Heidelberg Pharma AG (HPHA) Earnings Call Transcript & Summary

Our next presentation is from Heidelberg Pharma.

Thank you for attending the European Biotech Investor Day hosted by Solebury Trout, Goodwin, Deutsche Bank and NASDAQ. My name is Thomas Hoffmann, a Managing Director here at Solebury Trout. Before I introduce the next speaker, I would like to remind you to please feel free to submit your questions throughout the presentation via the web platform. If the company does not have time to answer them during the presentation, they will follow up individually. With that, it is my pleasure to introduce the next speaker, Jan Schmidt-Brand, CEO of Heidelberg Pharma. Jan, please go ahead.

Yes. Thanks, Thomas. Actually, we switched gears. So my name is Andreas Pahl. I'm CSO of Heidelberg Pharma, and it's my pleasure to introduce you today into our company and to our technology. Since we are a listed company at the Frankfurt Stock Exchange, please have a look at the safe harbor statement. And as you will see on that slide, we are a company listed in the Frankfurt Stock Exchange. We are closely located to Heidelberg and small town, Ladenburg. We are currently around 77 employees. And our mission is to bring a new mode of action to cancer therapy. And that new mode of action is the inhibition of RNA polymerase II, which I will introduce you in the upcoming slides. And the 3 highlights of the introduction of this new mode of action to cancer therapy is to overcome the resistance mechanism, kill dormant tumor cells and to be highly efficacious on aggressive TP53/17p deleted tumors, and the proprietary name of our technology, the so-called ATAC technology, which stands for Antibody Targeted Amanitin Conjugates. A brief introduction into the people. So the CEO/CFO is Jan Schmidt-Brand. He is with Heidelberg Pharma since 2001. Previous experience is BASF, a chemical company in Germany, also Managing Director of an Austrian subsidiary company. And he's obtained his LLD from the University of Mannheim. My name is Andreas Pahl. I'm CSO since 2012. I started an academic career in Germany and then switched in 2008 to industry. Joined Nycomed and Takeda for 5 years to learn everything about early drug development. And since 2012, I'm the CSO of Heidelberg Pharma. On this slide, you see the strategic cornerstones of our company. So we developed a platform. We call them the ATAC technology platform on the upper right. And this platform is open to partnering for pharma or biotech companies. We already concluded 2 partner in this, the one of which Takeda Oncology, the other one with Magenta Therapeutics. I will give you a little bit insight in the next slide. We have some legacy assets, which you see in the lower right, which are not actively pursued by us. And then we are also building up all of our own platform of the ATAC platform and to build up an old pipeline. The lead program is HDP-101, which will be introduced to you in the last part of the presentation. But we will also -- we aim for becoming a clinical-stage company and not a single asset company, so we are building up our pipeline with follow-up programs to really become a sustainable clinical stage pipeline. So these are about the typical partnering key ideas of the platform. So we are preparing in a research phase the Amanitin drug conjugates using the antibodies from the partners of exclusive target licensing options. So we sell our platform on a target-by-target basis. The health options depending on the agreement for several targets, and then they can exercise the options and to enter the pre-clinical development on their own expenses. And the financials are the typical upfront payments, milestone payments, royalties and so on. We see the accumulated bio bucks, we have listed in this slide. Very brief glimpse on the current pipeline. I will introduce you throughout the presentation. The lead program, HDP-101, is targeting BCMA, and the indication is multiple myeloma. We are in the late-stage preclinical phase. So we aim to submit IND the second half of this year and to have the IND approved before the end of the year. And then we initiated the patient trials with the HDP-101. We have follow-up programs. They are not fully announced. The one program is PSMA on prostate cancer and further programs on B-cell targets and solid tumors. Below that, you see the partnering programs. So Magenta has up to 4 targets in their agreement. They already exercised the options for 2 targets, for CD45 and CD117. I will explain later to you what Magenta is doing with these targets. Takeda has up to 3 targets in this collaboration agreement. And we have a joint venture with the French company called Emergence, they have one target in their portfolio. So now introducing you into our technology and in our platform. And if you look in today's landscape of cancer therapeutics and payloads for antibody drug conjugates, and here is just the textbook slide. Almost all fundamental processes are exploited for [ Gentech Therapeutics ]. But there's one missing piece. So the inhibition of mRNA synthesis. So the eukaryotic transcription has never been exploited as a mode of action. The core idea of our company is to introduce an inhibitor for this specific step of eukaryotic transcription and make this available to cancer therapy. There's probably a reason why nobody else is exploiting this mode of action. And one of the reasons is that there's only one compound known in the world, which is the specific inhibitor of eukaryotic transcription and the specific inhibitor of RNA polymerase II, and that compound is called Amanitin. And this is a compound which is found in the death cap mushroom. And this is a highly deadly mushroom. And the reason for being deadly is that if you ingest the mushroom, it causes liver toxicity. And this