Circio Holding ASA (CRNA) Earnings Call Transcript & Summary

Welcome to Targovax and our fourth quarter and full year 2021 presentation. My name is Erik Digman Wiklund and I am the CEO of Targovax. So first, let me give you a brief overview of the main highlights of last year. By far, the most important event of the year was the clinical data that we delivered on ONCOS-102, our lead clinical stage program. We showed a class-leading ORR of 35% in PD-1 refractory melanoma, and we could associate this ORR to deep and durable immune responses in the tumors. Second, we also showed a very solid median survival of 25 months in frontline mesothelioma in combination with chemotherapy. And this puts ONCOS-102 as the compound with the best survival data that we have seen in mesothelioma. And these 2 data points were corroborated by 2 Fast Track designations by the U.S. FDA for both PD-1 refractory melanoma and mesothelioma for ONCOS-102. So ONCOS-102 is now really set to continue development, and we have confirmed this activity in multiple tumor types. Building on these data, we are now expanding our pipeline into next-generation ONCOS viruses, and we are exploring the opportunity to use ONCOS to deliver circular RNA. In order to deliver on this, we're expanding the team with the expertise we need to build a portfolio of circular RNA ONCOS vectors. As part of that, I was appointed CEO of the company in October last year. We have hired circular RNA pioneer, Thomas Hansen, from Denmark, and he has now taken this position and is starting to build up our experimental program. In addition, we recently announced a collaboration with the Karolinska Institute in Stockholm, where much of this work will be taking place at the laboratory of Professor Michael Uhlin. So this will be a very important collaboration to be able to test and enhance and analyze these novel ONCOS viruses as we develop them. In addition, our mutant KRAS program is making a comeback. We've been working on this for a while, but now we are ready to bring our TG vaccines back into the clinic. And to support this, we have received 2 prestigious research grants from Innovation Norway and from Norwegian Research Council. In total, this will provide NOK 18 million of funding towards TG clinical trials and product development over the coming years. In order to deliver on these promises, we executed the rights issue at the end of the year, raising a total of NOK 175 million in gross proceeds. So we're now funded to be able to execute the program as planned. Some financial highlights for the year. Fourth quarter operating expenses were largely in line with expectations, NOK 26 million in costs. This leaves the full year at just under NOK 100 million in total operating costs, which means we're running a tight ship. We have control of our cost base. We ended the year following the successful rights issue with a cash position of NOK 182 million. This provides a runway to around the middle of 2023. Following the rights issue, our cap table has changed. You can see here on the right-hand side of the slide. Notably now the 3 main shareholders or top shareholders are all Swedish institutions, which hold a total of about 20% of the shares in the company. So what are these investors investing in? They're buying into the opportunity that lies in immune activators. Immunotherapy really revolutionized cancer therapy in the last decade, led by the checkpoint inhibitors and checkpoint inhibitors have grown to a class of drugs by far the most successful cancer drugs that now sells for around $25 billion per year. More than 40% of patients these days received some form of checkpoint inhibitor as the cornerstone of their treatment. However, the problem is that still the majority of patients do not respond. Some do, the majority don't. And what is now being more and more understood is that you need immune activators, to prime the tumor, to prime the patient to respond to the checkpoint inhibitors. And that's where Targovax comes in. That is what we're trying to achieve, immune-activated tumors, so that checkpoint inhibitors can work better. How are we doing this? We're doing this with our ONCOS platform. ONCOS is an oncolytic virus system that we inject directly into the tumor. And what it does is that it unblinds the tumor to the immune system. It then primes T cells to recognize the cancer cells and attack the tumor directly. In addition, by this pro-inflammatory response, it's remodulating the tumor microenvironment to become more favorable to an attack by the immune system. And finally, we can use ONCOS to deliver genetic payloads directly into the tumor site. Our strategy is centered around 4 core projects. Number one, and as I mentioned now, is local delivery of ONCOS-102. That's where we're most advanced. This is intratumoral injection of ONCOS-102. And here, we're currently in Phase II, and I'll show you some of the key data. Second, we're moving into systemic delivery of ONCOS-102. So with the systemic delivery or IV infusion of the oncolytic virus, you can access deeper tumors. It's more easy for the physicians to treat patients and also you can treat patients with more dispersed or metastatic