beginning, so I just want to summarize the key milestones for this year. I mentioned them already when we were talking or discussing the various programs, but I'm summarizing those here again. So as already mentioned, so we are expecting the first results for the Phase 1 subcutaneous 1206 in combination with rituximab during the first half of this year. And then also as mentioned, we will start the Phase 1 on subcu for 1206 and pembro also during the first half. And I think that is quite important in the context of infusion-related reactions, but not only because, of course, it's also a much more interesting product because much more easy to handle and to apply. Then on our TNF Receptor 2 program, 1808. So there, we expect the first data set as a single agent during the first half of this year. And then we have a couple of milestones coming up during the second half. I mentioned already that BT-001, this is shifting from first half to second half, the combination study to be kicked off with Keytruda. And then there are 2 more data sets that we are expecting. So 1808 in combination with pembro that should be also during the second half. And then 1607, our second anti-FcyRIIB program in combination with trastuzumab, that we also expect the first data set during the second half of this year. Then I did mention 1910. So this is our second anti-TNF receptor 2 program and this is planned to be started the clinical development also during the second half of this year. And you can see how we approach and this is due also to our platform, how we discover targets in antibodies. So normally would not have one candidate, but we have several candidates per target. Normally, we're not choosing them all, but that's the case. And that's why we can really build then platforms around the targets because then we not only have one from [indiscernible] from the 2 FcyRIIB as well as for TNF receptor 2. So I think this is the end of our presentation. Thank you very much for your attention and I think we shift over to Q&A.

[Operator Instructions] The next question comes from -- please introduce yourself.

Hello? Can you hear me?

Yes. Is that Richard?

Yes. Sorry. This is Richard Ramanius from Redeye. My first question, it was related to contract manufacturing. If you could just repeat -- did I hear you right? You had turnover SEK 33 million in 2022, is that correct?

No, we had an increase that we see what we had in -- we had SEK 52 million in manufacturing for customers in 2022, and we had SEK 19 million in 2021.

Okay. That's quite a large increase. Do you think that -- could you say anything about what you think would be a normal level? Or do you have -- typically have large variations?

They will vary over the years because we also use the capacity for our own projects. So yes.

Yes. So maybe you can also make an additional comment here, Richard. So as you would know, since now, I would say, almost 4 years, we are focusing mainly on our own pipeline portfolio that we are supporting not only with manufacturing, but I mentioned also subcutaneous formulation. So that's #1 priority. And then what we do once we -- and of course, we make a very accurate planning there. And once we know we have slots available, then slots in external. So that can vary. But I can tell you in anyway. So currently, the request or the interest is quite high. So there's a lot of companies out there that need manufacturing, such that we can easily fill the slots that we have available with external manufacturing.

Okay. But why don't you need to increase the production of antibodies in your projects going forward as you progress to the expansion cohorts, which will be larger?

Well, the production for Phase I, Phase II is no problem at all. We do that in-house. As you might remember, so we don't have the possibility to produce commercial environment. So we can do Phase II, Phase I, Phase II and Phase III, but not commercial, which means that normally, once you have done the dose expansion and you have proof-of-concept then you generate a transfer to a commercial manufacturing unit. And that's what we already prepare in parallel, for instance, for 1206.

Okay. I got it. And also I wanted to ask you about the time frame for BI-1206. Whether it has -- how much has it shifted forward due to the introduction of the subcutaneous formulation compared to the original plans?

Yes. So basically, what you can say is that those regulations for subcu is running. And as we said, we will expect that during the first half of this year, and then we move into dose expansion. So the IV, dose expansion is also open, but we don't push it because we really have the main focus on subcu. So the delay is really mainly that we have to do with the dose escalation, which is a quick one in any way, but that we have to do the dose escalation for subcu, which was, of course, not originally planned.

Yes. Okay. And my final question, which I know you got before about bispecific T cell engagers because FcyRIIB was approved in the EU this summer and now was approved in the U.S. and there are other versions as well that are very close to approval. Could you explain how do you see that affecting your potential market share in later lines of lymphoma?

Yes. So as you can see, that's why I also spent some time on the collaboration that we have now started with the Leukemia & Lymphoma Society. They're obviously very much aware what happens in non-Hodgkin's lymphoma and other liquid cancers. And they feel that we have a very unique positioning also regarding those compounds that you have said because most of them have toxic effects, which makes them very critical for second and third line patients because those are very fragile patients, and that's where we start. And then also one comment from the Leukemia & Lymphoma Society is that bispecifics and maybe also CAR Ts besides the toxicity that I've mentioned is actually not what the normal hospital would prefer. So they might run at large centers. But they feel, and that's why they came to us and endorsed us and started the collaboration gave us the money, $3 million, is that CD20-based therapy, rituximab and similar biosimilars to rituximab will remain central in non-Hodgkin's lymphoma for at least another 10 to 20 years. And that's why that we're so uniquely positioned because once we have shown in third and second line that we can not only rescue patients that do not respond anymore to CD20-based therapy but maybe also enhance on that, then we can also move to first line. So to come a long story short, yes, we know it's a competitive market, but we have a super unique positioning that nobody else has. And keep in mind that the CAR T and bispecific approaches, they have a much stronger toxic profile than we have. We just have infusion-related reactions. That's why we have the subcu. They see much, much more than that. So yes, they're effective and there's approvals. But I think based on the safety profile, the unique positioning together with anti-CD20-based therapy, we feel we have clearly an edge also towards those bispecific as well as CAR T approaches.

