Circio Holding ASA (CRNA) Earnings Call Transcript & Summary

Welcome to Targovax and our report and presentation of our third quarter results. My name is Erik Digman Wiklund, and I was recently appointed CEO of Targovax. So first of all, let me remind you of who we are and what we do. We are a Norway-based immuno-oncology biotech, and our focus is on developing immune activators. Our lead product candidate is called ONCOS-102. And this is a novel immune activator, which has demonstrated clinical efficacy in several hard-to-treat solid tumors. We have confirmed the mode of action of ONCOS-102 in a clinical setting and demonstrated broad and powerful immune responses that makes ONCOS-102 a very attractive combination partner for other immunotherapies in difficult to treat solid tumors. We are currently preparing for the next steps of our development program, which will be a PD-1 refractory melanoma in a broader platform trial where we are going to assess multiple combinations in parallel. ONCOS-102 is protected by both method of use and composition of matter patents, and we have orphan drug designation in 3 indications as well as 2 fast-track designations from the U.S. FDA. Looking at the third quarter, let us start with the main highlights. In terms of the scientific progress, we presented a poster at ESMO in Spain in September where we showed the data from our melanoma trial, which was recently published. We also have 2 posters accepted for presentations at SITC in -- during next week. On the patent sides, we had a patent granted in Europe for the combination of ONCOS-102 with chemotherapy and this adds additional protection beyond the ONCOS-102 and PD-1 combination patent, which we already have as well as the ONCOS-102 product patents. We have also done some additions to our senior leadership team. We announced the appointment of Dr. Lone Ottesen as our new Chief Development Officer; and Ola Melin as Head of Manufacturing. This puts us in position to deliver and execute on our late-stage development program, and both Lone and Ola have taken their positions and are settling into the roles at Targovax. In addition, after the quarter ended, I was appointed as the new CEO of the company, taking over from Oystein Soug. Oystein remains with the company as a Special Advisor and Interim CFO. In addition, we recently announced a proposed rights issue to raise NOK175 million to be approved by EGM at -- on the 25th of November. Looking at the numbers, we have good control of our cash. We have established low cash burn. We spent NOK23 million during the quarter. And of that NOK10 million or 45% are towards external R&D costs. For the year-to-date, roughly 2/3 of our expenses are R&D costs. The net change in cash was negative NOK17 million, and this leaves us with a cash position of just over NOK50 million, adding on the proposed rights issue, this would give us a cash runway until roughly the middle of 2023. So, we have a good control of our OpEx and sufficient finances available to deliver on our plans going forward. Some more highlights of the finances of the company. We had, as I said, NOK54 million in cash at the end of the third quarter. And the market cap as of market close yesterday is around NOK500 million. 30% of our shareholder base is the top -- our institutional professional investors and the main shareholder is HealthCap with a position of 14%. Top 20 shareholders hold a total of roughly 50% of the company's stock. So let us also provide an update of the recent data. Here is an overview of our clinical program of ONCOS-102. So starting from the top, our lead indication is anti-PD1 refractory melanoma. I will go through with you some updates on the results from that trial. In addition, we have a trial in mesothelioma, where we combine ONCOS-102 with chemotherapy. In this trial, we are very soon doing a 30-month follow-up, and we expect before the end of the year to be able to announce the median overall survival for this trial, which is expected to be around 2 years. We also have a trial ongoing in colorectal cancer. This is metastatic chemotherapy-resistant colorectal cancer. It's a very tough patient population. This trial is running in collaboration with Cancer Research Institute and AstraZeneca. We are combining with durvalumab, the checkpoint inhibitor AstraZeneca. And we anticipate this trial to read out in the first half of next year, and we will provide updates from that trial as the data comes in. So let us go to the melanoma results. As a reminder, we have already reported about a year ago that the overall response rate from the trial was 35%. So we had 20 patients in total in the trial, of which 7 patients had a response. These results are some of the best or most promising data presented in this indication. So recall, these patients are resistant to anti-PD1 checkpoint inhibitor therapy to get enrolled in the trial, we treat with ONCOS-102 and then put them back on the checkpoint inhibitor. So you would, as a background, expect 0% response rate here, and this is a tough to treat population. Therefore, we consider 7 out of 20 responses to be very promising for the future. And comparing to other companies that have presented data in this indication, is also is looking good. You can see on the list here, BioNTech is the closest with also showing 35% for their mRNA vaccine program in melanoma. And then the 3 to follow are Replimune, OncoSec and Checkmate, all are showing similar-ish results plus/minus 30% ORR. So we are pleased where we are at, and