Everest Medicines Limited (6HN.F) Earnings Call Transcript & Summary

Good evening or good morning. Welcome to mRNA Therapeutic Vaccine Program Update Call of Everest Medicines. Please be advised that today's conference is being recorded. [Operator Instructions] And finally, I would like to hand the conference over to your speaker today, Ms. Leah Liu. Please go ahead.

Thank you, operator. Good morning or good evening to everyone, and welcome to our call today to discuss the recent developments on our mRNA Therapeutic Vaccine Programs. Joining us today are Mr. Rogers Luo, our Chief Executive Officer; Mr. Ian Woo, President and Chief Financial Officer; Dr. Jennifer Yang, our Chief Scientific Officer; and Sandra Zeng, our Chief Medical Officer. Before we get started today, I would like to remind you that the figures on this conference call may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the company or its officers with respect to the business, operations and financial conditions of the company, which can be identified by terminology such as will, except, anticipates, future, intends, plans, believes, estimates, confident and similar statements. Such forward-looking statements are not guarantees of performance and involves risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The company or any of its affiliates, directors, officers, advisers or representatives have no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call, except as required by law. And now I will hand over the call to Ian to give you an introduction on our mRNA vaccine programs. Ian, over to you. Thank you.

Thank you, Leah, and good morning, everyone. Thank you all for joining us on this call. We are here, as you can see in the agenda, to discuss a future organic growth driver for Everest, which is our internally discovered pipeline of mRNA Therapeutic Vaccines. But I also wanted to take this opportunity to mention that we have already created a strong revenue base through our unique and growing commercial asset portfolio, which includes products such as Nefecon, XERAVA and VELSIPITY across Greater China, South Korea and Singapore. Our commercial verticals of nephrology, immunology and infectious disease have the potential to deliver RMB 10 billion or approximately USD 1.5 billion in peak sales over time, and we are now approaching corporate-level profitability. To supplement the contribution from these products and grow shareholder value, we are now rapidly advancing a pipeline of attractive and differentiated mRNA therapeutic vaccines, including personalized cancer vaccines, tumor-associated antigen vaccines and an in vivo CAR-T platform that could be used for both autoimmune and oncology diseases. We have been working on this platform and these programs for several years, and today, we will discuss our progress on these important assets, which carry global rights that may facilitate partnerships and create a second powerful growth engine for Everest. I would now like to turn it over to Dr. Jennifer Yang to discuss our programs. Dr. Yang?

Thank you, Ian. At Everest, we have a fully integrated and clinically validated mRNA platform and established end-to-end capabilities across value chain of this platform. Our proprietary mRNA antigen design algorithm can ensure high expression of target protein. Our proprietary LNP delivery system can lead to enhanced T-cell immunity suitable for cancer vaccine. Our CMC process development capability ensures robust DS and DP production. Last but not least, our self-owned manufacturing facility has successfully produced different batch of [ GMP ] material. The mRNA sequence design algorithm is enabled by AI modeling. The first-gen algorithm focused on optimization of codon usage and minimize sequence liabilities. Our second-gen algorithm further took into consideration of RNA secondary structure. And the third-generation algorithm is an AI scoring model to co-optimize [ UTR and CDS ] to further increase mRNA stability. As shown in the bottom graph, with the third-generation AI-assisted algorithm, we can achieve a fivefold more protein expression as compared to that generated from first hand algorithm. Even for a commercial enzyme like eGFP, our third-generation algorithm can further enhance its expression. AI has also been used in our efforts for the high-throughput lipid screening. It not only expands the diversity of the lipid library, but also increase the screening efficiency. As a result, we now have an in-house proprietary organizable lipid library. Shown on the left side, top channel, you can see in our library, we have more lipids that can generate high immunogenicity as compared to the benchmark MC3 and SM-102 lipid. If you focus on the top middle panel, we tested our in-house lipid A for 3 different antigens; antigen 1, antigen 2 and antigen 3. For all 3 antigens, you can see our LNP with our own lipid A can generate higher immunogenicity compared to that from MC3 and this does translate into better antitumor efficacy as depicted in the right-side graph. To minimize potential toxicity liability of lipid, we want our [indiscernible] lipid to be biodegradable. As shown in the bottom graph, this is a rat PK study. You can see our lipid A has a faster clearance