disease. So with number one, we're giving a proof of concept. We're showing on was 1 or 2 works where we can deliver it to the tumor. And with number two, we're expanding so that we can create a bigger opportunity for the future. And this is really the holy grail in oncolytic virus development. Number three, we're using ONCOS now as a platform where we can expand to deliver novel and innovative payloads and this is spearheaded by our circular RNA program driven by Thomas Hansen. And number four, mutant KRAS immunotherapy is once again becoming a core part of our development strategy, and we're aiming to bring our TG vaccines back into the clinic during this year. Here, you can see our overall pipeline. Starting from the top, ONCOS-102, our 2 Targovax sponsored trials in PD-1 refractory melanoma and mesothelioma, have read out. They have strong data. We're now planning the next steps, which will be a multi-cohort trial in PD-1-resistant melanoma to start end of this year or potentially early 2023. Planning is ongoing. And then you can see 2, 3 and 4 are the pipeline programs, Onco-systemic delivery. This is in the discovery phase, the same with the circular RNA vectors. This is in discovery phase and the mutant RAS immunotherapy. Here, we're moving into Phase I trials during this year. And also we're working on exploratory concepts. Starting with melanoma. Here, we showed 35% ORR in the Phase I trial with 20 patients, and this really can be considered class-leading. If we look at other published data in this patient population, the 35% is the best we have seen. It's on par with BioNTech's mRNA vaccine. And you can see these other companies have shown less or clearly less response rates. So we're very confident in this data, and we're planning to build forward in melanoma based on the activity that we have seen. What is very important is that these responses we can corroborate by immune activation. I talked about immune activation being important. And here, it's a somewhat complicated graph on the right, but it shows you the breadth of the immune activation that we achieved. So here, we did gene expression analysis by RNA sequencing of tumor biopsies and then we look at genetic signatures that are relevant for an immune response. And what you're looking at is a comparison of day 64, week 9, we have a biopsy and we compare it to baseline. And then we see what are the differences in gene expression of these immune pathways at week 9 of treatment. And pretty much every single signature you look at here, there is an upregulation. To the right mean it's higher after treatment. This shows that ONCOS-102 is remodulating the tumor microenvironment, it's activating an immune response. And this immune response is lasting because it's still there at week 9. Looking in a bit more detail, we can see exactly what things are upregulated, and I'll provide some examples here with checkpoint inhibitors. So these checkpoint molecules, the famous ones like CTLA4, PDL1, et cetera, are all up-regulated following ONCOS-102 treatment. Now what we are looking at this graph is responding patients versus non-responding patients. So we ask ourselves what is happening in those patients that have an effect. And then the gray bar is baseline day 1. The blue bar in the middle is day 22 or week 3. This is after ONCOS-only treatment. And then at day 64, the dark blue is what happens at week 9. And what you see here is a dramatic increase in the responding patients of several of these checkpoint molecules at week 9. This tells us 2 things. ONCOS-102 is active and it's persisting -- this activity is persisting. And then it also provides us insights into what targets we can utilize for the future. So now we're looking at this data and for instance, here illustrated by the CTLA4, which is another approved checkpoint inhibitor in melanoma, we -- it makes us think, should we be combining with a CTLA4 here to see if we can boost the response even further. Interestingly, at the bottom here, you can see that the PDL1, which is the target for PD-1 checkpoint inhibitors, the most famous or important checkpoint inhibitors most widely used, it doesn't seem like it's changed much. So here, the expression is actually high. The level of PDL1 is high, but there is not such a big difference between the responders and nonresponders. And that's why we think PD-1 is a good combination with CTLA4 as an example because the CTLA4 goes up in the responders. It can be used to deepen and expand the responses, whereas the PDL1 is there in all patients and it can constitute the response early on. So that's why we're planning to move forward with PD-1 and additional combinations in melanoma. And the aim is to boost the response rate even further above the 35% learning from these data from the Phase I. So the trial we're planning will start off with 2 cohorts, an ONCOS-102 monotherapy cohort and then a PD-1 combination cohort. These 2 cohorts are important to tease out exactly what is the activity of ONCOS-102 and what you get in addition when you add the PD-1. It tells us precisely the contribution of each of the 2 components. When this is done, we can move into Part 2 of the trial, where