is probably the second reason that, due to the liver toxicity, in its pure form, cannot be used for therapeutic of cancer. And we developed the idea to harness the ATAC technology now to detoxify, so to say, the pure compound and to turn it into a target therapy. So we use the traditional ATAC technology, which we'll introduce in the next slide, where you can exploit antibodies for different tumor targets, different indications. And up to now, we did not observe any failures, so every tumor is amenable for Amanitin therapy. And we also see potential clinical benefits for using that mode of action and that compound, and this is around the mission we -- I presented to you in the beginning. So we see strong efficacy in our models. We see the ability to overcome the systems, which is a very frequent problem in today's cancer therapy. And also, we are able to cure dormant tumor cells, which are the other problem in current cancer therapy because these dormant tumor cells cause metastases and tumor relapse and the limiting really the survival of the cancer patient. So a very brief introduction into the ATAC technology. There are already approved compounds like Kadcyla for breast cancer from Roche. And more and more ATACs are approved. Now we have now 8 to 10 approved products based on the ATAC technology. So that is the clinical validated technology. And to briefly introduce you for them who are not familiar into this technology. So you see here now in the red hexagon, the Amanitin is the drug which is by a chemical linker conjugated to the antibody. And then the antibody is really targeting the Amanitin to the tumor cells. So the specificity is coming from the tumor antigen and the antibody directed against. Then you see in the steps 1, 2, 3 that the antibody is binding to the antigen on the surface of the tumor cell. It's getting endocytosed. And then at step 4, it lies within the endolysosome of the tumor cell, and the latest designed in a way that release the Amanitin inside the tumor cell in step 5. And then, step 6, it blocks the RNA polymerase at the step where the RNA is produced indeed during the transcription. So it's -- we developed this platform. Now we have a portfolio of linker Amanitin derivative. And the next slide gives you just one example about the ability to overcome resistance. So this is a famous cellular in animal model, the JIMT-1, which has been -- the cells has been isolated from a breast cancer patient who became resistant to trastuzumab and Kadcyla, and this is slightly back translated into mice. So you see here the blue line, the treatment of Kadcyla compared to the vehicle treatment that the tumors growing in the mice without any therapeutic effect of the Kadcyla and the clinical effect of [ dose you see ] in that animal model. And then we just switched the payload of this ATAC from the DM1 to Amanitin, keeping everything the same, trastuzumab, the drug to antibody ratio, the linker. As you see the striking difference if you now administer by the same dose, here in red, the Amanitin-based ADC, you see after a single administration of complete remission of tumor and the long remission. So we can easily overcome the resistance which has been developed to the Kadcyla. And we have much more data, but for a variety of models in comparison to other chemotherapeutics, we are able to overcome the resistance. So now to the next mission I'm promising to you that the ATAC, our Amanitin Targeted Antibody Conjugates are also able to kill dormant tumor cells. And this is a study which was performed with our lead program, HDP-101, on real nondividing tumor cells. So as mentioned in the beginning, we are addressing multiple myeloma patients. And from the bone marrow biopsies obtained from the tumor patients from the multiple myeloma patients, you re-treat the tumor cells which are plasma cells, and these plasma tumor cells are really nondividing tumor cells. And this can be now demonstrated here in these ex vivo experiments, so we -- without [ passaging ], put these tumor cells into in vitro system and incubated them with ADCs. On the left panel, you now see BCMA-based ADC using the MMAF payload, which are the competitor payloads, which is the GSK is using. And we compare the efficacy, here on green, these are cells directly isolated from the patients. And in black, these are dividing cell lines, which are typically used in the sericulture lab and the research lab. And what you observe now here in the cytotox assays, that only on the first dividing cells, the ADC with the tumor in the payload and are able to be killed via the ADC. In contrast, we see hardly any effect on the patient side, again, these are nondividing tumor cells. In contrast, if you now look HDP-101, which is using our ATAC platform from using Amanitin as a payload, you see the striking difference. Our technology is equally versed in killing the fast dividing cells as well as the nondividing cells. The reason for this is that even nondividing cells have a housekeeping metabolism. So a minor transcription is ongoing. And if you inhibit the transcription itself, it sensitizes this and start an apoptosis program, and even these dormant tumor cells go into the apoptosis program and are dying. And we believe that with this property of our ATACs, we can make a difference in cancer therapy. So in this chart, you see in the upper panel the current standard of care in tumor therapy. So we are dividing the tumor. Part of this dormant tumor cells from keeping forming cancer stem cells are surviving the current therapy. And sooner or later, these surviving tumor cells leads to weak growth, to tumor relapses. And this limits to the survival of the patients treated with the standard of care. And since we are different, we believe we can enter the lower path, that we are not only dividing