we are planning to move forward in this indication to solidify ONCOS-102 as a class leading agent in the PD-1 refractory melanoma setting. Let me show you a case example here. This is a patient that had a complete response, meaning the cancer completely regressed in this particular case. In the first picture on the left, you can see what the patient presents with at baseline, so day 0. Patient has this tumor on the leg. The patient is heavily pretreated, had several rounds of surgery, several types of checkpoint inhibitors as well as other therapies. And you can see in the picture already by week 3, there is a dramatic reduction in the size of the tumor. And in the first 3 weeks, we only give ONCOS-102. So this is prior to starting the checkpoint inhibitor treatment. So this is indicative of monotherapeutic activity of ONCOS-102. By week 9, then we have started the treatment with the anti-PD1 checkpoint inhibitor and Keytruda, 2 cycles of Keytruda has been given. And by that time, the patient then has a confirmed complete response. You see some coloring on the skin, but this is bruising and biopsy scarring. The complete response lasted throughout the trial and was also -- the patient was also still in response 1 year after the trial. So this was the lasting durable response in this particular case. So this is what we see macroscopically, what happens to the tumor visually. The patient clearly has clinical benefit from the treatment. But what's even more interesting is to try and understand what happens locally inside the tumor, what kind of cells do we see. So here, you are looking at biopsy slides from the tumor where we stain by collar to look for cancer cells and immune cells. And we have pictures taken at baseline, week 3, week 9. So baseline before starting treatment week 3, it's ONCOS-102 treatment only and week 9, then the patient has had 2 treatments of pembrolizumab or Keytruda as well. And the blue circles are indicative of cancer cells, so they show live cancer cells and the red dots are the color we use to stain T-cells. So T-cells are the soldiers of the immune system that are there to attack the cancer. So quite clearly, you see from baseline to week 3, and we are looking at 2 different T-cell populations, CD8 on the top, CD4+ T-cells at the bottom. You see a clear increase from baseline to week 3, driven by ONCOS-102, the T-cells are coming into the tumor. And by week 9, you now quite clearly see the morphology of the tumor is changing, Consistent with the pictures showing the tumor regressing here you see there is no live cancer cells left essentially. It's necrotic tissue. Some few cells are still around. The few T-cells are there. But as you expect, then it should go down because the tumor effectively has been dealt with. On the right-hand side, we also quantify the total slide. So the absolute number of T-cells present and again, you see when we just quantify the total signal here, a massive increase of T-cells from baseline to week 3 goes down somewhat at week 9, but this is reflective of the patient having a complete response. Now that's a case example. But this, in fact, holds true for the patients in general. It's not just a one-off. So all the patients we see generally a robust increase in T-cell infiltrate. But interestingly, this infiltrate is stronger in responders. So what I am showing you here on top, again, CD8 and on bottom the CD4 is the individual T-cell responses in each of the patients. The 3 time points you see is in gray bar baseline and then middle day week 3, and the third one is week 9. And this is grouped by response. So complete response on the very left, partial responses, stable disease in gray and then progressors in red. And the general observation is we have much more T-cells in the responders and the increase is strongest in responders. Interestingly, there is one case of a patient that has an increase in T-cells, but also is a progressing patient. And this is marked here by the gray box. And in this particular case, in fact, it was shown after the trial that this patient had what is called a pseudo-progression. It looks like the tumor is growing, but in fact, it's growing because of this massive integration of T-cells. And indeed, as the patient moved on in time, the tumor shrank and then stabilized for some time. So a particularly interesting case where we can actually show that the initial progression is merely due to immune cell infiltrate driven by ONCOS-102. The right-hand panels are averaging out per patient group by response, the total level for simpler interpretation and the message is clear. CR and PR patients, the CD8 and CD4 T-cell infiltrate goes up. The increase is less in stable disease. And when you take out this patient with a pseudo-progression, there is no change in the progressing patients. So overall, this adds the comfort level that ONCOS-102 is doing what we are saying it's doing, it has the mode of action that we propose. It drives the infiltrated T-cells, and this infiltrated T-cells correlates with the clinical outcome of the patients. Now we also have taken other types of samples and do other analyses from the patients. What we are doing or showing on this page is RNA sequencing or gene expression analysis. So previously, we are looking at the total cells that are present in the tumor. Now we are looking at the gene expression of all the cells that are present in the tumor. And what we are looking for here is to demonstrate that genes associated with an immune response are