we'll add on novel combinations. I mentioned CTLA4 earlier, and this is our plan for Cohort 3. It's an ONCOS-102 plus a CTLA4 combination. And then we want to try the triple PD-1, CTLA4 on ONCOS-102. And in addition, we are contemplating additional combinations such as costimulatory molecules, and we will come back to these later. And the way we designed this trial is so that it can be expanded and built upon and each of the cohorts can form the basis for future registrational trials depending on where we see the best results. So this is a trial to build stone by stone, learn the activity of ONCOS-102, what it combines best with and create opportunities for differentiation and even better responses in the future and separate ONCOS-102 even further from the competition in the PD-1 refractory melanoma space. Mesothelioma. Here, we also published data during the year. In this trial, we now completed the survival follow-up. And this plot shows the final efficacy outcomes of the trial. On the X-axis, it's median survival and on the Y-axis is progression-free survival. And you can see the Targovax experimental arm in the top right corner, it clearly separates from historical controlled trials. We've shown a median survival of 25 months which is better than any other published data, this indication. Notably, the Baas Ipi/nivo point, you can see here. This is double checkpoint combination, PD-1 plus CTLA4. This combination was approved based on the survival of 18 months. So we're very pleased with this data. And it once again illustrates that ONCOS-102 is active and delivers clinical benefit to patients. Again, like for melanoma, we can show that the better -- the clinical outcome of the patient is associated with an immune response. Here on this radar plot, we've scored a variety of the immune cell subsets in the tumor that are relevant for an immune response and you want to have it -- higher, is better, higher means more inflammation, it means more immune activation. Then we compare blue to red, which is ONCOS-102-treated patients in blue, chemotherapy-only patients treated in red. So clearly, there is more immune activation going on in the ONCOS-treated patients versus the non-ONCOS treated patients. Then you can look at the solid line versus dash line, which is surviving versus non-surviving patients at 18 months. And again, you see the bigger -- the broader immune activation here happens in the patients that have this long-term survival. So again, ONCOS-102 delivers clinical benefit, and we can associate this clinical benefit to immune activation. So to summarize ONCOS-102, we've tested the product in multiple cold or treatment-resistance tumors, both as monotherapy and in combination with chemotherapy and with checkpoint inhibitors. Two, we have demonstrated the ability to both shrink tumors and extend survival. Three, we've shown immune responses and that these immune responses are broad, they persist and they correlate with outcomes. And now what we're planning to do is this trial in melanoma where we attempt to combine with further products in order to boost the response rates and find the best possible combination setting for ONCOS-102. So building on this data, we're not only moving ONCOS-102 forward in the clinic, which, of course, is a key component of our development program, but we also want to learn how we can utilize these data to build a stronger pipeline. A very important step here is the systemic delivery, which I mentioned. This is a somewhat new part to what we do. I won't spend a lot of time on it here today. But basically, we are -- you can see in the green box here, exploring technologies where we can either package or genetically modify the virus in a way that shields it from the immune system in circulation so that we can get sufficient viruses to the tumor. Here, we're in the process of working with collaboration partners to assess different technological options. And our aim is to, during this year, select the technology of choice for moving into future clinical trials with systemic ONCOS-102 delivery. Third, we are exploring now how we can use the ONCOS platform to deliver other genetic molecules such as RNA. RNA has become really fashionable lately driven by the COVID mRNA vaccines. But RNA is actually an emerging therapeutic class that can be used for various purposes, not only vaccines, but you can deliver gene therapy, you can deliver genetic payloads this way or you can use RNA to deregulate other genes. So you have examples here of -- these are the known today, FDA-approved RNA therapies led by the mRNA vaccines, of course. To date, no circular RNA treatment option or product candidate has been approved or even entered the clinic. So using circular RNA for an RNA therapeutic is completely new. The challenge with RNA therapeutics is that, one, RNA is chemically unstable. So it quickly degrades, it has a short half life and this complicates the use of it clinically. Two, efficient delivery of RNA is complicated. And three, if you want to treat the tumor or a cancer with an RNA, it's hard to get it to the tumor and dispersed sufficiently. ONCOS has the potential to deal with all of these issues. With