Hansa Biopharma AB (publ) (HNSA) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Hansa Biopharma AB Investor Presentation. [Operator Instructions] This call is being recorded. I'll now hand the word over to CEO, Søren Tulstrup. Please begin.

Thank you, operator. Good morning, and welcome to the Hansa Biopharma conference call on the partnership agreement in gene therapy with Sarepta Therapeutics announced earlier today. I'm Søren Tulstrup, CEO of Hansa Biopharma. With me today, I have our Chief Scientific Officer and Chief Operating Officer, Christian Kjellman; and Chief Financial Officer, Donato Spota; as well as our Head of Investor Relations, Klaus Sindahl. Our presentation should take about 10 to 15 minutes. And after that, we'll take your questions. Now please turn to Slide 2. Please allow me to draw your attention to our forward-looking statement, which applies to this presentation. Please turn to Slide 3. On today's call, we'll go through the scope of the Hansa-Sarepta partnership, and we'll discuss the issues with neutralizing antibodies in gene therapy. Further, we will review the highlights from our recent article in Nature Medicine on preclinical results from studies with imlifidase as pretreatment for neutralizing antibodies against AAV vectors used for gene therapy. We'll then proceed to outline the structure of the partnership and the associated economics. Finally, we'll discuss the gene therapy opportunity in Duchenne and limb-girdle diseases before opening up for Q&As. Please turn to Slide 4. This morning, Hansa Biopharma and Sarepta Therapeutics announced that the 2 companies have entered into an agreement for the development and commercialization of imlifidase as pretreatment prior to the administration of gene therapy in 2 selected indications. This is the first partnership in gene therapy for Hansa Biopharma and serves as a landmark milestone as we expand our intrinsic technology platform beyond transplantation and acute autoimmune diseases. The announcement of the collaboration with Sarepta follows on the heels of the positive opinion adopted by the CHMP of the European Medicines Agency just last week on imlifidase for kidney transplant in Europe and further underpins the unique features of imlifidase as a potential pretreatment of patients with neutralizing antibodies to adeno-associated virus. The structure of the partnership is intended to leverage the 2 companies' key competencies in their respective deals. Hansa will provide Sarepta with access to our immunomodulatory enzyme technology and our know-how and strong experience in developing antibody cleaving enzymes as well as the drug product. Sarepta will utilize their cutting-edge science and market leadership within gene therapy for neuromuscular diseases and experience with neutralizing antibodies-positive patients to develop, obtain regulatory approval for and eventually promote imlifidase to the market as a pretreatment ahead of their gene therapies. The scope of the agreement with Sarepta Therapeutics specifically includes an inpatient exclusive license for Sarepta to develop and promote imlifidase globally as a pretreatment in 2 gene therapy indications, the Duchenne muscular dystrophy and limb-girdle muscular dystrophy. The collaboration with Sarepta provides Hansa with significant potential economics for incremental imlifidase sales, but also a participation in the incremental value unlocking gene therapy through the upfront and potential milestone payments as well as royalties on any gene therapy sales enabled by pretreatment with imlifidase in that process of patients. In conclusion, we're very excited about this partnership with Sarepta, which represents a significant step into the gene therapy space for Hansa Biopharma, and we look forward to engaging in collaborative efforts to enable a broader range of patients to get access to breakthrough gene therapy. With this, I'll hand over to Christian to go through the medical aspects of imlifidase in the context of gene therapy. Christian, please?