upregulated. The graph is comparing week 9 biopsy to baseline. So this is a highly complex broad data set and to simplify, we pull out this one graph for illustrative purposes. And here, we look at the delta or the change week 9 on treatment versus off-treatment baseline, and then we see what genes are changing that are relevant for an immune response. The categories on the left are then sorted by most to least change. And as expected, on the top here, you see the cytotoxicity genes. So these are genes expressed by T-cells when they are actively engaged in combat. So not surprisingly, we see the infiltrates of T-cells on the biopsy immunohistochemistry and then we confirm it with gene sequencing. Yes, these genes are upregulated. There is an active cytotoxic attack going on. So again, confirms our observations with a different method. And going down the list here, all the gene signatures that you expect to be a upregulated indeed are upregulated. Checkpoint molecules are upregulated, costimulatory molecules are upregulated. In general, adaptive immune response is activated. So we are seeing here the broad impact that the injection of ONCOS-102 has on the local microenvironment in the tumor. Another very important point to make here is that now we are at week 9. So this is -- After 6 ONCOS-102 injections overall, and we are 3 weeks after the previous ONCOS-102 injection was given. So not only do we see this type of immune response happening, we see it happening for a prolonged period of time, and still at week 9, it's ongoing. And even 3 weeks after the last time the ONCOS was injected, there is still active immune response. This shows that ONCOS-102 even after the virus may be cleared, there is a pro-inflammatory response ongoing in the tumor that enables a sustained and durable response. So this is a highly important observation. Now what I show here is just the overall patients. These are all patients, responders and non-responders. Now what happens if we look at responders versus progressors. So what I show here is the difference. It's the same gene categories now on the x-axis and then fold change on the Y-axis. The light blue is baseline, day 1, week 3, day 22 is the gray, and then the dark blue at the back is the week 9 biopsy or day 64. So what we observe here is that, one, at baseline, there is a tendency for somewhat more immune active tumors in responders than progressors, indicated by the blue lines being above 0. And at week 3, this pattern is still there, but it's less prominent. However, at week 9, you see that the change is much more clear. It's much more immune activation going on still in the responders than the progressors. So this tells us that there is a patient subset here, which is able to strengthen and sustain this immune response, and these are the patients that respond. Looking deeper, we can go and check what the expression is of particular checkpoint molecules, and these are particularly interesting because there are several drug candidates either approved or in development. So you are looking at the same thing here. The gray is day 0, then week 3 in light blue and week 9 in dark blue, and you are comparing the change in responder versus non-responder. And not surprisingly, again, we see strong up-regulation in the responders. TIGIT, a checkpoint, which is gaining increasing attention lately is the most upregulated checkpoint more than 30-fold upregulation in responders versus non-responders at week 9. CTLA 4, another checkpoint inhibitor, which is already approved in melanoma, it's close to 30-fold upregulated as well. So we see massive upregulation of important checkpoint molecules. And what this data tells us is both mechanistically what ONCOS-102 does, but it provides us with very helpful information in terms of how we plan our subsequent development, what should we be combining with in the future. Looking at this, it would be interesting to test ONCOS-102 in combination with something like an anti-TIGIT or an anti-CTLA 4 given the broad upregulation we are generating in -- of these particular checkpoints. Next page here, we are looking at something called costimulatory molecules. So this, to a degree, is the opposite of the checkpoint inhibitors. The checkpoint inhibitors are providing a break signal to the immune system to not keep attacking the tumor, whereas the costimulatory molecules are more like a gas pedal. You push them to further stimulate T-cells to deepen and expand their attack. And again, these are targets for which we have several drugs in clinical development. And as for the checkpoints, we see strong upregulation here, GITR is the most upregulated followed by OX40, 4-1BB and the ones below. So again, we see what we expect to see, and we get important information as to what we might want to combine with in the future. So now we are actively engaging in dialogue with companies that have relevant products and development that target these costimulatory molecules for a potential combination with ONCOS-102 in the future. And this is the way we plan to do this. We are setting up a platform trial, we call it. This is a multi-cohort trial in PD-1 refractory melanoma, which we then will use as a model system to assess ONCOS-102 in multiple combinations. And we do this in a step-by-step manner. So the first cohorts we will put on the trial is ONCOS-102 monotherapy, and then we will do a second cohort with ONCOS-102 plus PD-1, which is what we did in our Phase I. So then this tells us exactly what is mono, ONCOS-102 doing