ONCOS, we can encode the RNA in our much more stable DNA format. And two, we inject ONCOS-102 into the tumor, we know it works. We know ONCOS-102 can express RNA inside the tumor, thus solving both the delivery and the spread and persistence in the tumor issue. We have made a key recruitment here, Thomas Hansen. He is leading our circular RNA efforts. And Thomas and myself, we were actually the discoverers of the first circular RNA, which we published 10 years ago. And then the past decade, Thomas has built his career in academia on exploring and being really the circular RNA peer -- pioneer. And now we're fortunate to have him on our team. Circular RNA offers several advantages in terms of a payload to be delivered by something like the ONCOS virus. And the most important benefit is that circular RNA is resistant to degradation by exonucleases. As you can see here on the cartoon on the left, exonucleases, they would eat up a normal mRNA from the end, it quickly gets cut up and degraded. The circular RNA is resistant to this type of degradation. This means the circular RNA will be present in the tumor for much longer potentially, and thus exert its effect for much longer. In addition, you have other functions of circular RNA, which also can be leveraged as additional benefits inside the tumor. This space is seeing high interest at the moment, driven largely by these 2 companies mentioned on this page, Orna Therapeutics and then Moderna and Flagship set up a company Laronde, which are aiming to use circular RNA for gene therapy and vaccines, leveraging the new insight that you can express genes and proteins from circular RNA. And you can see how these companies raise some massive funding rounds to develop their programs. But these are preclinical companies, early stage. They don't have a delivery system and they are only at the early discovery state. What is unique for Targovax is that we have our validated ONCOS platform, which means we quickly can put a circular RNA into our ONCOS and deliver it into the tumor with a clinically validated vector. Here is a simple schematic of what we're trying to achieve. We want to have ONCOS express circular RNAs, with the aim of achieving multiple goals as illustrated here. Gene therapy, it can be used to encode tumor antigens. It can be used to boost immune responses and it can be used as a sponge for microRNAs, other noncoding RNAs in the tumor. So this is a really versatile system where you can achieve many things with one type of molecule. An mRNA really only offers you the left one, the protein translation. The circle offers that, plus all these other aspects, plus it persists for much longer. The aim of our circular RNA program is we're moving it as fast as we can. We want to have in vitro proof-of-concept data by second half of this year and start to build our IP position in the space. Longer term, our aim is to build multifunctional novel ONCOS viruses both for our internal development to bring forward to the clinic and also on demand for partners, where we can cold circular RNAs with the partner's payload of choice and then license out such products early on. So we're seeing this is a tool both to our internal development and for preclinical partnering. Finally, our mutant KRAS program. As I mentioned earlier, we recently received 2 grants from Innovation Norway and NFR of total NOK 18 million in funding. And this money, we are using towards product development and starting some investigator-initiated trials, and we hope to get TG back into the clinic second half of this year. So this will be announced what exactly these trials and collaborations are moving forward. But the idea is we're going to test new variants of our TG vaccines in new combinations and in new indications. In addition, on the lower part, we're working in the discovery phase on exploring other alternatives for mutant KRAS immunotherapy. With Valo, we're trying to merge our 2 technologies. We're taking ONCOS and we're taking the TG, putting them together using the PeptiCRAd technology of Valo with the aim of creating a KRAS vaccine oncolytic virus. If this works, it would be the first oncolytic-KRAS vaccine. And of course, highly interesting for us as it enables us to merge our 2 technology platforms. And then the one below is with Oblique Therapeutics where the aim is somewhat different. We want to deliver antibody payloads targeting KRAS using ONCOS as a system. So as we move through the year, we will provide more of an update on the TD program as our plans become more concrete and final. So finally, developing -- moving forward, this is what we're going to be delivering on our development projects. Number one, get the trial going, the multi-cohort trial going in PD-1 refractory melanoma and boost ORR ideally by finding the best possible combinations for the future. Two, getting to a technological proof of concept for ONCOS systemic delivery and advance that towards clinical trial. Three, get proof-of-concept data for our circular RNA program and start building a robust IP platform. And four, get vaccines back into the clinic. So with that, I finalize the presentation and we can take questions from the web.

