Biovica International AB (publ) (BIOVICB) Earnings Call Transcript & Summary

Welcome to the Biovica International Audiocast Teleconference Q1 2021 to 2022. [Operator Instructions] Today, I am pleased to present CEO, Anders Rylander; and CFO, Cecilia Driving. Please begin your meeting.

Thank you very much, and hello, everyone. If we move directly to Slide 2. My name is Anders Rylander, and together with me, I have...

Cecilia Driving.

And we are going to present our interim report for the first quarter as our fiscal year starts 1st of May. And if we move to the next slide, we have the agenda. I will first go through just a short introduction to Biovica as a company and our business plan. Then I'll talk through the highlights for the first quarter. And then Cecilia will talk about the financial status, before I make a summary and we open up for questions. So let's move to the next slide. And just a short background about the company Biovica. It's an Uppsala-based company that spans from the academic research that's been going on for many years within this field. And the focus for the company is to develop blood-based biomarker assays in the field of cell proliferation. And the purpose for doing so is to improve monitoring of cancer treatment in order for improved patient outcome and also health economics for payers. We're based in Uppsala and has a subsidiary in U.S. in Boston. The product is kind of CE mark, and we are working towards developing an FDA-approved version of the product for launch in the U.S., which we'll talk a bit more about. So if we move to the next one. We have an overview of how it works. And as you know, cancer is defined as uncontrolled cell proliferation. And that is also what we are able with our product, DiviTum, which stands for dividing tumor, are able to measure from a blood sample. So we're measuring how the tumor proliferates, how the cancer is growing. And this is essentially an important information for the treating physician, both as prognostic before treatment to assess the aggressiveness of the disease, but also during treatment to be able to monitor efficiently get feedback if the treatment is effective or not. The standard method being used today are image diagnostics where a snapshot of an image of the tumor or tumors in the metastatic setting are taken and from that the size of the tumor is measured and during treatment, additional images are taken and size measured again and assessment is made if the tumor is growing or not. That requires a couple of months to be able to follow up and then also patient logistics and it's invasive. So we're confident that we have a complementary method that offers advantages both for patients and for health care providers. And that has also been proven in quite significant amount of clinical trials. We have now 24 published clinical trials from collaborating partners, the big academic centers around the world, especially within breast cancer, where the majority of the data accessed. And that is also our initial application that we are working to launch in the U.S. after a regulatory approval. Moving on to the next one. We have a summary of the highlights of this first quarter. And one highlight is the budget impact model that was presented in a conference in May called ISPOR. That conference is targeted against health economics. And that is, of course, also an important area for us, and it's closely related to getting reimbursement for the product, getting paid for the product, which is, of course, essential. And the way we have done this is that we have worked with the academic researchers that has taken the clinical results for the product within the breast cancer area and modeled, which help economic impact, the product DiviTum can have based on how it will affect diagnostics and treatment costs within breast cancer. And both diagnostics and treatment costs are expensive or high in this area. So improvements makes up for a very strong health economic business case as treatments are priced at over $10,000 per month and patient. The result and conclusion of this that was presented was that for every dollar invested in dividend, the payers have $3 in return in savings in diagnostics and [ fever-type ] treatment cost. So that was a very positive start for the next step, which was and is still payer discussions, which was kicked off with the Payer Advisory Board, where we had a very positive discussion and presented these results, and that will continue going forward. So that was important highlight. Another highlight is that we presented our plan how to expand outside of the breast cancer area. And one of the areas that we defined as interesting to expand into based on the analysis that we have done