Circio Holding ASA (CRNA) Earnings Call Transcript & Summary

Welcome to Targovax and our first quarter update. My name is Erik Digman Wiklund and I am the CEO. With me today, I have Chief Financial Officer, Lubor Gaal; as well as our Chief Medical Officer, Lone Ottesen. During the first quarter, we made major advances in delivering on our new strategy. Most importantly, we formed 2 critical business development deals with our new partners at Agenus. #1, announced yesterday is a clinical collaboration agreement on the next melanoma trial and Agenus will in this trial partner up with us and give us access to 2 important checkpoint inhibitors, their anti-PD-1 and their anti-CTLA-4, which we will combine ONCOS-102 with in our upcoming Phase II trial. This is an essential collaboration to be able to execute the trial and it will save us significant costs. And in addition, it gives us access to, particularly with the CTLA-4, 1 of the most interesting checkpoint inhibitors in development at the moment. So we're very excited about this partnership and we think it will put ONCOS-102 in a position to really differentiate and be competitive in the PD-1 refractory melanoma space. Secondly, we made another deal with Agenus earlier in the year and this is for the TG program. In this agreement, we have secured supply of the adjuvant QS-21, which will become a component of our TG01 vaccine as we move forward, and we believe this will both enhance the potency of the vaccine and will also save us cost as we develop the product forward. So 2 important deals with Agenus, who is now really becoming a strategic partner for us on both of our clinical assets. Secondly, on R&D we've made some important deals. On the top here, you see a deal with Oslo University Hospital. This is a collaboration agreement to run a trial in multiple myeloma with our TG01 vaccine. This trial will be partly funded by prestigious research grants from the Norwegian Research Council at Innovation Norway. So to Targovax, this is a low-cost opportunity to get TG01 back into the clinic and it's also a new indication: multiple myeloma, we never tested TG before. So it creates a new opportunity and a new avenue forward. We are in parallel making arrangements to start additional such trials and collaborations with low cost to Targovax, So we're very excited to finally get TG01 back into the clinic. We anticipate this trial to start enrolling second half of the year. Secondly, on our pipeline efforts, we have made an agreement with the Karolinska Institute in Stockholm, There we get access to lab infrastructure and we're currently placing a team on site at the Karolinska of scientists that will be running particularly our circular RNA efforts as we move forward. So this gives us important access to expertise and infrastructure to do the science that we need to do in-house. In addition, we put the organization in place to execute on all of these plans. Talking about the pipeline and the circular RNA, we've recruited Dr. Thomas Hansen. He is the discoverer and pioneer of circular RNA and he really brings the critical expertise we needed to push this program forward. He has brought with him some key scientists and they are setting up in Stockholm and busy in the lab producing data and we look forward to update you on our circular RNA program in the second half of the year. In addition, we strengthened the management team with the recruitment of Lubor Gaal as new Chief Financial Officer. In addition, we have had some replacements on the Board. Dr. Raphael Clynes has joined the Board. He comes to us from Xencor, a U.S. company developing antibodies and bispecifics, and brings very important translational expertise taking the science into the clinic. That's his core competence and he will be an important addition in nationalizing the Board. In addition, we recruited Mr. Thomas Falck. He's a Norwegian with significant financial experience and joins the Board as of 30th of April. Looking at the management team, we have now reshaped the management team and the new team is in place. Everyone has taken their positions. In addition to myself, Lubor Gaal has joined as Chief Financial Officer. Lubor is a seasoned industry veteran. He comes to us from Locust Walk, a U.S.-based transactions firm. Before Locust Walk, he worked many years in business development in big pharma, most notably in BMS as well as small biotech. So brings deal expertise, both biotech and pharma experience and a broad international network. In addition, we have Dr. Lone Ottesen now formally fully taking over as Chief Medical Officer. Lone is a clinician by training, worked many years as a doctor and has been also in big pharma responsible for development of immunotherapy. Most recently, Lone was heading up the durvalumab so the PD-L1 checkpoint inhibitor of AstraZeneca in women's cancer. This means Lone has up-to-date experience in running checkpoint inhibitor combination trials, exactly what we are planning to do with ONCOS-102 and TG01 as we move forward, and this is critical expertise to have for us as it's complicated to run these types of trials. You need that concrete experience in running immunotherapy combinations. In addition to Lone and Lubor, we have Victor Levitsky, our Chief Scientific Officer. Seasoned tumor immunologist with academic and industry experience. Ola Melin joined us last year as Head of Manufacturing. He will be responsible for scaling up and getting us ready for commercial production of both TG and ONCOS as we move forward. And Ingunn as a regulatory expert brings long experience from Norwegian Biotech. So I'm very pleased to have this new team in place and I'm particularly excited that we're able to recruit these type of international individuals to both bring in expertise and an international network into the company. And with that, I'd like to hand over to Lubor to go through the quarterly figures.