the tumor, but also killing the cancer stem cells so that would completely eliminate the tumor, which then subsequently should lead to a complete tumor eradication and maybe also to a cure of the tumor. The next slide introduces you in the third highlight of our platform, which is also very unique for our platform and for ADC. So we identified the biomarker for the whole platform. And this has been published 5 years ago in Nature. You see the title of the publication in the upper right. And probably from the title, you would not identify any relationship to our platform or to ADC. So let me briefly introduce you. 17p is a frequent deletion of chromosome 17, and this part of the chromosome also contains the tumor TP53. And the clinical outcome is that these tumor cells found in this division are very aggressive, rapidly dividing, resistant to standard of care and are leading to a very poor prognosis of patient containing this 17p deleted cell. And what we identified and published in this Nature article that the target, which is here called call POLR2A of the Amanitin, so that's a major subunit of the RNA polymerase, is in close proximity to the TP53 gene. And by serendipity, every cancer cell which has that 17p deletion also has the deletion of the POLR2A gene and leads to a higher sensitivity to the treatment with ATACs. So this means that the hemizygous deletion of the POLR2A is a potential biomarker to increase the therapeutic window and to identify high-risk patients. And we could demonstrate this in a variety of publications. One data set is shown in this slide. You see here on the 2 PDX model from the 1+ staging. And you see the treatment with our [ 2-phase ] Amanitin ATAC. And on the left panel, you see a wild type without the 17p deletion, also meaning that the [ copy number ] variation of the POLR2A gene is 2. You see a 0.5 mg/kg dose, only a delay in the tumor growth. And you need the mg -- the 2 mg/kg dose, shown in red, to achieve a complete remission. Now from [ care ], from the same period of PDX model, the same treatment on the right, but the only difference that these tumors now are the 17p deletion, meaning also that the [ copy number ] variation of the gene is now only 1. If you focus on the blue line, you see the striking difference that you now achieve with the highly efficacious dose from the left model, complete remission with the 0.5 mg/kg. So again, this means that this deletion, so all 17p deleted tumor cells are highly susceptible to the treatment of ATACs. And remember, this occurs only in the cancer cell. So this increase of sensitivity is only for the efficacy, the tolerability remains the same. So that this biomarker includes the therapeutic window. And especially, these patients are high-risk patients. So it's easily to use this biomarker to identify the high-risk patients, to stratify and -- for these patients and to expedite your clinical development and probably to allow accelerated approval. And that's one famous example. We have mentioned in the last bullet point, venetoclax, the BCL-2 inhibitor from AbbVie, has been approved on the single Phase II trial with only 107 patients. So that is also what we are aiming in the clinical development that early on, after the dose escalation in a dose expansion, we go for the stratification of patients. Those with the past threat and aimed on accelerated approval of our program. So just to mention, so Amanitin is a natural product. We have a lot of layers of IP around the Amanitin. So we feel that we quite have a monopoly. So the chemical synthesis has been exclusively applied by our chemists and has also been transferred now to CDMO. We already accomplished the GMP production of the Amanitin. Also, the linker attachment sites on the Amanitin, the attachment to the antibody or the [ scientific ] communication technology we are using at the biomarker. So we have several layers of IP around our technology. And we are the only company in the world which is able to produce Amanitin in the GMP quality. So after our best knowledge, we quite have a monopoly on this compound and on this mode of action currently in the world. Just to briefly mention one of our partner program. So this is Magenta Therapeutics. They're a Boston-based company because they are doing something beyond oncology. And that is the second strategic field for our technology. So they are going to replace the current regimen of conditioning in cell transplantation where you use high dose and specific chemotherapy and total body irradiation, which really limits the number of eligible patients in the indication. So they are very successful in replacing this now by our technology. And they already demonstrated preclinical efficacy that we can expand now the stem cell transplantation not only for the traditional use, but also for CAR-T cells, for gene therapy regimen and also for autoimmune diseases. And this is very successful for Magenta's full steam ahead with the 2 licenses. They also already took for the CD117 and the CD45. The first program for Magenta, the CD117, is expected to enter clinical development also in 2021. So the next few slides, to introduce you briefly into our lead program, which is called HDP-101. The indication is multiple myeloma. That's the second most prevalent hematopoietic malignancy. So it's a huge population, usually of the elderly people. And it's derived from single clones in the plasma cells, derived from B-cells, which produce abnormal antibody proteins. There are current treatment options, but patients become very rapidly resistant to the current treatment options. And the median survival currently is 30 to 60 months. It's an incurable disease. And it's a high price market. So current cost for therapy are around $0.5 million to $1 million per patient per year. The target is