for unmet need and the market potential was the metastatic melanoma area. And at the ASCO meeting in June, we presented our first results from a collaboration with Karolinska within this area, where patients with metastatic malignant melanoma were treated with immunotherapies and were followed -- monitored with DiviTum. And it was a positive outcome of that trial, and that was also a starting point for expanding into that area as well as lung cancer and metastatic prostate cancer, which are additional areas that we have defined as areas we would like to expand into. After the end of the period, we have continued in strengthening our management team, especially within the commercial area. And if you move to the next slide, I have a picture of the 2 most recent recruitments, both within the commercial area and the most recent one was Warren Cresswell in the U.S. and Warren will be present -- will be responsible for the commercialization activities in U.S. and Americas in general. And he's part of the management team, of course, and he has a really attractive background with a lot of experience of building successful commercial organizations within this field of diagnostics and oncology and also in U.S., which means that he's both have a network within the business and an understanding of the somewhat complex reimbursement system. So that's a great addition to the team. And that also frees up time for Robert Dann, who now will focus on his core skill, which is marketing of the product. So very glad for that. And also Helle Fisker, who has the commercial responsibility for Europe, who also have a similar background with a lot of leadership roles, both within sales and marketing within diagnostics and within oncology. So also a very important addition to the team and also part of the management team. Very happy with that. Okay. Moving on to the next one. As an update of the FDA process, we are looking to get a so-called 510(k) regulatory approval, which will enable us to market and sell the product for clinical use on the important U.S. market. This is a product -- process that we have been working with for years. We started actually in 2017 when we had our first meeting with the FDA when we presented our intended use and received feedback both on what type of predicate device the FDA recommended and also how we should validate the assay, both from an analytical, which is performance-wise and a clinical standpoint. Since then, we have worked hard in order to generate this data according to what we agreed initially with the FDA. We've had additional meetings as well to drill down to even more into detail within these areas. And in September last year, 2020, we finally submitted our application with all the data from all the experiments with them, including a clinical trial also together with U.S. SWOG group with almost 400 patients. So significant data were submitted. And we quickly passed the 2 first milestone in the FDA process and went into the substantive review phase. However, at that point, the FDA announced that all non-COVID applications was put on hold, including ours since the FDA prioritized COVID tests. However, we were lucky that in January this year, our submission was one of the first to be restarted, and the review of it started early February. We came back with some initial -- responded to some additional questions and then nothing really happened until end of May. But since the end of May, we've been working intensively with the FDA. We received a lot of feedback, which we methodically have worked through together with the FDA in a so-called SIR process, where the FDA gathers all their different experts, and we've got some excellent feedback that we can work with during the summer and now during August. So we have been able to complete all the experiments that we were required to do to generate some additional complementary data. And we're putting this together in an updated response, which we'll submit during the beginning here of September, the first half of September. And we expect to see feedback from the FDA a couple of weeks after that submission, which granted that they are able to follow their normal process, which we hope they will. And the expected outcome from that submission, we can see 2 possible outcomes: one is, of course, which we hope is clearance, 510(k) clearance; and the other one is that we are required to answer more question or provide more data. And hopefully, we'll do that like we've been doing now in interactive mode. And we'll keep you updated about that. So very happy with how this has progressed over the summer. With that, I was -- that was my last update slide, and so I hand it over to Cecilia on the next one, the financials.