Thank you, Erik. My name is Lubor Gaal. I'm the new Chief Financial Officer for Targovax. I am very excited to join Targovax at this point of time because I feel like we have a very innovative portfolio and we can put this company on a new trajectory for growth. With that, let me introduce you to the quarterly results for this year -- for this quarter. The financial results are very much in line with previous quarters and our budget. We are recognizing some payroll expenses in the first quarter through transitions and management positions and some overlapping positions. But otherwise, our payroll expenses are very much in line with our budget. As you can see, we spent about NOK30 million in this first quarter, which brings our cash balance to NOK150 million. This is sufficient to run our operations until the middle of next year and allows us to do everything that we have laid out previously. We'll need additional funds of course to move beyond. On the right-hand side, we have listed our shareholder base. These are our Top 10 shareholders and we have been successful internationalizing our shareholder base and we think that is because internationally we are being now recognized as a very interesting opportunity with interesting programs in immuno-oncology. Let me now switch gears and talk about our 2 most recent achievements in business development. As Erik already laid out, we announced 2 collaborations: 1 with Oslo University and 1 with Agenus. Why are we excited about these agreements? First of all, of course with the collaboration with Oslo University is our first new step in bringing out -- testing new clinical programs for the TG vaccines. Recently there has been renewed interest in the RAS field. There's been quite a bit of excitement in our industry about KRAS driven tumors and the treatments that address those mutations. And I think we're very well positioned with our TG01 program as it's been in the clinic and already been tested in humans. So this is a new opportunity to test our programs beyond the first studies and enter into new indications and we are going to have plans to test our TG program in additional indications as well as additional combinations later this year. Also of course this is the first time we're going to test a new combination with the QS-21 STIMULON from Agenus. So we're very excited about this collaboration and the data we will generate in the future. I'm very excited that we have been able to expand our collaboration with Agenus. We entered into this agreement that was announced yesterday. This will give us access to novel checkpoint inhibitors and allow us to really create a very competitive and differentiated combination treatment for 102 in melanoma and hopefully beyond. This is a clinical collaboration where Agenus will contribute the drug supply and we work together in order to move this new therapy forward for patients with melanoma. And you can see these new collaboration recognized in our pipeline. As you can see at the bottom, we are recognized in the multiple myeloma study with Oslo University Hospital. And at the top, you can see we are in the planning phases for our multi-cohort trial and our Chief Medical Officer, Lone Ottesen, will now tell you more about that.