rate compared to SM-102 in both the plasma as well as in liver. This proprietary delivery system can also achieve tissue and cell-specific delivery. They are either passive or active targeting. As you probably know, classic LNP tends to enrich in liver, very few of them will end up in spleen. With our own proprietary LNP, we can de-target liver and enrich the antigen expression in spleen. By conjugating targeting moiety such as monoclonal antibodies on the surface of LNP, we can further achieve cell-type specific delivery. Shown as an example in the bottom graph, here, we conjugated a T-cell targeting antibody, and you can see in mouse in vivo experiment, target antigen or protein expression is specific for T cells. There was no expression in other immune cells such as B-cell, NK cell or monocytes. With this platform, we've established a pipeline of mRNA therapeutics. The most advanced one is our personalized cancer vaccine PCV program, EVM16, which has commenced an investigator-initiated trial in China. We are glad to announce that first patient was dosed on March 4. Our off-the-shelf TAA cancer vaccine program, EVM14 has successfully completed over IND-enabling studies and U.S. R&D was submitted last month. The in vivo CAR-T program has made significant progress last year and achieved preclinical proof of concept, and we recently also completed a nonhuman primate study and this program continues to progress towards preclinical candidate selection. Now in the next session, I will give updates on the progress made for all 3 programs. First is our personalized cancer vaccine program. As you probably know, personalized cancer vaccine utilize neoantigenous target for vaccine design. So what are neoantigens. As you know, during the cancer progression, tumor cells accumulate a lot of somatic mutations. And these somatic mutations will generate neoantigens that is only present in the tumor cells, not in normal cells. These neoantigens can be processed and presented on the surface of tumor cells and can be recognized by immune cells like T cells to launch immune response against cancer cells. Neoantigens in all case, have been used in vaccine and other types of immunotherapy, such as TCR-T and they've been studied in the treatment of many types of cancer. Personalized neoantigen cancer vaccine has made -- has generated promising early clinical signals. They can significantly reduce recurrence and enhance IO response in multiple types of cancer. Shown here are 2 examples. The left side is a PCV from BioNTech. In the pancreatic cancer Phase I study, it was found that at 3.2 years follow-up, 75% of responders were recurrence free as depicted in the top left side figure as the red line. The nonresponders has a median IFS of only 13.4 months. So this represents a reduction of 86% recurrence risk. More interestingly, after a booster shot, it was found that neoantigen-specific CD8 T-cell clones have an average estimated life spans of 7.7 years, and 20% of the clones have an estimated lifespan greater than 10 years, suggesting that PCV can elicit memory T cells in patients. And these memory T cells are long-lived, can combat cancer and prevent recurrence. Right side is another example of the PCV for Moderna, mRNA-4157. In the melanoma trial, it was found that at 3 year's follow-up, the recurrence risk was reduced by 49% compared to KEYTRUDA monotherapy and the death risk is also having an encouraging reducing trend. So we all know not all neoantigens are immunogenic. There are certain requirements that needs to be met for inducing a robust neoantigen T cell response and tumor killing. For example, there needs to be presence of somatic mutations and these mutations needs to be expressed and neoantigen needs to be presented and the availability of neoantigen-specific or cross-reactive T cells need to be present to fight tumor cells. So to identify the most immunogenic neoantigens from hundreds or thousands of mutations is actually the key for success for PCV. At Everest, we developed a proprietary machine learning-based neoantigen prediction algorithm named EVER-. This algorithm took into consideration of many aspects of strong immunogenic neoantigens and we can ramp these immunogenic neoantigens and design them into a vaccine. We first validated EVER-NEO-1 in human neoantigen immunogenicity data, we used 2 different data sets. One data set is from 2 reactive MHC class 1 neoantigens in more than 7,000 mutations from 39 cancer patients. We test the ability of EVER-NEO-1 to capture immunogenic mutations and did a head-to-head comparison with an industry-leading neoantigen prediction algorithm MSKCC algorithm. This algorithm was developed by Memorial Sloan-Kettering Cancer Center. As you can see from the top table, if you took the top 20, top 30 or top 34 neoantigens, our EVER-NEO-1 algorithm performs superior to MSKCC algorithm and that we can capture more immunogenic neoantigens. The second data set we used was a published PCV mRNA vaccine Phase I study immunogenicity data. Again, we are glad to see EVER-NEO-1 performed very well in this data set. We can capture majority of the high immunogenic neoantigens, especially for those CD8 neoantigens. Our capturing rate reached 84%. In addition to in