Herantis Pharma Oyj (HRTIS) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Herantis Pharma's webcast covering our results and key developments for the first half of 2026. Thank you for joining us today. My name is Antti Vuolanto, I'm the CEO of Herantis, joined today by CFO, Tone Kvale; and CMO, Juha Savola. During the presentation, we will provide an update on our progress during the first half of the year, including the latest developments with HER-096 and our plans going forward. We will also have a short discussion with our new Chief Medical Officer, Juha Savola, who recently joined Herantis as we prepare for the next stage of HER-096 clinical development. Following the presentation, we will have a Q&A session. You can submit questions at any time through the webcast dashboard. A recording of today's webcast will also be made available after the live broadcast. Before we get started, please take a moment to note the customary disclaimer shown on the screen. And with that, let's begin. So Herantis Pharma, we are a clinical stage public company developing disease-modifying therapies for Parkinson's disease. And we are listed on the first -- Nasdaq First North Growth Market here in Finland. Our lead asset, HER-096 is now ready to move forward to Phase II efficacy trial based on the very encouraging Phase I data set. So we have evaluated HER-096 in Parkinson's patients and in healthy volunteers. We have demonstrated favorable safety and tolerability profile. We have demonstrated efficient brain penetration. And we also have a strong biomarker data set that suggests a biological response in Parkinson's patients and the response being consistent with the proposed mechanism of action. In addition to that, we are in a very special situation as we also have earlier biological validation with the CDNF, Cerebral Dopamine Neurotrophic Factor, a neurotophic factor biology in previous clinical and translational studies. So CDNF is a naturally occurring protein that protects and restores the function of dopaminergic neurons. And now with HER-096, we can bring the same activity to the brain using very convenient subcutaneous administration. So we believe that we are in a very strong position when we now go towards the Phase II efficacy trials. If I shortly summarize the different aspects, providing a very strong foundation for the Phase II development. First of all, we have significant unmet clinical need in Parkinson's disease. Currently, the patients can have symptomatic treatment addressing motor symptoms at the early stage of the disease or right after the diagnosis. However, no disease-modifying drugs affecting the disease progression exists as of today. So there is large and growing market with high unmet clinical need. I will actually discuss that a bit further details shortly. The approach that we have with HER-096, the mechanism of action derived from CDNF is very broad mechanism addressing actually the very core disease biology. And this really puts us in a very specific proposal considering the other potentially disease-modifying therapies in development. I will also discuss a little bit more about the competition or the situation in the disease-modifying therapy space in Parkinson's disease. As already mentioned, the Phase I data and the preceding preclinical data with HER-096 is very encouraging and very strong compared to the peers considering the data set that leads to Phase II. And we do have a very strong rationale for Phase II, the specific design that we have being created and are still finalizing the clinical, the biomarker, the translational evidence provides that strong rationale that we will then test in Phase II to show a patient benefit, the efficacy in Phase II. I already mentioned about the unmet clinical need. So the current therapies are symptomatic therapies that only treat the motor symptoms, not the disease itself. And there are very severe non-motor symptoms that cannot be treated today. Even though at the early stage of the disease, many patients can have efficient symptomatic benefit from the current treatments. There are also a number of patients who either don't get the symptomatic -- don't get the benefit or they may have significant side effects. And what is especially important is to know that the effectiveness of the current treatments decline over time when the underlying disease progresses. So all the patients who are diagnosed with the Parkinson's disease, they know that there will be the day when the current treatments are not efficiently enough supporting their quality of life, and it will be compromised at some point of time. And we want to make a change here. And this is, of course, associated with huge, huge potential considering the market size. So currently, there are 10 million or maybe 12 million patients suffering from Parkinson's disease globally. It is expected to over double until the year 2050 when approximately 25 million patients might be suffering from Parkinson's disease. And today, the total economic impact or burden on Parkinson's globally today exceeds USD 250 billion. So we are talking about huge unmet clinical need, huge market. The therapeutic market currently is approximately USD 6 billion or USD 7 billion a year with these symptomatic treatments. We estimate that -- and there are many estimates that say that it will at least double when the first disease-modifying treatments will enter the market. And of course, our ambition is to be there. And there is very strong pharma interest in disease-modifying therapies in Parkinson's disease. For example, Roche, Eli Lilly, AbbVie, MSD, all of these large players have publicly said that they are really interested in this space. So the opportunity is huge. And a short update about the current situation about the disease-modifying therapies, where HER-096 has a very strong position as based on the very broad mechanism addressing the core biology and the potential to protect and even restore the neuronal function. So despite of the huge unmet clinical need, the huge market, the treatment pipeline remains rather limited. And many -- or most of the competing programs, they focus on relatively narrow mechanisms, including immunotherapies against alpha-synuclein protein aggregates, kinase inhibition or lysosomal or GBA pathways. And also, there are cell replacement therapies. Looking at Phase III, there is one compound from Roche, which is alpha-synuclein immunotherapy going into Phase III. It hasn't yet started, but it will be initiated rather soon. And in Phase II, actually, there have been some news during the summertime. So there have been these genetic lysosomal targets, both from Biogen/Denali and then a Portuguese company called BIAL, which both have reported negative outcomes in the summertime and both of