Thank you, Lubor. My name is Lone Ottesen, I'm the new Chief Medical Officer, and I will take you through the clinical plans. So here you have the overview. You can see at the top, we have the multi-cohort trial in planning and I'll talk a bit more about that one. But first, I'll just remind you of the attractive response rate we have previously demonstrated in our melanoma pilot trial with ONCOS-102 in combination with a PD-1 inhibitor in the PD-1 refractory melanoma setting. We demonstrated a response rate of 35%, which compares very well with what is out there from our competitors in this field and in this setting I should say as well. I want to talk a little bit more about some of the immune analysis we did in the original -- in the first trial. And we did some I think quite beautiful, very detailed work on tumor biopsies. We took repeated biopsies from these patients and then we looked at the expression of the immune checkpoint inhibitors; the well-known checkpoints that you see here, TIGIT, CTLA-4, TIM-3, LAG-3, PD-L1. What you can see in this figure where on the right-hand side we have the responders, on the left-hand side you have the progressors. And you see that particularly the CTLA-4 expression is heavily upregulated in patients responding to the treatment. This suggests that combining our ONCOS-102 with a CTLA-4 inhibitor may further deepen responses in these patients. So therefore, we think there is a very strong rationale for combining ONCOS-102 with the CTLA-4 inhibitor. We think we can reverse immune suppression through this by removing the T regulatory cells and this will then enhance the T cell response against the tumor. It will boost systemic activity and we believe it will have the potential to prolong survival in this patient population that is currently not very well treated with very few options for therapy. This is a schematic of our multi-cohort Phase II trial. There is 2 parts to it. There's a run-in phase you see here where we will establish the contribution of components. You may recognize that this is something that's being scrutinized at the moment by the regulatory authorities will look at monotherapy activity of our oncolytic virus and we will look at dose confirmation when we use ONCOS-102 in combination with a PD-1 inhibitor. Then we will move on to the Part 2 of the trial where we have what we call the multi-cohort extension. We have the option of exploring several combinations here and I'm very happy to announce that we have now identified the first 2 combination partners, balstilimab from Agenus and Agenus' new second-generation CTLA-4 inhibitor botensilimab, a compound that has already shown very exciting data sets in a number of indications. This trial will then drive data sets in these different combinations that will serve as building blocks for the Phase III trial to come later. And as I mentioned before, it's a highly flexible trial that allows inclusion of new combinations as our collaboration efforts continues and we identify new partners. And there seems to be a little problem progressing the slides. Thank you, Erik. So I'll now tell you a bit about what we are planning in multiple myeloma. So this involves our TG01 vaccine that we have previously trialed in pancreatic cancer. But now we will look at it in multiple myeloma and multiple myeloma is an incurable cancer that starts in the plasma cells in the bone marrow. It's the second most common form of blood cancer. Worldwide it has an incidence of 176,000 a year with 117,000 patients dying from myeloma every year. The 5-year survival rate is approximately 55%. In recent years we have seen several new therapeutic options available, but most patients will experience disease relapse. This disease tend to have a chronic course and there is, therefore, a continued medical need for more effective targeted therapies that can improve the responses in those patients with remaining disease after their standard of care. Tolerability is another very important aspect in this disease and also here, our vaccine could become a very relevant therapeutic option. The other reasons why we think it's such a good idea to explore TG01 in multiple myeloma is that we know 15% to 20% of myeloma patients have a RAS mutation that is covered by the TG01 vaccine. There is no RAS-targeted therapies available in multiple myeloma. We have recently seen approval of a small molecule tyrosine kinase inhibitor in RAS mutated lung cancer, but nothing at the moment in multiple myeloma. We also know that our vaccine has previously demonstrated ability to drive a very strong anti-RAS immune response in patients with the relevant mutations and we have seen some approval of patient survival in pancreas cancer, as you know a very difficult to treat disease. We have recently announced that we have entered into collaboration with Dr. Schjesvold from Oslo University Hospital to test TG01 in combination with our new adjuvant QS-21 in multiple myeloma patients, in patients who have completed the standard initial therapy. We're very happy to collaborate with Dr. Schjesvold. He is a leading international expert on melanoma. He is Head of the Clinical Trial Task Force in the Nordic myeloma group and at his site at Oslo University Hospital, we actually have the largest clinical research center for myeloma in the Nordics. Further, and Erik mentioned this earlier, this study has actually been supported by 2 prestigious research grants: Norwegian public grants from Innovation Norway and the Research Council of Norway for a total of NOK18 million. The patient population is, as I mentioned before, they have confirmed KRAS or NRAS mutation and they have evidence of remaining disease after completion of their initial therapy. The treatment regimen is a vaccination course lasting a year. Initially they will get vaccinations every 2 weeks and then every 2 months up to a total of 52 weeks. We will include 20 patients in this study and we will be looking at safety and tolerability of course, but also on response rate and overall survival. This will be the first trial to explore the use of our vaccine, the TG01 in combination the QS 21. So we are obviously very excited about this. With that, I'll hand over to Erik to round off this presentation. Thanks for your time.