So there are a few questions about the clinical program first. What is the time frame for the multi-cohort Phase II trial in refractory melanoma?

We are working as fast as we can to set up this trial, but there are many moving parts. We need to deal with regulators, investigators, sites, partners. So I would anticipate towards the end of the year, early next year, we will enroll the first patient in that trial.

Will you be able to apply for BLA directly afterwards? Or will a Phase IIb or a Phase III be necessary?

This trial is not set up to be registrational in itself, but we designed it in such a way that based on the data we can expand into registrational cohorts. The -- especially U.S. FDA are becoming much tighter with allowing early BLA filings and allow it on small data set or single-arm trials. So having seen that, we expect that we need to run a bigger trial following up on this trial in order to confirm the data and get the final approval.

Do we know which conference the colorectal cancer study will be presented at?

We are aiming at one of the major clinical oncology conferences this year. The CRI trial there is -- this trial is run by our collaboration partners at CRI and Ludwig. And AstraZeneca has also evolved. So we are not driving the process in submitting or presenting these data, but the aim is to get it to one of the big conferences.

What kind of data can we expect from the colorectal Phase II trial?

Yes. So the colorectal trial is in a patient population that is extremely ill. So these patients are -- they have metastatic colorectal cancer that is spread around the abdomen and the patients are resistant to available therapies. This is a terrible prognosis with very short-expected survival. Really, nothing works. Checkpoint inhibitors have been tested, but they get less than 5% response hardly anyone responds. So here, this is not like melanoma where we see 35% response rate or mesothelioma with a 25-month survival. This is a patient population where a single patient having a response is a good outcome, simply because the prognosis is so poor. In addition, we're exploring a new form of delivery. So I talk about the local administration, the #1. This is intratumoral injection. And with the CRC trial, we're moving to what we call compartmental delivery, we're delivering into the abdomen via catheter. And this we haven't tried before. So part of what's interesting here is to see if this delivery route works. If it works similar to intratumoral and whether we get the immune responses we see in the local intratumoral injections. But in the end, the data here will almost certainly be a lower response rate than what we have seen in melanoma.

Can you say something about the IP situation and particularly how long is ONCOS and TG protected?

Yes, sure. Of course, building a robust IP portfolio is very important for a company like us. Talking about ONCOS, ONCOS-102 has a product patent that lasts until 2029. And then we have combination patents with chemo and with PD-1 antagonist that last to the mid-2030s. So both the product and combinations with the product is patented. On top of that, with drugs like this, they are classed as biologics and biologics have an additional, what you call data protection which means they're also protected from generic competition for 8 to 12 years. Usually, in the U.S., you have 12 years protection from approval and in Europe, it's between 8 and 10 years. So even if you didn't have a patent, you still have your data protection. That means people can't just copy you. We do also have orphan drug designation for ONCOS-102 in mesothelioma, and this adds another layer of exclusivity in the market. For the TG program, the first-generation TGO1 vaccine, the patent has lapsed. But for TG02, our next gen, we have a patent lasting into the 2030s. And there, we also are work -- have and are expanding into combinatorial IP to protect the delivery. We are also working on other ways to make the product itself unique so that even if you're outside of a patent, it really can't be readily copied or having a generic competition. So -- and again, same as for ONCOS, this is a biologic, which falls under the classification of data protection, which means you get that additional angle. And we do have for TG01 orphan drug designation in pancreatic cancer. So I think the totality here of IP, the biologics data protection and the orphan drug designations means we have carved out a very clear exclusivity territory for both of our platforms.

