Circio Holding ASA (CRNA) Earnings Call Transcript & Summary

Welcome to Targovax and the presentation of our results for the second quarter of 2022. My name is Erik Digman Wiklund. I am the CEO. With me today, I also have Chief Financial Officer, Lubor Gaal; as well as our Chief Medical Officer, Lone Ottesen. And we'll take you through the highlights of what we have achieved for the first half of the year. During the first half of 2022, we have made important progress and delivered on our promises for all of our 3 development pillars. For ONCOS-102, our lead clinical program, we are now convinced that ONCOS-102 works based on the response rates we've seen in our Phase I program as well as the deep translational data package we've generated. We have now designed a very smart trial for Phase II and we are making all the necessary preparations to execute this trial as planned. We have forged a partnership with Agenus to access checkpoint inhibitors that we will combine with in that study. Lone will go through this study in a bit more detail later on. And in addition, we are in dialogue with the FDA to discuss the design. Everything is on track. We're expecting go ahead to initiate the trial during the third quarter of this year. On our mutant KRAS program, we have our TG01 vaccine, which we have made important improvements. Again, we forged a deal with Agenus to access a new adjuvant. We already know that TG is effective at generating mutant KRAS immune responses. And with the QS-21, we believe we can strengthen these immune responses further and improve the vaccine. In addition to this new adjuvant strengthening the potency of the product, we have formed important external partnerships to be able to bring the program forward in several indications at low cost to Targovax. We also secured prestigious grant funding. So we've really delivered on our promise for TG to bring the program forward at the low-cost Targovax in multiple indications. And finally, circular RNA. This is maybe the most exciting part of our pipeline and the biggest opportunity for the future. To put this plan into life, we made a deal or an arrangement with the Karolinska Institutet in Stockholm. We have a collaboration with the research group there. And we are establishing a team on the ground to run the science operations out of the Karolinska in Stockholm. We have made key hires, including circular RNA, Pioneer, Dr. Thomas Hansen, who is now working at Targovax, setting up the team and planning out this program. Already, we have exciting early data, and we hope that we will be able to communicate and show some of these early results during the second half of the year. So that summarizes the achievement so far this year. Now I'll hand over to CFO, Lubor Gaal, to go through the Q2 numbers.

Thank you, Erik. It's my pleasure to present the second quarter results or the first half of year results. As you can see, our operating expenses are in line with previous quarters. In this quarter, we recognized higher R&D expenses, reflecting more activities in all our strategic pillars that Erik just referred to earlier. The majority of the R&D expenses are due to the manufacturing cost for the clinical supply of the TG vaccine clinical trials that we are planning to start later into the year. We also, of course, recognize increased expenses for circular RNA research, but there are smaller amounts we're talking about preclinical research. All other expenses are in line with previous quarters. On the financial snapshot, you can see the cash flow is less than our expenses this quarter because we had deferred some of the payments to later this year. This gives us our current cash balance of NOK 126 million as of today, which gives us a runway until the middle of next year. Our market cap is at a healthy level right now. And we have noticed an increased trading volume or value in our shares showing reflecting a stronger interest in Targovax shares, which is also reflected in the shareholder base where we have now many more shareholders today that we had last year. And with that, I hand over to our Chief Medical Officer, Lone Ottesen.