Thank you, Lone. So as you can see, we're very actively pushing forward on all of our programs. And we really see Targovax strategy now as centered around 3 pillars. ONCOS-102, the lead clinical asset, we're pushing this forward in our multi-cohort trial in melanoma partnering up with Agenus. The KRAS vaccine, we're bringing back into the clinic in a new and enhanced format and we're doing in a low-cost collaborative fashion that will enable a broad set of data to be generated without too much impact on Targovax finance-wise. And thirdly, we're aggressively moving into the circular RNA space and building up our scientific capability and generating data. So these are the 3 avenues we're now pushing forward to generate value as we move forward. And we think we are in an excellent position to deliver shareholder value through business development deals on all of these 3. If we start with ONCOS-102 and the melanoma trial. This trial we're structuring so that it will be the 1 trial we need to do to be able to partner out the program. It's sufficiently sized, it has innovative combinations and it answers the key regulatory questions. With that data in hand if it's successful, we will then aim to out-license the product for registrational development. Secondly, on KRAS, we're building up this collaborative network. We have multiple partners involved. We have research funding and academic sponsorships. This will enable a broad set of data to be generated both as monotherapy and in combinations. We anticipate to have multiple trials starting by the end of the year. So this way, we get both data. We have people enrolled and we create many opportunities for the future. And thirdly, on circular RNA, what we're trying to do here is build a platform where we can both develop products in-house our own assets as well as partner out in alternative indications. So we're attempting to get in a position where we can do early preclinical these deals on the circular RNA. So the value creation in the short term on all of our pillars will really occur through business development and I think we have both the team and the programs and the science in place to execute on that. So with that, we wrap up the formal presentation and we will take questions from the web.

We received a lot of questions and we'll not be able to address all of them, but we'll try. Erik, the payroll expenses increased by 45% in the first quarter. Why was that?

So as I went through, we have put the new management team in place. There are certain one-off costs associated with the management replacements and also we have had some period of overlaps. So these are just the one-off costs largely. In addition, we are -- we need the team in place to deliver on our ambitious plans. So we're particularly expanding on our scientific capabilities. We recruited Thomas Hansen who's bringing more science and more of a science team and we're setting up shop with Karolinska. So this might trigger some additional payroll cost, but actually it reduces cost overall because it means we no longer need to rely on CROs to do our research which we did before. That is both more costly and more timely. So this actually saves us cost the fact that we're expanding our research capabilities. And if we're going to be serious about developing our circular RNA program, we need a team in place to do so. The same goes for the clinical activities. In order to deliver on the ONCOS-102 platform trial as well as the TG trials we plan, we need a high caliber team in place to execute those plans.

Another question from the audience is they're asking how are you planning to fund the melanoma trial?

We have current capital from the financing we did in December that lasts until the middle of next year executing full speed on all of our plans. Going forward, these types of trials take years. Go through the business model that biotech do refinancings at intervals. We will raise the money we need to execute the plans that we have and we're confident that we can attract quality investors to do so.

Can you tell a little bit more about the melanoma trial and how many patients are you planning to enroll, Lone?

Very happy to. So I showed you there was 2 parts to this study. The Part 1 of the study is designed so will include initial cohorts of 10 patients determine whether this is safe and tolerable, then we will expand those cohorts to 20 patients each. In the Part 2 of the study, we will recruit cohorts also in 2 stages, initial 18 patients. And if the cohort meet a certain efficacy threshold, we'll move up to a total of 37 evaluable patients, which we think is a sufficiently sized group to adequately characterize the efficacy and durability of responses in this population.

And to add to what Lone said, we believe this will satisfy regulators in terms of being able to push the program forward in the future to registrational development and we believe it'll build sufficient patient number to convince partners that the product works and then take the program and finance it moving forward.

