Faron Pharmaceuticals Oy (FARN) Earnings Call Transcript & Summary

Hello, everybody. This is Juho Jalkanen, CEO of Faron Pharmaceuticals. It gives me immense pleasure to be with you today here and share the discussion we had with the FDA on our possible Phase III registrational study plans for treating MDS. For today's agenda, we're going to recap on what has brought us here shortly, then we're going to go into the discussion with the FDA, hopefully, so that you could almost be a part of it. And then we're going to discuss the impacts it will have on our clinical development plan, summarize that up. And I will also be providing this in Finnish. As many of you know, we have a big, big group of fans average everyday people, Finland, they follow us closely. So I know on this call, there's people from pharma, there's people from the investor side but we wish to educate the broader audience on what we do, so they can share the excitement and follow us on our progress. First of all, recap on the data. And on the left-hand side here -- many of you know this slide on the left-hand side is what's currently available for patients with relapsed/refractory MDS. Awful condition, nothing really effective out there, overall survival is extremely poor. So hardly no chance. On the right-hand side, then again, what we bring to the table with bexmarilimab together with azacitidine, already seen in Phase I, results have continued in a similar manner in Phase II, which is very encouraging for us. First of all, the drug is well tolerated. It really seems to have a positive impact on survival, given of course, the good response rate. So it really looks like we are making a deadly disease chronic and even more exciting, taking patients into remission into bone marrow transplant to even have a possibility for cure for this otherwise deadly cancer. So with these results in mind, we approached the FDA on -- we're currently on the Phase II, aiming to have enrollment completed by the end of the year and what should come then after that, the Phase III plan. So we proposed to the FDA. Ultimately, the main goal is to prove and confirm for good that BEX can overcome resistance and enhance the efficacy of azacitidine, that needs to ultimately prove in a randomized setting against the comparator. We proposed to the FDA a Phase III open-label trial of BEX plus AZA against investigators' choice of HMA, so that the investigator, the treating physician and the patients would have at least some hope of getting some kind of benefit. But usually another HMA after AZA doesn't really work. And it was really seeing unfeasible to put a patient back on AZA that had already failed on AZA. So that was basically a no go. Overall, the FDA accepted also this Phase III in relapsed/refractory MDS. But it was a vibrant, very collaborative discussion, it went up to the fourth hour we had with them, discussing on the problems in the refractory setting. And ultimately, many times during the discussion, FDA strongly encouraged us to run the confirmatory trial in the frontline setting. So not to a Phase III in the relapsed/refractory setting, but move directly into a Phase III in the frontline setting ultimately testing and proving that AZA plus BEX is better than AZA and placebo. And they referred us to the project's frontrunner. It's a new initiative from the FDA, a bit like Project Optimus that we're currently on. And we're going to have a look at this, what this actually mean. So like we before with BEX and other companies and academic people have said, a lot of these immunomodulatory agents, they come a bit late after all those chemo and need a working immune system. So FDA has brought this new initiative forward so that promising new treatments could be advanced as soon as possible to the frontline setting for the benefit of a wider population and especially in settings where there's a big unmet need. So per the guidance in this diagram, there is the traditional single-arm Phase II in the relapsed/refractory setting. And instead of continuing that, you start the Phase III randomized confirmatory trial in the frontline setting. Accelerated approval for the relapsed/refractory population would be achieved with the single-arm Phase II if and when confirmed from an early interim readout by the confirmatory frontline study. Accelerated approval for the frontline setting could be also achieved later in the same study with the response rate read out and eventually full approval with the survival benefit as nowadays traditionally seen. So given this guidance, we can actually very nicely place our own trials here. This is what it would look like in the context of developing BEX for higher-risk MDS. There in the upper red arrow again, the current BEXMAB Phase II were running. And in the lower red arrow the proposed frontline blinded study. And again, as previously communicated for the Phase III we are looking to partner. So ultimately, the current Phase II would be a Faron trial and the frontline Phase III will be a partnered trial. This has significant impact on many factors. Basically, you get 2 birds with 1 stone. So one single Phase III to support approval in both relapsed/refractory and frontline higher-risk MDS. A separate Phase III would not be needed in the relapsed/refractory population and the current Phase II would be the registrational trial. A separate Phase II would not be needed for the frontline population either. So in a sense, this radically cuts development cost and timelines thinking of -- for the more public audience, they're thinking of what does this mean? It's tens of millions of dollars in clinical trials taken away. This also brings forward our sales forecast to a wider population, to frontline population, which is 3 to 4x bigger than the relapsed/refractory population. The impact on our sales forecast is hundreds of millions. So this is the magnitude of the impact this has. And of course, for patients, this is the best since also in the frontline setting azacitidine and HMAs, they don't have an excellent response rate. And we could possibly improve that. And that's what the FDA wants to ultimately see. So I know talking already around, many of you think, well, how big would this Phase III eventually be. Even the response rate we're currently seeing, it doesn't actually necessarily even have to be big, and that was also discussed with the FDA. I'm going to give you some first assumptions. We're going to come back to you later at the end of the summer and during the fall, as we progress on this new plan to have better and more specific guidance on it and how we're doing on it. But as first assumptions to give you a little bit of feeling on the size. So as mentioned, in the frontline setting, the CR rate for azacitidine is not that impressive. It's been around 16% to 18% with the recent Phase III trials with magrolimab and sabatolimab. Just have to highlight here that in the frontline setting, the FDA will be looking mainly on CR, not the entire ORR. They say that CR plus PR could be considered given that CR rate is so low with single agent BEX. Currently, in the BEXMAB trial, the frontline patients we have, which is 5, the CR rate was 80, 4 out of 5, but that's a bit too small to be sure of that number, but it's an impressive number. And with something we take a very modest approach to our assumption. So if the CR rate for BEX plus AZA would be 40 against 60 with single-agent AZA, that would mean a trial size for the CR readout of 150 patients, 75 against 75, so not a big trial even the frontline setting. Summarizing everything in one slide. So again, we recently did a significant fundraise, communicated a plan. First of all, thank you for everybody who participated. We're well on plan. The plan -- near-term plan has not significantly changed. The current Phase II in relapsed/refractory continues as planned. We will actually put more frontline patients into the BEXMAB trial to confirm the CR rate in the frontline setting to be able to design that Phase III. This is most cost efficiently done by filling the Phase I portion of the trial with more frontline patients, and we can fill up to 20, and we now have 5. We aim to have both populations, the relapsed/refractory and frontline populations recruited by the end of the year, and we will mitigate the impact to our cost run rate, so that it's not significantly diminished. This means we will have now more data coming up, 2 shots on goal, basically, so more to be excited about. This data will then be taken to an end of Phase II meeting to be able to start the Phase III. In our plans, we aim to get the Phase III started second half of next year. And again, with this plan, the accelerated approval for the relapsed/refractory population could be achieved as follow-up data comes in from the current Phase II added with an early interim readout from the confirmatory Phase III frontline study. Also, accelerated approval would later on be available for the frontline population with the CR readout. And again, full approval on the survival benefit. This is a very exciting cost-effective development plan we aim to embark on. And again, as mentioned, ultimately, we aim to partner for the Phase III. And these reductions in time and cost, ultimately, they're in the benefit of the commercial partner or the partner running into Phase III, which makes us an even more attractive candidate for partnering at the moment. So stay tuned for news to come during the fall. I'm going to thank the English audience at this time point and move to summarize this in Finnish. Thank you, everybody. Have a great summer, and we'll be back soon. [Foreign Language]