Thank you, Lubor. So I'll take you through our clinical activities. It has been extremely busy since our last quarterly report. In this slide, you can see a schematic of our development activities. And we have the Phase II study with ONCOS. ONCOS is our lead product. We have the Phase II study in PD-1 refractory melanoma, starting very soon. PD-1-resistant melanoma is a very aggressive stage of the melanoma disease, where the checkpoint inhibitors have stopped working, and I'll go through in more details how we plan to demonstrate the value of ONCOS-102 in this setting. On the Phase II mesothelioma trial and mesothelioma is a very aggressive cancer in the lining of the lung. We have presented the final overall survival data from this small randomized trial. We presented this at the most prestigious oncology conference, ASCO, in June. And we were able to demonstrate that the addition of ONCOS to standard-of-care chemotherapy increases the 30-month survival rate by -- it nearly doubles the 30-month survival rate from 18% to 34%. So very impressive data. Finally, on our mutant RAS peptide vaccine. We have a multiple myeloma study starting in Norway. Myeloma is cancer in the bone marrow. And this trial has now been submitted to the authorities. We are awaiting feedback, which could be any day now. And this will enable first patient in the trial later this year. We also have a U.S. trial with FDA IND approval, where we expect to have the first patient included later this year. So lots of activity. This is a schematic of our next trial. This is a very ambitious multi-cohort Phase II trial that includes some very exciting compound, also a second-generation CTLA-4 inhibitor in combination with ONCOS and also in combination with a PD-1 inhibitor. We have shown this schematic before, and the trial work is progressing really well here. We've had FDA feedback on this design and the protocol has now been submitted for FDA review. The key -- I'll sort of take you through all the steps we need to complete in this trial that will ultimately lead us to the bottom right corner of this slide, where you can see the triplet combination of ONCOS-102, balstilimab and botensilimab, which is the ultimate goal of this trial. So to get there, we need to do sort of a few steps ahead of this. We want to maximize on the efficacy of ONCOS-102 in combination with a PD-1 inhibitor. We've previously seen a very attractive response rate of 35% with such a combination, but now we want to see if we can take that even higher. To that end, we are increasing the dose of ONCOS-102 by 3 times, and we will look at that high dose as single agent and in combination with the PD-1 inhibitor. On the part 2 of the trial, you will see that we will continue to expand the cohort of ONCOS and balstilimab. We want to get to a large cohort size that will make this trial useful also for external partners. We want to look at a combination of ONCOS-102 and botensilimab before we get to that triplet that we believe could be a real game changer in this setting. The combination of balstilimab and botensilimab has just delivered unprecedented data in metastatic colon cancer. So we believe that our triplet could be pretty amazing. So in summary, this trial, we believe, provides some really great opportunities for us. In addition to the triplet combination I just mentioned, it has a compelling design, it will give us data sets of sufficient size for new partners. And we also firmly believe that this data sets can drive expansion of ONCOS-102 into earlier settings of melanoma. And -- so on the -- our peptide vaccine, I would like to provide an update as well. As you can see, we have reintroduced our KRAS vaccine into the clinic. This is -- the KRAS area is a very hot area these days. Our peptide targets all RAS mutations. These mutations drives up to 30% of all cancers. We do have approvals in the setting of small molecules, but we need to recognize that these molecules only focuses on a subset of the KRAS mutations, the G12C mutation, which is mainly relevant in lung cancer, whereas we go much broader. We are in a unique position in this area with limited competition, and we are focusing on different indications compared to competitors. Finally, we have forged international collaborations on TG01, both in Norway and in the U.S. And we have also gotten 2 very prestigious Norwegian grants from Innovation Norway and from the Norwegian Research Council, that partly goes towards funding these trials. So a very cost-efficient approach. That rounds off my part of this presentation, and I'll hand back to Erik. Thank you.

Thank you, Lone. So hopefully, we've convinced you that Targovax is poised for success on all of our 3 pillars going forward and really have a rich flow of opportunities before us. On ONCOS-102, we are convinced that we have designed a very smart trial to knock it out of the park, generate ORR data that clearly separates our triple combination of ONCOS-102, balstilimab and botensilimab beyond what the competition can achieve. And the aim is that with good data from this trial, we will out-license the program, and that's how we plan to capitalize on ONCOS-102. On the KRAS program, we have enhanced the vaccine, improved the potency and we're creating a broad set of opportunities in multiple trials, indications and collaborations that creates several shots on goal and several opportunities for partnerships and value creation in the future, all at low cost to Targovax. So the cash expense for Targovax is very limited on the KRAS program, exactly as we have promised to do in the past. And then looking forward, we believe that our circular RNA program really is the engine that can deliver a pipeline and a platform of candidates and opportunities for the future. There is a strong momentum at the moment for circular RNA, both from investors and several business development deals, and we are really 1 of the early riders of this wave, which is already here. Our strategy here is to demonstrate that our concept works, build a platform and then attempt early preclinical partnerships. So this concludes the formal presentation for today. And I invite Lone and Lubor back to the podium, and we will take questions from the audience.