We received quite a few questions on the multiple myeloma study. Can you provide more color on the study design of the trial with TG01 and QS-21?

Yes, I can. This is a single-arm trial. It's a Phase I/II trial. You could consider this a pilot trial that will give us an initial handle on the level of activity with sort of further trial activity to come to unequivocally prove activity, but we think this is a reasonable size for sort of an initial pilot in this setting. As I mentioned previously, there is so much attention on RAS mutations these days. It's a really hot area, but RAS mutations in myeloma is very novel and we don't have much to sort of look to historically on how these patients may fare with vaccination -- a targeted vaccination intervention.

One other question was will Targovax contribute with funding to the myeloma trial beyond the public grants received?

We are contributing some funding, particularly towards immunological assays, but the majority of the trial is funded by the hospital and then supported by these research grants. So the cash impact on Targovax is low.

Let's switch gears. There is actually quite some interest in getting an update on what's happening with IOVaxis and the option in China.

So the update there is that IOVaxis had feedback from regulatory authorities that some preclinical data will be needed to approve the IND so the application to run a clinical trial. This type of data was not recruited -- was not required by Western authorities, but have been a requirement in China. IOVaxis are currently running preclinical work in vivo models to address these issues so that's ongoing. IOVaxis is investing heavily into this. We anticipate that during Q3 that work will be complete. They will then resubmit to the Chinese authorities who have indicated that if these experiments work as expected, they will be satisfied and approve the IND. So it's somewhat unpredictable, but IOVaxis is certainly spending significant resources in advancing this and we assume with positive outcome, this will push forward. But probably earliest time point would be Q4 where a potential exercise of this option can happen.

There's one question about the upcoming CRC data to be presented at ASCO. Can you tell a little bit more about what do you think?

Yes, a poster has been accepted for presentation at ASCO. Recall this is a trial in a very, very difficult patient population. These are metastatic colorectal cancer patients that have failed on other therapies so they're terminal last line. We then gave ONCOS-102 and combined with durvalumab. Checkpoint inhibitor monotherapy in this setting gives 0% response rate. We're also here trying a new delivery method intraperitoneal infusion. So I think it's -- we can't anticipate to see sort of 35% response rate like we did in melanoma. Here we're really looking at just if even just a few patients have response, that would be great and a signal to move forward. It will also create some data for us to assess whether intraperitoneal administration route is suitable for ONCOS-102. So we're going to look at this data, consider what we do next, but our priority is melanoma and pushing forward the melanoma program with the Agenus collaboration.

And the last question is, you said you were quite excited about entering to collaboration with Agenus for ONCOS-102. Why?

Simply because it gives us access to the best anti-CTLA-4 checkpoint inhibitor that is out there. With botensilimab, Agenus has produced, I would say, stellar early Phase I data and this molecule looks like it has better activity like better efficacy than ipilimumab and it also improves on tolerability. And this is the first time Agenus does a supply agreement. No one else has this type of deal with them. So it creates opportunity for differentiation. It means we will be combining with something that no one else is combining with. And as Lone showed, we have the data to suggest that combining with Agenus CTLA-4 should both boost response rates and create better systemic activity of ONCOS-102. In addition, we expect it will make our responses more durable because we see CTLA-4 is particularly upregulated in the responders. So by adding that in, you can anticipate deeper and longer responses leading to longer patient survival. So I think this is really exciting. The PD-1 blockers like balstilimab in this case are a bit more generic now. You have I think 8 approvals of PD-1s or PD-L1s. They seem like they are more interchangeable. So there I think we were driven to do this deal with Agenus because of the access to the CTLA-4 and then in addition, we get the PD-1 molecule from the same company. And then in parallel, we're forming a broader strategic partnership with Agenus because we're doing this also with QS-21 on TG. That means we have 1 partner to deal with and we're really collaborating on both of our programs and we're very excited and happy to work with our colleagues at Agenus. I think that was all the questions. Thank you for tuning in. And we see you again at our second quarter presentation, which will be in August. Thank you and bye bye.

Thank you.