silico validation, we also validated EVER-NEO-1 in preclinical animal models. Here, we took mouse tumor and blood. After next-gen sequencing, we used EVER-NEO-1 to predict and select immunogenic neoantigens and assemble them into a vaccine called EVM5. In the mouse immunogenicity study, as shown in the middle panel, you can see that EVM5 vaccination elicited strong T cell response, much higher than those elicited by a positive control vaccine. So the positive control vaccine, we used all literature reported neoantigens and put them into this positive control vaccine. In the syngeneic mouse tumor model, you can also see that EVM5 treatment leads to greater antitumor efficacy, the tumor growth inhibition, TGI reached 84%, whereas the positive control vaccine only has a TGI of 63%. We also show that PCV vaccine in combination with anti-PD-1 antibody showed a strong synergistic effect in T cell activation. In both the early treatment setting as well as the advanced disease setting, the combination group always elicited stronger T cell activation, supporting the exploration of this combination in clinical studies. PCV vaccine can also stimulate potent and sustainable T cell response in NHP in monkey in a dose-dependent manner. And interestingly, after booster shot at day 161, you can see T cell response can be further stimulated and the T cell response is sustained up to day 182. In preclinical toxicity studies, personalized cancer vaccine showed a favorable safety profile. With that, we've launched an [ IT ] study in 2 top cancer hospitals in China. Fudan University Shanghai Cancer Center and Beijing Cancer Hospital. In this Phase Ia study, we are evaluating safety, tolerability of EVM16 monotherapy as well as in combination with anti-PD-1 antibody to determine RP2D of EVM16. We'll also be evaluating immunogenicity in other clinical aspects in this trial. And we are back to announce that first patient was dosed on March 4. In the next year or 2, there will be more multiple important milestones for PCV, including a Phase III data readout of Moderna's PCV in adjuvant melanoma setting and a Phase II data readout of BioNTech's PCV in adjuvant colorectal cancer. We hope that this new class of cancer vaccine can bring clinical benefit to cancer patients. Now I'm going to introduce the second program on Tumor-Associated Antigen TAA cancer vaccine program. So EVM14 is an off-the-shelf TAA vaccine. There are certain advantages of TAA cancer vaccine. First of all, this cancer vaccine usually have good tumor specificity as those TAAs are only expressed at high level in tumor tissues, very limited expression in normal tissue. Second, because there are more T cell epitopes in the TAA vaccine, therefore, there is no HLA selection needed for patients. This is in contrast to the TCR-T type of therapy. Due to its off-the-shelf nature, this type of vaccine is well suited for advanced disease setting. Compared to PCV, TAA vaccine has much reduced manufacturing costs, and it also has potential to be applicable for multiple cancer indications. TAA vaccine has shown promising early clinical signs. An example here is BioNTech's TAA vaccine BNT111. This vaccine has 4 TAA. In the Phase I ICV relapse melanoma trial, you can see that vaccine in combination with anti-PD-1 can give 35% ORR, suggesting that advanced stage cancer patients can have benefit from this type of vaccine. Our EVM14 is a bivalent vaccine designed to target 5 TAAs expressed in squamous non-small cell lung cancer as well as squamous head/neck cancer. In vitro, we observed good expression of all 5 TAAs. In a mouse immunogenicity study, EVM14-elicited dose-dependent immunogenicity and with the highest immunogenicity achieved at 10-microgram dose. If you focus on the left side graph, each of the color indicates 1 TAA. And you can see a general trend of dose dependence in this mouse immunogenicity study. And this does also translate into quite impressive antitumor efficacy as shown in the right side graph. The black line indicates mice treated with PBS. The green line mice treated with controlled mRNA. For this controlled mRNA, there is no TAA present and group 3 to 5 mice treated with EVM14 at different doses. Again, 10-microgram dose gives the best antitumor efficacy. We also looked at a mechanism of action of EVM14 and found that 2 doses of EVM14 can significantly enhance T cell infiltration into tumor cells, especially increased cytotoxic T cell activation was observed. As you can see from the right side top panel, Group 2 are mice treated with EVM14 for the T cell marker as well as the cytotoxic T cell marker coenzyme B and interferon gamma, you can see there is increase in Group 2. In the meanwhile, 2 doses of EVM14 can also significantly decrease tumor infiltration TReg cells and exhausted T cells, as shown in the bottom 2 graphs, suggesting that vaccine treatment can have an impact on the tumor microenvironment to reduce the suppressive immune cells, which we believe contributes to the anti-tumor efficacy. More interestingly, we also found that TAA vaccine can induce immune memory and prevent tumor recurrence. In this particular experiment, after vaccine treatment, majority of the mice, 13 out of 15 mice did not grow tumor. They were