The next question comes from number 417-98926.

Hello, can you hear me?

Yes. Is that Sebastiaan?

It's Chien-Hsun Lee from Pareto Securities. Thanks for the nice presentation, and yes, looking forward to the event for 2023. So my question is so for the subcu formulation of 1206 in solid tumor that is expected to start in the first half of the year. Could you provide more details, like will it follow the same sort of the design as in NHL?

Yes. So what we will do, so we will soon provide some -- so when we start the study, we will provide the details. So it's currently something that we keep close to our chest. So I think I would ask you for some patience. So once we start it, the study design and everything will be available.

Okay. Yes, maybe another question. So the equity investment from the Leukemia & Lymphoma Society, a trend is served as a strong validation of your technology. So I'm wondering what kind of collaboration do you expect to see in the near future?

Yes. So basically, the way that works is that they really become a part of our -- in a way, our extension of our clinical development around 1206 in non-Hodgkin's lymphoma and 1808 in CTCL. And that was already -- and I can tell you, the due diligence that they have done in those 2 areas, I have not seen any stronger due diligence or deeper due diligence before here by entering my time. So really, they looked at those 2 programs in all details on all levels. And that also will give you an indication how closely they will collaborate with us. So they really will help us with clinical sites, with key opinion leaders. We already have been brought into contact through their network to a number of interesting investigators. So their focus will be to help us as much as they can that we recruit as quickly as we can and have the best sites. So that's what they try to provide.

The next question comes from number 316-5368.

Can you hear me?

Yes, Sebastiaan. We can hear you.

So this is Sebastiaan from VLK. I had 2 on 1206 in non-Hodgkin's lymphoma. I'm wondering whether you can maybe expand on whether you expect with the subcutaneous formulation, whether that can also translate into higher efficacy compared to the IV formulation in non-Hodgkin's lymphoma? And then a second one would be, I think that you just mentioned that we expect first dose escalation data in H1 and then continuation of the dose expansion. I expect that you would only continue with dose expansion with the subcu formulation. Can we already expect that in H2 '23? And then a final question is regarding R&D expense and SG&A expense in 2023? Will that be in line with -- of 2022?

Very good. So I try to remember. So you were asking, yes. Now I remember what your first question was. So this is Martin, obviously. So yes, I think there's a possibility, obviously, keep in mind that the response that we have seen were already at relatively low doses. So I don't have them all in front of me. So we saw good response already lower. We have picked 100 mg as a dose of Part 2 for the IV, but what we will do, we hope, let's put it that way, we hope that with a subcu that we can go higher and we'll do that, we will explore that and see whether that has an influence, let's put it that way. What we expect, I don't know, we'll see, but we will anyway use the subcutaneous formulation also to go to higher doses. Yes. Then your second question was also related to dose expansion, IV and dose expansion subcu.

Yes, more to timings of the effective marketing. Sorry to interrupt.

Yes, no problem. So the -- currently, as I already mentioned during the presentation, both IV arm, so 1206 in combination with rituximab and 1206 in combination with pembrolizumab are both open. So we continue and we can still include patients, but obviously, our push and our emphasis on subcu for all the reasons that we already have discussed. And then the idea would be really once we can -- we know that we see the same efficacy, got completely rid of the infusion-related reactions, then we will push ahead with subcu only. And the timing, I'm not 100% sure about, but as quickly as possible, so you can extrapolate a little bit. So we expect the first data set or have basically more or less finished and have the first data set for the escalation during the first half of this year. And then there might be some times that you will have to do further analysis and waiting time. And then we will move into the dose expansion right thereafter. But that's a little bit fluent at the moment because it will really depend on this data set that we are currently generating in the dose escalation, but we want to move it ASAP, basically.

Yes. Got it. And then is the expectation also that dose escalation will be faster with the subcu formulation compared to what we have seen before with the IV formulation?

Yes. Because we have to be quite careful with dosing in IV because we hadn't related even though we could control it with steroid treatment and with split dosing, which was quite successful, but it was still there once in a while. So we were very careful, and that's why we didn't push it. So once we know we have something and also the investigators know we have something that this eliminates completely and also it's much more easy to apply, then it should be quicker, yes, and especially also with the help of LLS, the Leukemia & Lymphoma Society.

Okay. Got it. And then the final question was on R&D expenses and SG&A expenses in 2023?

Yes. I can comment on that one. We had in operating costs last year, 2022, SEK 377 million. And with 206 clinical programs running, costs will increase, of course. We don't really give a forecast for that. But what we can say, as we said before, we will have refinanced until the end of 2025 as it looks like now.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. Thank you very much, everybody, for listening in and also for the questions. I think in summary, as you can look at BioInvent, so we are a fully integrated company with target discovery, antibody discovery, cell and generation capability, manufacturing and clinical development, well-funded with first-in-class compounds currently from 5 clinical trials running and at the end, hopefully, 6 as planned. And looking into this year, we mentioned that we will have first data sets, mainly dose escalation. Still that will be an early glimpse into the potential of our portfolio. And then obviously, 2024 will be more interesting because then we move into -- deeper into Phase II with the first program. So I think a very exciting time ahead. And as Stefan said, well-funded in order to take off those value inflection milestones. So again, thank you very much for your attention. And with this, I close the meeting. Bye-bye.