on itself, what are we adding by putting on the PD-1 inhibitor. And then the next step is you can see our Cohort 4, 5, 6, add-on other or third combination partners. Given what I just showed you from the gene sequencing, a very obvious candidate here is to put in an anti-CTLA 4. So CTLA 4 is also already approved as a treatment option in melanoma. We see the strong upregulation in addition, CTLA 4 aids in the priming of antitumor immune responses. So we believe putting in a combination with CTLA 4 in addition to PD-1 and ONCOS, is likely to give us more responders, deeper responses and longer-lasting responses. So the aim for this trial is to enable us to push our response rate and results beyond the 35% we have shown so far, which is already promising. And then next step beyond that is to look at the potential cohort with a costimulatory molecule, again, based on the data that I just showed you, and we are engaged in discussions to identify such potential combination partners. The idea is to get this trial started next year. We anticipate first patient to be recruited towards in the second half of the year. And as we move forward, these cohorts are designed so that we can add more cohorts as we go along and individual cohorts can form the basis for subsequent registrational trials by being expanded with more patients. So I would also like to introduce to you some of our pipeline plans. We are -- with this data in hand, we now know exactly what ONCOS-102 does inside the tumor. What happens in the patient when you give ONCOS-102. And we have all this deep data to mind, and this enables us to make novel drug ONCOS candidates for the future that exploit these activities that we have observed. So we are actively expanding our next-generation vector program. And we are, in particular, starting to develop a novel delivery system, leveraging next-generation RNA concepts. So of course, RNA has become an increasingly important drug modality with the success of the mRNA corona vaccines in terms of driving strong immune responses and also commercially. What we are looking at here is another novel type of RNA constructs, which are circular RNA. And I was actually part of the team that initially discovered the first circular RNA, and we published that about 10 years ago. And in the last 10 years, the circular RNA field has grown into a large, very interesting and innovative space that have seen very significant developments in the past decade. And this is partly driven by one of my co-authors on this original paper, Thomas Hansen, who then builds a career and published his subsequent work in Nature, as you can see here with the Nature citation. And it's also being shown that circular RNAs are highly deregulated and relevant in cancer. So we are now working on how we can leverage ONCOS as a delivery system for novel circular RNAs, and we have actually hired Thomas Hansen into the company, who will start with us from January 2022. An important development in the circular RNA space is that it has been demonstrated that you can utilize circular RNA to deliver genetic payloads and classic genes. You can effectively use them as an mRNA. And 2 companies have launched this year to do exactly this, gene therapy using circular RNA. You see the biggest picture here, a company launched by flagship and Moderna called Laronde, which raised $440 million in August. That comes in addition to another $50 million round on somewhat earlier this year, which gives them a total fundraising of $490 million, which is the biggest -- dollars, and this is the biggest Series A round done for a biotech in history. What are they going to do? Delivery of gene therapy using circular RNA. The other company listed here Orna Therapeutics, raised $100 million for a similar concept. So this is a space which is currently getting quite significant attention and attracting very significant investments from high-profile biotech specialist investors. So we are planning to move into this space, and we think we have a unique platform to build on to deliver such circular RNAs. So these other companies have concepts in order and they have the science to back that up. But what they lack is the delivery system. We have that delivery system. Our ONCOS-102 provides us with a platform where we know exactly what it does in the tumor of a patient, and we can effectively adapt this ONCOS vector to express and deliver circular RNAs. So we have a plug-and-play system to get these into patients, and we believe this provides us an advantage. And what can you use these circulars for? It's a variety of potential mechanisms that are opened up. We can express transgenes just as we are doing with ONCOS-102 already in the classic mRNA fashion. We can encode tumor antigens to stimulate a more vaccine-oriented effect. We can build in additional immunological firepower, and we can also build in interesting regulatory aspects. So we are now pushing this program forward with full speed. And in the next 12 to 18 months, we anticipate to be able to start producing data on these new pipeline assets. So in order to wrap up, I will give you a flavor of how we see the strategy for Targovax going forward. So #1, as you have seen, we have a strong and broad data package. We will let this data pack guide us. We will make smart scientifically based decisions based on what we saw in the Phase I trial. And this means both for the next step of ONCOS-102 development and also in how we design our future pipeline of novel ONCOS viruses. Second, we will