tumor-free. And we stopped treatment on day 25 and on day 46 and day 90, we reimplanted tumor cells to these mice. And impressively, these mice remain tumor-free. Basically, they rejected tumor cells, suggesting that vaccine treatment induced long-lived memory T cells. And these memory T cells can combat cancer cells. So basically, these mice are cured for tumors. Combination of EVM14 with immune checkpoint inhibitors such as anti-PD-1 antibody or anti-CTLA-4 antibody can significantly enhance antitumor activity, supporting further exploration of this combination regimen in clinic. As shown in both graphs, the combination group has highest antitumor efficacy. Last year, we've successfully completed all IND-enabling studies. And we successfully submitted U.S. IND last month and CV IND submission is in progress. Now let me switch gear to introduce our mRNA in vivo CAR-T program. Recent years, CAR-T therapy has expanded its application beyond liquid tumor into other disease settings, especially for the B cell-mediated autoimmune disease. There is a great success of an anti-CD19 CAR-T therapy for refractory SLE patients. Key findings of this clinical study is that there is no relapse in long-term follow-up up to 17 months after CAR-T therapy, despite B-cell reconstitution around 4 months. This suggests that CAR-T therapy can reset the immune system. The B constitute or recurrent B cells were mostly naive B. There is no plasma blasts, memory B or activated memory B cells or pathogenic B cells. CAR-T therapy in this particular setting also has a favorable safety profile. There is no or only very mild CRS observed. Importantly, there is no immune effector cell-associated neurotoxicity syndrome. Despite of this exciting success, we understand that traditional CAR-T therapy has its own challenges. The cost of production remains to be high, and patient needs to do lymphodepletion which potentially increase the safety risk. Patient also needs to be hospitalized post treatment. Because the traditional CAR-T is in vivo expansion, the PK and PD is uncontrolled, and there are certain manufacturing challenges because there is variation in cell quality. We think in-vivo CAR-T can address the majority of these challenges. First of all, in-vivo CAR-T, like a traditional medicine, it is off the shelf. So it's easily scalable. There's no lymphodepletion needed and hospitalization may not be needed for the patient. The PK/PD is more predictable and quality is more controllable. There are 2 platforms to achieve in vivo CAR delivery. At Everest, we used the mRNA targeted T LNP system to achieve in vivo CAR delivery. So let me explain how this in vivo mRNA CAR-T works. We conjugate a T cell antibody to the surface of mRNA/LNP. Once in vivo, this LNP can bind to the surface of T cells. After endocytosis, the CAR encoding mRNA will be released in the cytoplasm of T cells and translated into CAR protein and expressed on the surface of T cells. So it turns a regular T cells into CAR-T cells. Last year, we have made significant progress for our mRNA in vivo CAR-T program. We've developed a robust conjugation method to ensure consistent and high efficiency conjugation. We've also identified appropriate targeting moiety that allow specific and high expression of CAR in T cells and in humanized mouse tumor models, we've shown antitumor efficacy in target cell depletion. We've also done studies in nonhuman primate model and showed good T cell transfection and high CAR expression. Moving forward, we will progress all these programs. And for EVM16, the personalized cancer vaccine program, we aim to complete Phase Ia part of IT study this year. For the EVM14, TAA cancer vaccine program, we anticipate to receive R&D approval in U.S. and China to start Phase I study. The in vivo CAR-T program, we anticipate to generate first preclinical candidate this year in preparation for moving this program to clinic. All of these programs do have great potential for global partnership. With that, I'll hand over to our CEO, Rogers for closing remarks.

Thank you, Jennifer. As you can see, we have made remarkable progress in our mRNA platform as we just announced that the first patient has been dosed for our first personalized cancer vaccine. EVM16 in China this week, this is a great milestone for our in-house R&D program. We are expecting a catalyst to reach 2025 with preliminary human data readout from the EVM16 later this year. In addition to EVM16, we have submitted our IND application to U.S. FDA for EVM14 off-the-shelf TAA vaccine in February. And we plan to file IND application to China's NMPA in first half of this year. Those all would mark the company's first IND submissions and approvals of our first developed products. Our in vivo CAR-T program is also expected to achieve the first preclinical candidates milestones later this year. As Everest holds global rights to all these mRNA therapeutic vaccine programs and assets, we may seek a global partnership opportunity or BD opportunities to all of our current mRNA therapeutic assets to benefit patients globally as soon as possible. These will be an organic driver for the future of Everest's growth. Thank you.

Operator, can you see if we have any questions on the line, please?