Thank you, Anders. And now we should focus to the financials and how this is reflected in the financials. And we start with the sales numbers on the left slide. And as Anders showed you, we are preparing for our commercial launch. And the only thing we have nowadays is research use only, and it's actually slightly more for the first quarter this year than last year. And all the efforts are on taking dividend to the clinical market in U.S. and also in Europe. And we will see more continuous sales after launch. And then now we're in the same chart and look at the cash balance. And at the end of the period, the 31st of July, we had SEK 131 million in cash. And we are well capitalized ahead of our commercialization in U.S. and Europe. Our run rate is increasing at about SEK 4 million a month during the first quarter. And going forward, this will, of course, increase because we invest in the large activities. And the cash assets are sufficient for 2 years of operation, at least, and without factoring in the expected increase in sales. And that's to talk about that. I'll hand it over to you, Anders. Thank you.

Thank you, Cecilia. Yes. And then to the last summary slide. So we have a product, which has a great potential in meeting a very important unmet need, and that's to be able to personalize treatment and monitoring -- monitoring of treatments within metastatic breast cancer to the benefit of both payers, health care providers and, of course, patients. And the foundation for our commercialization activities is the collaborations we have with the leading academic and key opinion leaders within this space, breast -- metastatic best cancer. Together with them, we have performed several clinical trials with positive outcome, and that clinical data that documentation is the base our commercialization activities. So one example is the regulatory process, but also the reimbursement and in the end to generate demand in clinical aspect. So we have a really interesting half -- second half of '21 in front of us. As I told you, we're in the late phase of our 510(k) process, which will be also the starting point for commercial launch on the U.S. market. And before end of the year, we expect also to have our first reimbursement on the U.S. market and also to launch the product on the first European country. And I'm confident that the -- if we can add value for patients and health care providers that allow to translate the value for our shareholders. Thank you very much. And we are now open for questions. Next slide, yes.

[Operator Instructions] The first question comes from Johan Unnerus from Redeye. Please go ahead, your line is open. Unnerus, we have your line open, you can ask your question please. No problem. The next question comes from the line of Jakob Lembke from ABG Sundal Collier.

So maybe first, could you update us or give a bit more flavor on the 510(k) process and perhaps what was included in the submission issue request?

Sure. Jakob, well, I don't know what -- what I can say, started the intended use. What we have communicated is that we are focused in this, 510(k). It's the monitoring of metastatic breast cancer. So the intended use is based on that. And that's also because the clinical validation trial that we're using are on patients being treated for metastatic breast cancer. So that's the starting point, and that also determines what type of devices that the FDA has recommended us to use. And so that's just to set the ground for the application as such. And when we received feedback in May, it was very detailed, so it was way past the questions of predicate device and that it was very detailed on exactly how the performance studies were done, how you should interpret the data and small, small words missing in the intended use and so on, but those small details have a lot of impact when it comes to the entire application. So yes, that's what we've been working with and updating during summer. And the risk here in the beginning of the summer, of course, we were a bit nervous because we were -- we needed to during the summer do some complementary experiments and trials. And if we wouldn't have received positive results from those, that would have delayed the process. So that's why I'm very happy now that we can look back and see that the experiments we've done has resulted well. And so we're able to keep up with the schedule that we have set out. I hope that gives you a little bit more background. You understand a little bit more what we've been up to.

Yes. That's great. And then another question. Could you maybe give an update on the partnership discussions? And if you have sort of continued since the -- what you communicated at the CMD?

Yes. Yes. So we have taken one step further in that sense that we are -- have advanced discussions into validation, so with currently 1 U.S. lab now we are in validation. So hopefully, we can, after completion of that, communicate what lab and so on. So we're taking steps further, but we don't have an agreement in place that we can communicate at this point. But we think that we're progressing. And also with the addition of Warren with his background and his network and his history as the CEO of lab, we increased our own capabilities within this space. So that is also progress, I would say.

Okay. And then my final question is a bit on Warren and the commercial organization you're building. I mean you have expanded a bit already, but did you continue to add more staff, particularly in the U.S. now going forward?

Yes. Yes. Yes, we are. We are. And so now currently, we have 3 key people over there. We have Warren responsible for the commercial activities. We have Amy Williams supporting him as a scientific director, which is a bridge to the Uppsala team, where we have the scientific competence. Amy has a very, very solid scientific background, so -- but is also contributing in the commercial work and is an excellent person in meetings with oncologists and patients and payers and so on, can explain the scientific rationale behind things. And then we have Robert as a marketing person, and we will add people competence regarding reimbursement and commercial competence as well. So we are looking to build a small but efficient U.S. organization that can complement our partners.

[Operator Instructions] We have no further questions. So I'll pass back for any closing comments.

Thank you very much for your interest and your questions. Much appreciated. And we'll keep you updated about our 510(k) processes -- process and also we'll come back with a similar presentation for our next interim report in December. Thank you.

Thank you for attending. You may now disconnect your lines.