Thank you, Søren. Please turn to Slide 5. This is a fantastic opportunity for us, and I will start to talk a little bit about the neutralizing antibodies. Neutralizing antibodies, or NAbs as you can also call them, they are a significant barrier in gene therapy because these antibodies prevent the effective transfer of the gene therapy vector to the target cell. And in gene therapy, it's estimated that between 5% and 70% -- up to 70% patients have antibodies, 2 different types of AAV vectors that is used. The vectors that we are talking about here in this collaboration, there is about 15% to 20% of the patients that have these neutralizing antibodies. And patients that have these neutralizing antibodies, they -- the consequence is that they are excluded from clinical studies and they may be excluded from future gene therapy too. It's our hypothesis at Hansa that imlifidase with its unique IgG cleaving activity have the potential to eliminate these neutralizing antibodies and that it can be used as a pretreatment prior to gene therapy too. And in that way, imlifidase can be able to -- can enable gene therapy in this group of patients that are excluded from -- today excluded from the therapy. And this is illustrated in Slide 5, as you can see. So far, Hansa has conducted 4 Phase II studies in kidney transplantation with imlifidase. We have demonstrated good safety profile and very strong efficacy data. We have met all the primary and secondary endpoints in our clinical study. And as we announced just a few days ago, this has led the CHMP of the European Medicine Agency to adopt a positive opinion for market approval of imlifidase in kidney transplantation in Europe. To go back a little bit to imlifidase, imlifidase is a highly effective enzyme. It has a very rapid onset, a very rapid and effective action and it's highly specific towards IgG. In fact, we have demonstrated that imlifidase can inactivate IgG in less than 2 hours after infusion in patient and already 2 hours after infusion, the antibody levels are below detectable level. Please turn to Slide 6. Imlifidase, or ideS, was recently published by Leborgne, et al. in Nature Medicine, a very high ranked medical journal. And they demonstrated or tested imlifidase in 3 preclinical models in the context of gene therapy. And the outcome of all these studies is very encouraging to us. What they did was that they tested imlifidase in 1 hemophilia mouse model. They tested it in a nonhuman primate as a treatment, imlifidase ahead of gene therapy treatment. And they also tested the effect of imlifidase on antibodies to AAV vectors in human plasma in vitro. And this preclinical evaluation looks very good. The data looks very good and very promising. To the left here, you can see the data for the mouse model. This is a model where they passively transferred -- what they did was that they injected human gamma globulin because human gamma globulin contain these naturally occurring antibodies to the gene therapy vector. And what they could demonstrate was that to the presence of these antibodies, there were no or very little transfection of the gene therapy vectors. But if the mice were pretreated with ideS or imlifidase, that was a very efficient liver gene transfer of the vector. From that, they moved on to nonhuman primates. Nonhuman primates have naturally occurring antibodies to AAV, similar to the humans. And again, they tested imlifidase as a treatment ahead of the gene therapy. And they could demonstrate that imlifidase enhanced the liver transduction of the gene therapy vector, and they could also see that it resulted in expression of Factor VIII, which was the gene that they transferred in this model. So very positive data. And then to the right, you can see that they moved on to testing the effect of imlifidase on antibodies. They affect both the activity of imlifidase to reduce the level of anti-AAV antibodies, and they tested it in healthy donors. They also showed that they could reduce the levels of -- and activity of the antibodies in patients with genetic disease, in this case, advanced Crigler-Najjar syndrome. So they concluded that imlifidase provide a potential solution to overcome the problem with preexisting antibodies to AAV-based gene therapy. And with this, I'd like to hand over to Donato to take you through the structure and financials of the new collaboration. Donato, please.

Thank you, Christian. Please turn to Slide 7. As highlighted by Søren earlier, this is the first partnership in gene therapy for Hansa Biopharma and serves as a landmark milestone for the company as we expand our enzyme technology beyond transplantation in autoimmune diseases. This is really a unique opportunity for both companies in combined efforts and use Hansa's antibody cleaving enzyme technology to potentially enable access to gene therapy for a much broader range of patients. Concretely, we will work with Sarepta in the area of Duchenne and limb-girdle muscular dystrophy. Diseases to unlock significant additional potential in both indications where there is a very high unmet medical need. It's estimated that 15% to 20% of patients in each of these indications have preexisting antibodies to AAV-based gene therapy, which prevents patients from being treated. Under the agreement with Sarepta, Hansa grants them an exclusive license to develop and promote imlifidase as a potential pretreatment prior to the administration of gene therapy in Duchenne and limb-girdle for patients with neutralizing antibodies to AAV. Sarepta will be responsible for conducting and financing all preclinical and clinical studies to develop imlifidase as well as any potential subsequent regulatory approval. Hansa will support the development program with know-how and existing data and regulatory assets as well as by supplying imlifidase for development purposes free of charge. Under the terms of the license, Hansa will receive USD 10 million upfront and will be eligible for up to USD 397.5 million in milestone payments upon achievement of certain predefined development, regulatory and sales milestones, with sales milestones accounting for the majority of such potential payments. In addition, Hansa will book all sales of imlifidase and earn high single digit to mid-teens royalties on Sarepta's incremental gene therapy sales and treating NAb-positive patients enabled through pretreatment with imlifidase. With that, I hand back to Christian to provide some insights on Duchenne and limb-girdle. Christian, please.

