Faron Pharmaceuticals Oy (FARN) Earnings Call Transcript & Summary

Good afternoon in Europe, and good morning for those on the other side of the pond. I'm Markku Jalkanen, Faron's CEO. I'm here today with our Director for Medical Affairs Inka Pawlitzky. We are going to present you the recent update of the BEXMAB data. Very exciting one, I hope you really like it. And just a reminder, after the presentations, you have a chance to really make questions, and you can already do it during the presentation, [Operator Instructions]. So welcome again, and we will move on. I will show the mandatory disclaimer because we will be making forward-looking statements. As you know, the lead product we have is bexmarilimab. It regulates the function of CLEVER-1 molecule, which [indiscernible] immunosuppressive elements on macrophages or monocytes or myeloid cells. And by that matter, it can generate a significant suppressed immune environment to control the host defense system. And obviously, cancer is typically 1 disease group that actually would like to utilize that in order to grow in us and then metastasize. We also know that this regulatory pathway can generate an interferon signaling and this signature is known to be really important for the current immune therapies, without it they have a lousy efficacy levels. And obviously, that is very interesting to us. Having said that, we have really focused recently this lead program we have with the myeloid leukemia. And why it is so interesting is really the fact that now we have the same receptor of the surface of these cancer cells. We have made a significant progress, and we tell the results in a minute. But on the background, we have also made a significant interactions with the regulators. And obviously, when you are in the drug business, in the development business, you have to really coordinate and align with the regulators like FDA, EMA and the Finnish authorities. And those -- some of those we have already announced, but I'm pretty sure that there will be further information available later this fourth quarter of this year. So bexmarilimab, blocking antibody for CLEVER-1, and we know, and we have shown this previously. This is almost like engineered to be in this position to activate the immunity by controlling the monocyte, phenotypes. When they are in the circulation, these myeloid cells are called monocytes, when they penetrate to the tissue, they are macrophages. But at the same time, also block the CLEVER-1 on the surface of the acute myeloid leukemia cells. And just to remind you, right away, now, there's no really good treatment for these myeloid leukemia at the moment. So when CLEVER-1 receptor is blocked on the surface of these myeloid leukemia cells, it will cause a signaling change for the cells and that would decline the use of oxidative phosphorylation and when you do that, you set off the gas production and gas for the cells is ATP. And obviously, when cells runs out of the gas, you lose your viability. So this combination of activating our immune system and then declining the viability is a perfect example really to be utilized now against the acute myeloid leukemia. Cells born in the bone marrow and then spread all over the body and then replacing our -- really important [indiscernible] blood cells and that causing then usually severe infections and obviously, death of the patient. So we also learned that by combining with standard for care, which is now practiced with the acute myeloid leukemia, we can even sooner seize this viability drop effect and obviously, that could really explain why we have -- saw excellent results from this BEXMAB trial. We have been contacted now a bit more than a year. I want to say this is not too complex, but the take-home message is twofold. As you see from the title cells, giving bex to the patients, these leukemia cells, we do activate the bone marrow immunity. We can see that in the increased antigen-presentation capacity of the cells, we can also see on the right-hand side, increased accumulation or lymphocytes into the bone marrow. Both are clear signs that the activation of immunity is increased. You can see also from the figure, if you look at carefully that there are dosing levels of our current trial indicated and it looks to us that the jump from 1 mg per kg to 3 is a significant one, and it's not necessarily any more increased. So the dosing we selected already during the MATINS trial and post MATINS trial is pretty much predicting the outcome of the trial also at this point. And obviously, we are very happy for it because then we know that we have a similar principles really also applied as we had with a solid cancer patients, so very exciting. And then I would like to ask Inka to continue from here, please.