BCMA, which has been now become a very crowded space to briefly position our compound. So we are competing with the CAR-Ts at the bispecifics. The current belief is that the CAR-T cells, while they are highly efficient, the manufacturing costs are so high that it will hardly become available for the broad patient population in multiple myeloma. And also, you have to deal with the side effects, although the bispecifics are limited. They have a need for continuous infusion. They have a cytokine storm. So these modalities are still very limited in the day-to-day use in the myeloma patients. And if you look to the ADC-targeting BCMA, our main competitor is GSK, which submitted to FDA, which is their BCMA-MMAF ADC. So -- but they appear [ relatively ] ocular talks. So 75% of the patients have [indiscernible] one ocular talks. And if you're talking with the [indiscernible], even the remaining patients are at ocular issues. So the clinicians tell out to the ocular toxicity is dose-limiting for that GSK compound, that it will be difficult for them to get into the routine daily practice. And as shown to you in the beginning, we see quite a competitive edge of our compound if you compare this to MMAF-based ADC, with regard to tox and with regard to the ability to cure these nondividing tumor cells. And an extension to the slide I showed you in the beginning, this is again a demonstration of the capability of our lead program, HDP-101, on this nondividing primary tumor cells. You see here, from 7 different patients, all these cells are, despite being resistant to standard of care, a few patients have been found to be resistant to [ CDP28 ]. So independent of the previous lines of therapy, all these patient cells are susceptible to the HDP-101. We see the efficacy in the second column. And what is also interesting, on the first column, you can see is the abbreviation for antigen binding cell to cell. So that gives you the average number of BCMA molecules on cell surface to demonstrate to you that this is a really lower-expressed target. And my famous patient 7 which -- and has only 270 copies per cell, so I would say, is still susceptible for the BCMA. So we do not need any stratification for cell for [ expiration. ] All patients are susceptible. This is also in contrast to other payloads in the ADC space. But it's also important that we can make use of our biomarker story, so the 17p deletion leads to a very poor prognosis of multiple melanoma patient. We see here overall survival curves of patients. The upper curve is without 17p deletion. So here, 50%, overall survival of around 2 years. In the lower curve, the dramatic reduced survival with a 17p deletion of less than 5 months. So this easily identifies a high-risk cohort with an unmet medical need. And we aim to enter very early with the use of the biomarker, the fast track program, as shown here, and to demonstrate in the dose expansion cohorts the preparation activity on the tumor cells of these patients and try to obtain a breakthrough therapy designation from the FDA and an accelerated approval based, hopefully, on just Phase II trials. Just one slide, to give you an impression about follow-up programs. So that's one of the follow-up programs with PSMA. We are already quite advanced. We have preclinical data demonstrating very good efficacy. PSMA is meanwhile a clinical validated target for the use of the radio-ligand therapy and also commercially validated by the peers like Novartis acquiring Endocyte. So there, we see a lot of room. There's hardly any competition in that space because treatments are not really working. Bispecifics need to be shown. And we aim for the metastatic castration resistant prostate cancer, which is a huge patient population. They have all existing lines of therapy. There's an unmet medical need. And the prevalence for the 17p in these patients is 60%. So again, we can make easily use of our biomarker to stratify for these patients and to run into this population to demonstrate the efficacy of our compound. So all together, on Slide 29, you see our developing pipeline. The next program will be also communicated soon, another B cell target. So that we want to get a mature clinical stage pipeline and also to exploit by our own this technology for clinical programs and products. So the next slide, but I'm passing the end of my time, to give you an overview of the financials. We are currently financed until the mid of next year. So we are -- have the major owner, the family office here in Germany, but we are really interested to broaden our investor base and reaching out to the U.S. So that's why we are looking for additional investors into our company. Next slide gives you an overview of the achievements of the last [ 2 12 ] months. And in the outlook, we are completing now the package. So we -- as mentioned, we are aiming -- we are now submitting a clinical request for a pre-IND meeting. Plan to submit IND to FDA in Q3, Q4 this year, and also for the clinical trial application in Q4, and site activation and first patient in should start in Q1 2021. So by this, I would like to conclude and thank you for your attention, and conclude with the investment summary that we believe that we have a disruptive first-in-human mode of action which provides high efficacy and has the potential for unique clinical advantages, including treatment of dormant tumor cells. And this highly specific [indiscernible] is the whole platform which enables us to stratify patients and to accelerate our clinical development program. By this, I want to conclude and thank everybody for the attention. I'm happy to take questions or to follow up in separate investor calls or please feel free to contact us. I've given on the final slide our contact details.

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