Thank you, Donato. Please turn to Slide 8. Yes, Sarepta obtained a global and exclusive license to imlifidase in Duchenne and limb-girdle. And both the Duchenne and limb-girdle are rare genetic diseases with a very high unmet medical need. Duchenne is caused by mutation in the DMD gene. It's a gene encoding the protein dystrophin. It is an irreversible progressive disease that causes the muscles in the body to become weak and damaged over time. It's eventually fatal, and there is no cure today. Duchenne affects 1 in 3,500 to 5,000 males born worldwide and that's equivalent to approximately 400 to 500 new cases every year in the U.S. Duchenne causes the muscles in the body to become weak and most patients are wheelchair dependent already by the age of 12. Eventually, the heart and breathing muscles can be affected and that can potentially cause fatal complications. Limb-girdle muscular dystrophy, or LGMD, that is also a genetic and -- disease and it's clinically heterogeneous. It's a group of rare muscular dystrophy. It's characterized by progressive muscle wasting. It often predominantly affects the hips and shoulder muscles. Eventually it progresses to the arms and legs. It has an autosomal pattern of inheritance, and there is currently no cure or treatment to the disease. Limb-girdle can be caused by single gene defect. There are several subtypes -- up to 30 different subtypes of the disease. It affects specific proteins within the muscle cells, including proteins responsible for keeping the muscle membranes intact. The global prevalence of limb-girdle is approximately 1.63 in 100,000 individuals. And taken together, it's estimated that 15% to 20% of the patients that suffer from Duchenne as well as limb-girdle may have these preexisting antibodies to the gene therapy vector. And as I said before, this prevents them from being treated with gene therapy, prevents them from -- even from participating in the clinical studies. And this is the group of patients that we are targeting with this collaboration. And with this, I hand back to Søren.

Thank you, Christian. This now concludes our presentation, and we're now ready to take questions from the audience. Operator, please begin.

[Operator Instructions] And the first question we have is from the line of [ Ms. Angelica ]. We will take the next question, it's from the line of [ Ingrid ].

First of all, congratulations on achieving this other milestone for imlifidase. And I have 2 questions, if I may. Appreciating you might not be able to -- could you go full disclosure, but any input will be appreciated. So first of all, can you speak a bit about what is Sarepta's development plan for imlifidase? Would they start it for clinical trials and how do they plan to move that into clinical trials? And do they give any updates on how the time lines will work for that?

So thanks, [ Ingrid ], for that question. No, we're not going to go into details around Sarepta's plans here. But clearly, what is needed first is some preclinical studies to look at the safety and efficacy of imlifidase as pretreatment to the specific Sarepta therapy. And then hopefully, this will move into the clinic. We can't be specific around the time line, but hopefully, we can move into the clinic at some point towards the latter half of next year, I think.

All right. And my next question is, can you give us an idea on how the milestones has been structured? Is that more loaded towards preclinical studies, clinical or towards registration and sales?

Well, I'd like Donato speak to that. But as usual, again, it's skewed towards sales milestones, right? But there are certainly also very significant development and regulatory milestones involved. I don't know, Donato, if you want to chime in here, but that's your overall setup.

Yes, this is Donato speaking. I'm confirming what Søren just said. I mean the major part of the milestones is certainly related to sales. So achieving certain sales milestones. There is a smaller portion is related to development and a bigger portion then also related -- is related to regulatory -- achieving regulatory milestones. So I think we can -- we could say that the further the program gets derisked, the greater the level of our participation is going to be.

Thanks, Donato.

And the next question is from the line of Joseph from Rx Securities.

Congrats on a good deal. Just further on those milestones, could you possibly confirm what you expect the first one to be? What event that would be linked to? And then is there any kind of clause for Sarepta having first right refusal in indications outside DMD and limb-girdle?

Thanks, Joseph. No, we're not going to go into the details around the structure of the milestones. So I can't provide more granularity there. As far as a clause is concerned, I don't know, Donato, if you want to comment on that?

Well, obviously, Sarepta is the leading in muscular dystrophy and there's certainly an ability to speak again if what we are intending to do here in DMD and limb-girdle turns out to be positive.

Absolutely. So I mean this is the initial focus. And then obviously, there is scope for enlargement of the deal overall.

Sure. Okay. Just to clarify, there would be nothing to stop you also doing deals with other players for other indications?

Absolutely not now. So this is a specific deal around these 2 indications. And as you know, there is a very broad range of ongoing programs in the gene therapy space. And for many of these programs, the issue with neutralizing antibodies is a real one. It's a real challenge. And so clearly, we have a lot of interest currently. We have a number of ongoing discussions. We're very happy that we've been able to make this deal with a leading player in this space, neuromuscular diseases, and also a leading player overall in the gene therapy space. We believe Sarepta is a very good partner for us.

And the next question we have is from the line of [ Ms. Angelica ].