Okay. First, we got some questions on ONCOS-102 and Mela 2 design. What are the next steps for the melanoma Phase II study? And when do you expect to start enrolling patients?

Thank you. I'll take that one. The Mela 2 study, as I showed, has been submitted to the FDA for protocol review. We expect to get the go ahead later this year, here in Q3, actually. We expect to start enrolling patients, Q1 in 2023. And that we will have enrolled Part 1 in a 12-month time frame. Based -- sorry, based on Part 1, we will then determine what is the recommended Phase II dose, and we expect that to take place in the beginning of 2024.

And when are the results from the melanoma Part 1 higher dose exploration running expected to be ready?

So we will have the data to be able to establish the recommended Phase II dose. So that will be the first half of 2024.

You chose a partnership with Agenus instead of Merck or BMS. What was the rationale for this?

Yes, I can take this one. We are driven by the science. We want to combine with the CTLA-4 because it makes sense mechanistically CTLA-4 is expected to do systemic activity deepened and prolonged responses. And also from our Phase I, we see that CTLA-4 is strongly upregulated in response to ONCOS-102 treatment. Now we simply went out look for the best CTLA-4 around, and Agenus has the only clinically validated second-generation CTLA-4. So this was driven by botensilimab. We're convinced about this molecule. So we went to Agenus and they, fortunately, were also impressed by our data and happy to collaborate and supply botensilimab and balstilimab to the trial.

And I may add that the other advantage was that Agenus also had a PD-1 inhibitor in the development pipeline, which is competitive or earned equal par where the nivo and pembro, and it's much easier to work with 1 partner in a clinical trial, that gives us more freedom, more flexibility in designing the study and more control for the future. And of course, in addition, we have the relationship already with QS-21 for our TG program. So it's advantageous to have 1 partner to deal with.

Thank you. And then we have some questions about finance. Your current financial situation is not sufficient to fund the next clinical study for ONCOS-102 plus all the other research activities. How are you planning to finance this broad pipeline going forward?

I mean that's a fair question. I mean, like any other biotech companies, of course, we are continuously talking to investors. We are now talking to international investors like who are very experienced in the space to really understand the value of Targovax and these programs that we bring forward. We see a lot of interest from them. So we get further feedback on the 102 data that we have and the study that we are planning. And of course, we also get a lot of interest on the circular RNA field. So we're currently talking to investors. -- to generate enough interest. And then, of course, like any other biotechs, we will be fundraising and raise more money in the future in order to finance all these programs going forward.

And just to reiterate, the focus of Lubor and myself at the moment is to attract the international biotech specialist investors that can support Targovax long term and agree to the plan that we have laid out here and the opportunities that lay before us.

Then we have some questions on the TG KRAS. You stated that 2 clinical studies with TG01 will start later this year, but only the multiple myeloma study at Oslo University Hospital was announced. What is the second study? And how confident are you that it will start this year?

You take that one.

So we are looking at multiple indications with high frequency of KRAS mutations. If we start with the multiple myeloma, what is unique there is that we're not aware of anyone else making or developing KRAS or KRAS vaccine in multiple myeloma. So there, we've identified pockets where there currently is no competition, we have a unique angle into the multiple myeloma space. We also think there's a particularly good chance for a vaccine to work in that kind of liquid cancer setting, eliminating residual disease. The other indications we're considering are in solid tumors. We are in very advanced discussions. We have U.S. IND approval. So we're confident that the U.S.-based trial we have communicated will start later in the year. And we will come back with an update on exactly what to do in this trial is -- it's mainly driven by the -- we're making final arrangements with our collaboration partners. It's not fully resolved between everyone, and that's the reason why it remains undisclosed at the moment, but we will update the market shortly on that trial.