Okay. So there's one more question about the colorectal trial and data. Do you have access to colorectal tissue samples to analyze the same way as melanoma?

Yes. So the biopsies have been taken. Of course, it's trickier in colorectal cancer than, for instance, melanoma, it's much easier to get a tumor biopsy. But the main site at Memorial Sloan Kettering and the PI, Dmitriy Zamarin has KOL in colorectal cancer and also oncolytic viruses is collecting biopsy material and analyzing these, I think, pretty much as we speak.

And then there's some BD questions. Can you say something about the IOVaxis option?

IOVaxis, we're asked by Chinese regulators to run certain preclinical experiments to satisfy some safety concerns. These experiments or data were not requested by Western authorities, but the Chinese authorities requested them. So that's being run. They are having active dialogue with the regulators. And I expect there is some conversation going on with them now soon. If those are positive, those -- the preclinical work will be run to its completion. And as far as we understand, with that done, IOVaxis has ticked the boxes that the Chinese authorities required and then they can move forward with the clinical trial. But this is somewhat unpredictable for us exactly what happens with China regulators, but we do expect that this should resolve hopefully during the year at least.

Do you need to partner ONCOS-102 before starting the next melanoma trial?

So out-licensing or partnering out a product is not really something you can plan for. This -- it happens, if it happens, we are planning to develop our programs ourselves and do it in the best possible way. And then if a partner comes along and wants to license our partner, then we are willing to discuss. But we are basing our next development steps on executing the program ourselves. And our focus is to get collaborations going with good companies that have access to the right type of drugs we want to combine with. . So our core focus now is to find a partner for the melanoma trial that can supply us the PD-1, not only the PD-1, but also the other molecules. So PD-1s are largely becoming kind of plain vanilla these days. There are a few of them around, many are approved, soon coming off patent. So getting the PD-1 inhibitor is not really the big challenge and you have many options. What we're really focusing on is finding the partner that has the most attractive additional molecule. I mentioned CTLA4, some other targets. And there, we are discussing with partners who has the best assets that we can combine ONCOS-102 with in order to maximize response rates. So that's where we're allowing our efforts at the moment, and we are planning to run this ourselves and get collaborations going with partners that have more than one of these drugs in their portfolio.

Okay. So then the last question. If circular RNA is a good idea, why didn't you start the program before?

So remember that circular RNA was really only discovered 10 years ago. And having already these kind of big fundraisers and plans to bring circular RNA into the clinic, I would argue it's actually pretty fast. Already 10 years from discovery or you're starting to look at making drug product candidates, and this is really unusual that it goes that quickly. . Having said that, the big advance that was made in the field was that you can modify circular RNA to function as mRNA. You can modify the circles to express genes and proteins. They do not -- probably they do not do this naturally. But synthetically, you can achieve it. And this is the technology that has been established by Orna Therapeutics and Laronde. And this is what we also are planning to exploit because this then really opens up a treasure chest of things that you can do with circular RNA that wasn't possible just a few years ago. And we are now planning to push this fast. And of course, looking in the market, the mRNA vaccine success of BioNTech, Pfizer and Moderna has really expanded -- exploded the interest in RNA therapeutics asset class. And then these big fundraisings by Laronde and by Orna Therapeutics provides a validation to the field, which is unique, and it means that now like realistically, I think this space is set to develop product -- drug products based on circular RNA. So if there are no further questions, that concludes the Targovax Q4 and full year 2021 presentation. Thanks for tuning in. Don't hesitate to send us questions. If you want to follow up, we're always happy to set up meetings with investors. So thanks again, and stay tuned as we deliver on our promises for 2022.