Perfect. So I'm going to recap our BEXMAB study, which is investigating bexmarilimab when combined with standard of care therapies. So the BEXMAB study is a Phase I/II study. The Phase I is a dose finding study, and then this is followed by a Phase II, which is the efficacy evaluation of the combination treatment. And like Markku already mentioned in the dose finding, we have now evaluated 3 different dose levels. And I think we have -- we think that there is sufficient data to analyze to now move rather swiftly into the Phase II. And we will focus, of course, on the doublet arm, which is on top shown in the yellow bar, where we are investigating 3 different population of patients. One is frontline MDS patients, who has never received treatment for their disease. Then we are also investigating MDS patients that had prior HMA-based therapy and we are investigating relapsed/refractory AML patients. And the combination that we are investigating, we are calling the doublet, and that is bexmarilimab plus azacitidine. And azacitidine is actually an HMA-based therapy. And so this is the current status of our trials where we are finishing up the dose finding part. And we are working together with 6 clinical sites, 4 in Finland and 2 in the U.S., and we are anticipating to open an additional 3 sites in the U.S. this year. And based on the emerging data, our current focus is to move the MDS, HMA failed population as well as the relapsed/refractory AML population into the Phase II. And now maybe the most exciting or the update on where we are in October versus where we were in July. So basically, since July -- mid of July until now, we have now actually enrolled a total of 28 patients, but efficacy data is presented here in the graph from 22 patients because 6 patients have not completed at least 2 treatment cycles. So we have now 7 in total, 7 additional patients since July, where we also have efficacy and safety data that we will present. And just a high-level summary, in green, you can see on the slide where these patients are based on the best change in their percentage of bone marrow blast. And you can maybe appreciate that, first of all, bexmarilimab continues to function rather well, directly in the bone marrow of the majority of patients because we can see a blast reduction also in the majority of patients. And maybe then the next slide, so here, we are showing you basically out of the 22 patients that we are presenting the efficacy data today of -- 11 actually show an objective response, and these 11 patients are summarized here in the swimmers plot. And the different populations or malignancies are shown based on the color of the bar. And if you maybe focus on the blue bar, these are the MDS patients that had prior HMA therapy, meaning these patients have previously been exposed to azacitidine, which is the combination partner that we are investigating in the BEXMAB trial. You can appreciate that the majority of these patients actually respond, 2 remain on treatment. And then we put -- at around 4 months, we put the median overall survival of the MDS failed population, as it is reported currently in the literature. And you can see that we are -- basically 3 of the 5 patients -- or 4 patients that are shown here have an extended overall survival versus what the median overall survival of this population would be. And then if you maybe focus on the purple bar, this is the relapsed/refractory AML patient population. It's a very difficult to treat population with no standard of -- yes, of therapies around. So also here, we are seeing rather promising long duration of responses in the 2 patients that we are showing here as responders. And to highlight, again, the MDS, HMA-failed population of patients, also that population is basically without any standard of care therapy. So the combination treatment again, extends potentially the overall survival of 3 out of the 5 patients. One patient is rather new in the study. So this is the fourth [ bar ] at 6-milligram per kilogram where we see disease stabilization, but also this is accompanied with blood count recovery. And otherwise, I think this is really promising data for this patient population, again, as there's no standard of care of therapy for this population. And then moving, of course, via -- in a dose finding phase of their safety is the primary endpoint for this Phase I of the BEXMAB study. So here, we are providing you the updated safety that we are observing. So overall, bexmarilimab continues to be well tolerated in combination with azacitidine. As mentioned, we now evaluated 3 dose levels, 1, 3 and 6-milligram per kilogram. And on the left side, you can see the treatment-related adverse events. So these are adverse events that are related to bexmarilimab. And out of the total adverse events observed so far in the BEXMAB study, these are around 8% of all adverse events. And the majority of these 18 single events is of Grade 1 and 2 in severity. We do observe in total, 5 events that are either Grade 3 or above and 2 of these events -- related events also led to discontinuation of the patient. But if you look closely, again, now on to the left side, the blue table, we are listing here now all of these 18 events. And for us, these results indicate again that we are not seeing any different safety pattern as has been observed previously with bexmarilimab at these doses, for instance, in the MATINS trial. So there's no related adverse event that wouldn't -- yes, that hasn't been observed before. But I do want to highlight that we are observing related events that are immune related. So there, we have 3 events. This is basically the COP then the CLS and the HLH. It's written out what these event or what these diseases or conditions mean, and these are of -- yes, again, they're immune related and they are of Grade 3 or higher that we have observed. And it's not a surprise in the end because bexmarilimab is an immunotherapy. But we also, during the dose escalation for the 3 dose levels, we have not observed its dose-limiting toxicity. So as I said, bexmarilimab in combination with azacitidine remains well tolerated in the patient populations. So to summarize our update as of today, so we do see a very encouraging data in the patients, especially in the indications of high unmet medical need, like relapsed/refractory AML and MDS patients that have failed prior HMA therapies. Again, bexmarilimab remains well tolerated in the combination setting with azacitidine. And we are particularly, yes, encouraged also in observing these durable responses in the combination. And that's really, I think, something that patients derive the most benefit from. So overall, we have observed, again, 11 responses out of 22 patients where efficacy data is evaluable across the 3 dosing cohorts. And now if you particularly focus on the 1 milligram per kilogram. So there we have observed 1 response each. So 1 is a complete remission, then complete remission with incomplete blood recovery and a partial remission. At the 3-milligram per kilogram, we have observed 2 complete remissions and 1 complete remission with incomplete blood recovery. And at the 6 milligram, again, 2 complete remissions and 1 marrow complete remission. This is a very encouraging data for us now to take forward into the Phase II, where we will further evaluate the efficacy of the combination setting. And I think the most encouraging also, this is what we hear from the investigators is that, for instance, we have 1 patient -- is actually the first patient that entered the trial that now remained on treatment more than 16 months and continues to play golf. This is the comment we get from the investigator. So it's very interesting and also really encouraging for us to see that there is really the potential to provide the benefit to the patients. As I mentioned already, we will now focus to move rather swiftly into the Phase II and we will focus on the MDS population that failed prior HMA therapy as well as the relapsed/refractory AML population. We did obtain orphan drug designation from the FDA for AML, and we are planning, I think -- we are putting all the pieces in place in terms of clinical and regulatory strategy to have a BLA application filing planned for 2025.