advance ONCOS-102 in PD-1 refractory melanoma, and we are going to do that in the platform trial testing multiple combinations with the aim of generating higher response rates than the 35% we have seen so far. And third, we are going to demonstrate that ONCOS stretches far beyond just 102. This is not the one-trick pony. This is a platform that we can utilize to deliver highly innovative payloads, and that is where the true potential and value in the future will lie. How do we intend to achieve this? I see our strategy as a 2-pillar R&D strategy on the top. It's a clinical aspect. We continue development of ONCOS-102. This provides both the next step for ONCOS-102 and puts ONCOS-102 in position to get differentiation and more -- even more solid data than we have to date. And also, this trial provides important information when it comes to dosing to combinations that we can utilize for our next-generation candidates so that when they come along, we already know how to best utilize these in practice in the clinic. And that's the preclinical leg here. We are then working in parallel with the ONCOS-102 melanoma platform trial to develop our platform of novel ONCOS constructs for the future. And then we see these programs going hand-in-hand. The preclinical program is expanding and establishing our platform. It's generating novel candidates for the future, whereas the clinical validation of the platform is coming from the melanoma PD-1 platform trial, which we plan to start up in the second half of next year. So with that, I wrap up the formal presentation and we can take questions from the audience.

So we have 2 questions so far. Question 1. Why exactly should circular RNA improve or leverage the ONCOS technology?

So why is ONCOS-102 suitable in this context. Well, one, we know that ONCOS-102 is a very potent immune modulator inside the tumor. We know we drive a massive infiltration of T-cells. So we have established the activity of ONCOS-102, and we can correlate it to immune responses. That means that our vector is an excellent delivery system and it's clinically validated. So we know how we can get the circular RNAs into the tumor. This is what the delivery is, what's been the problem, mRNA has been a promising treatment modality for a long time, but it's been hard to crack the delivery aspect of it. This was sold just recently by Moderna and Pfizer, and it's only now that we are seeing the first mRNA product making it into the clinic. Now the advantage of circular RNA is mRNA is very unstable. It's broken down quickly. It's chopped up from the ends. That's how RNAs are degraded. So these mRNAs, they need quite heavy modifications in order to be stable enough to have time to work in a patient. As circular RNA has the benefit, it has no pre-end, so it's resistant to standard degradation mechanisms. That means that the circle is present for a much longer time. And therefore, it's particularly suitable for delivering genetic payloads. And we think this added longevity gives us a benefit in terms of what we deliver with ONCOS. So the way we have designed ONCOS-102 is that it expresses the transgene in a classic mRNA format. But then we cannot expect the transgene to be present for particularly long because for the reason I stated the mRNA will be degraded whereas doing this with a circular RNA, we are using a system with a much more long-lived RNA produced from ONCOS, and this offers us not only an advantage in terms of prolonging the gene expression, but it also opens up a broad number of additional opportunities and functionalities that you can build into such a construct. And in addition, we have access to some of the pioneers in the space. So the total picture is that we think we have a unique position to leverage here and be an early mover into the space. Next question.

You talk very little about the TG platform. What are the plans?

We -- our lead program is the ONCOS program, but we, of course, have the mutant RAS TG vaccine program also in our portfolio. We are pursuing the 2 avenues for this. One is through our partner in China, IOVaxis Therapeutics. They are preparing for a clinical trial in China, and they have an option to in-license TG for China. This option or exercise of the option is pending approval from the Chinese authorities to run a clinical trial. We have run into some additional requests in terms of preclinical data package that was requested by the Chinese authorities. The relevant experiments have been agreed with the regulator and are currently being done. We expect them to be done at some point in the first half of next year. And then the IND will be resubmitted with these results and indications from the agency is that the rest of the package is approved. So we would anticipate this IND to be approved and then IOVaxis to take their option and initiate a clinical trial. But of course, the decision lies with IOVaxis. But the delay here is due to much longer-than-expected regulatory time lines. And then we are also working ourselves on the program. So as we have communicated before, the strategy is to push TG forward with collaborations and in a cost-efficient manner. We have made a lot of progress on that front, and we anticipate to be able to get TG back into the clinic in academic collaborations at some point in the future. And we have various such dialogues ongoing, but this will be sponsored externally and not by Targovax. Okay. So with that, I think we are good for the questions. Thank you for listening and see you next time.