Thank you, Inka. In order to understand the severity of this condition, I wanted to show this slide. This is looking at the outcome of this MDS treatment therapy is what -- and which are available at the moment. If you look at the outcome after 2 years, there are various treatment choices. And on the right-hand side, you can see the outcome with all of them, which are currently used. The main result is pretty much the same. More than 90% of the patients die, and that is illustrated with these figures, blue and white ones. The only way to get rid of this condition is to have a transplantation. As you may have noticed, we already have 1 in our trial, which went through the transplantation procedure, which is always a good sign. And if you get a transplant, you have a -- 50-50 chance is really to continue your life. So it is rather amazing that in 2023, we have a situation that we don't have really good care of these patients to keep them alive. And yet, if you look at this slide, especially the third bullet points, it tells you how expensive these patients actually could be for the society or for the insurance companies, because almost $1 million could be really spent in order to help the patients and yet the outcome is this bad. So obviously, we have been using this pharma venture report, which we ordered from a U.K.-based consultancy company also to evaluate the market itself and pricing opportunities. And obviously, this is a very good guidance for us. This is also meant to prepare us for possible partner interactions, which will be very heavy this fall. We have BIO-Europe, we have ESMO and in December, the American Society for Hematology meeting, for which, by the way, we do have a poster now accepted and obviously, around at that time, there will be further announcement of this data as well because that will be part of that meeting. So very interesting situation, high unmet need, very high efficacy at the moment. You saw those green columns in those new patients indicated also that they have a very fast response because all those patients came rather late to the trial. So we maybe really have the right dosing at the moment and the right population. And if that continues, we really believe that in 2025, we have a possibility to file the marketing approval application. So just looking what happens next is really to complete the analysis, take the data to the dose escalation committee and then make the decision how we are going to continue with the Phase II. We already have Phase II protocol accepted in Finland, we are expecting to get the same from U.S., from FDA. We may announce that once that is done. And then just initiate the Phase II, and maybe along that time, we will increase also the site number in U.S. because there is a list of sites actually would like to come in. And we have been wondering why we are so popular, and the popularity is very easy to explain, very safe track, very effective in these populations where there are nothing really available. So I understand why the clinician really would like to help. And obviously, we need to take advantage of that and expand the trial then really move on and then make the Phase II recruitment really fast. And sometimes -- maybe a year from now or maybe even shorter time and we have the results of that. And at the same time, really interact with the regulators. I mentioned FDA, Fimea and EMA as important for us. And then build the program that actually could go all the way to the marketing approval application. That's very important for us. It's very important for our partner candidates, and that obviously will be something that will be intensified after these results because they are so damn exciting. So with this, I really would like to thank you for your time and listening to us, and we are happy really to take any questions you may have, please.

Thank you, Markku. [Operator Instructions]. Our first question from the audience. Congratulations on another set of strong data. Can you offer a biological rationale that might explain higher overall response rate in MDS patients that previously failed HMA therapy?

If they failed previously, they have generated a way to get around with that kind of a burden they have on themselves. Now when bex comes in, and we reduced the viability. It may be that they could not maintain this resistance anymore and we have some ex vivo data to support this when we combine these components in ex vivo setting on human cells. So we believe that this synergy is actually rather important really to move on further. And as that is a standard of care, we actually basically have a setting really to move on with that combination and really looking forward really to expand the project opportunity part next.

When could we expect additional details on Faron's plan to expand into pivotal Phase III study?

I think we are getting very close. I can't say demand and we have it, but having all these discussions during the early fall and late summer and then interactions what we have with the regulators. I believe that we have better understanding by the end of the year, but let's wait that we really get a proper alignment with the regulators and then we can talk about more.

Another clinical outcome question. What would Faron consider to be a positive outcome on the data readout in Q4 '24?

Do you want to -- that's quite easy one.

It's very easy. So we already have quite strong data that makes us comfortable moving into Phase I. So the readout of the additional ongoing 6 patients will further strengthen this data. But also, in the same time, this is a very biomarker-heavy study. So we are really analyzing the bone marrow and the peripheral blood of these patients very carefully to support, of course, the mechanism of action of bexmarilimab and then also monitoring to potentially identify the patients that might be the best responders, let's say -- just to put it into context. So potentially for patient selection, but also for the timing of the treatment. So you have to take each patient with the patient history. So these patients are coming in, they have had prior therapies. And now we have to evaluate also the risk group that are coming in with, the mutation status of their disease and so on. So this -- will all be put together comprehensively. And of course, the more patient data that we have, the stronger that data will help us also then to advance the program.

I have a feeling that the person who did this question wants to have a rather straightforward answer. And here it comes. We now have in HMA, MDS efficacy level of 80%. I showed you a graph that the other treatments, what we -- are available today is less than 10%. That would mean that we have an eightfold increase in the outcome, in the response rate. That could really even be reduced down to 50%, and it's still a remarkable result. So somewhere along there -- we cannot continue the trial forever because the 1 point -- the P values really compare to what the historical efficacy levels will become so significant that -- then we are ready to really move on to the pivotal part and to confirm the [ arm ] and then hopefully get the approval at one point. So these results, for me, almost I found them unbelievable, but that's what they are. And we should utilize them maximally. So we are not anticipating to have a significant size of the trial to complete this process. Definitely less than 100 patients, but would that be 60, 70 50, I cannot really commit myself yet to say that. But maybe having additional data, then we can do it. Thank you. It's a really good question. Thank you very much.

The next question, how is bex differentiated from other agents currently in development in the space, specifically anti-CD47 magrolimab.

I thought that I'm not going to mention anti-CD47. But as when it was now asked, we all know that Gilead has some problems of taking it forward and it was put on hold. I don't know what will happen to that one. But the mode of action is completely different, and we do have evidence, which I didn't have here in my talk, that the activation pathways, they activate are completely different among the microenvironment of tumor or cancer. So there's really nothing in common with them. So don't -- it missing now is not at all close to our mode of action, we really activate and reprogram the macrophages from the immunosuppressive profile into immune activators, which then can actually activate a number of other genes. And when we have looked at these other genes, you find some very interesting molecules like TREM1, MARCO, DTF-beta. So in my -- when I saw that I felt that, CLEVER-1 is the master genes for these other genes, and we can regulate the CLEVER-1. So that is a very important point. I wanted to say, and I'm not saying more about the anti-CD47, but I think we are in the front line at the moment with anti-CLEVER antibody.

The next question comes and wants us to touch on the possible partnering negotiations and conversations.

They're ongoing, like I have said, and I hope that this data will stimulate them even further. What can I say is that we have inbound discussions nowadays and obviously, that is the sign that the data has been recognized. Already after the July report, and obviously, this will activate it even more. And all those meetings, what is around in this fall, ESMO by Europe, ASH meeting and then JPMorgan event in January, where we got the invitation already. So these are the places where we can meet new ones, but the existing ones which already have been discussing with us, those discussions will be intensified. Can't give a precise timing, when -- I'm more after a good return for the shareholders than timing at this point.