these companies have announced that they will discontinue the treatment -- discontinue the development. Cell therapies has been discussed also in Finland in the newspapers and that has -- that might be a promising technology. However, there are many challenges in the practicalities related to cell therapies. Cell therapies means that you have -- you grow neurons outside of the human body, then you implant them into the anatomical place with a rather complicated surgery and then with the hope that the new neurons can be active at the site. And there are some promising results. However, it is most likely not very suitable to treat millions of Parkinson's patients or 250,000 new diagnosed cases in the U.S. annually. So it can be a limited niche product, but it definitely cannot saturate the market. So based on this, when HER-096 will continue the Phase II development, we are in a very good and very strong position among disease modification in Parkinson's disease. So we are planning for the Phase II efficacy trial in early-stage Parkinson's disease patients. This Phase II efficacy proof-of-concept study aims to show improvement in motor symptoms using continuous objective monitoring of motor symptoms with sensitive digital devices. And with that, we have partnered with Indivi, who, for example, provided the same platform for Biogen's LUMA trial with approximately 600 participants. We also will have clinical symptom assessments as a standard practice and also different brain imaging modalities as a measure of the disease modification. And of course, we will exploit the great biomarker data that we have got from Phase Ib, and we will have selected fluid biomarkers to complement the data package. The Phase II trial itself will be randomized, placebo-controlled, double-blinded trial with 2 different parts. The first part will be 9 months placebo-controlled part and then the next 6 months will be open label. So all the participants will get HER-096 treatment. Approximately 100 early-stage Parkinson's disease patients, and they will get 2 subcutaneous 300-milligram injections per week or placebo in the first part of the trial. And the preparations for this European study are underway, and we already have very much advanced discussions with a number of clinical sites across different countries, Nordics and Middle Europe and Southern Europe to have sufficient number of sites to recruit the patients in the -- within hopefully, 12 months. So we expect to submit the clinical trial application by the end of this year, have the first patient in the protocol during the first half of next year and the interim efficacy data readout early 2029, followed shortly after by the full data set of Phase II. As announced earlier in the spring, we also had a discussion with FDA about our plans and their feedback supports the planned Phase II development strategy. They consider the trial design appropriate for Phase II. They didn't raise any concerns about the data package that we discussed with them. So basically, the feedback supports submitting an IND. So potentially, we could also, in a way, have regulatory approval from FDA to conduct the Phase II trial. So let's go to the business highlights of the first half of 2026. In January, we reported positive biomarker data that showed a very clear biological response to HER-096 treatment in people living with Parkinson's disease. And the biological response was very much aligned with the expectations with the proposed mechanism of action. So improvements in proteostasis and mitochondrial function capacity. In February, we completed a directed share issue. We raised EUR 4.2 million in that transaction. Further, in February, we also announced that a consortium led by Herantis was selected to receive an EUR 8 million grant to support the Phase II trial of HER-096. And the acronym of that EU project is Herman. So it covers part of the planned Phase II trial that we are going to initiate later. In March, our Chief Scientific Officer, Henry Huttunen, provided or delivered an oral presentation at the AD/PD 2026 Congress presenting the Phase Ib data. That was also a very important scientific milestone for the company. In May, we announced a collaboration with Indivi's digital biomarker platform for the Phase II trial. And there, of course, the aim is to detect early treatment-related changes in the Phase II trial. In May, further on, we received the positive feedback from FDA that I already discussed. In May, Further, we announced that we appointed the clinical CRO to support our Phase II preparations and eventually the conduct of the trial. And then in June, we announced the appointment of Dr. Juha Savola as our Chief Medical Officer, and he brings more than 25 years of global experience in drug development. Let's discuss this topic later when I have a chat with Juha. But let's dive now into the financing figures. So CFO, Tone Kvale, please take the lead here.

Thank you for the introduction. The cost base, as you can see, remained flat compared to the same period last year. During the first half, we have spent our resources on the following core projects. We are preparing now for the Phase II clinical trial, and we are continuing development and validation of the biomarkers. In addition, as Antti mentioned, we raised funds in February. So there was cost set aside for that. And of course, we are focusing a lot on investor relations and partnering activities. So that's also part of the resource spend. Next slide. So as you have heard today, we were selected for an EUR 8 million Horizon Europe grant, and that's really positive. That's a kind of non-dilutive funding, important for us. Our cash position by the end of June ended at EUR 3.5 million. The balance sheet as such, also consisted of long-term debt that increased compared to the same period last year due to more funding from Michael J. Fox and Parkinson's UK. As you remember, they funded the full Phase Ib trial. Equity stood at minus 0.7 by the end of June, mentioned successful fundraising. And then, of course, in addition, just to say that, we need to have more capital to launch the Phase II clinical trial, and we are actively exploring different options, for instance, development partnership, equity financing and also more nondilutive financial.

Thank you, Tone. And next, we will have a short discussion with Juha, our Chief Medical Officer. So Juha brings extensive experience from the pharmaceutical industry with a strong track record in clinical drug development and special expertise in neurology. And he joins, of course, Herantis now at a very important moment as we prepare for -- to advance HER-096 into Phase II development. So Juha, welcome to Herantis. It's, of course, great to have you with us and here. Before we actually dive into Herantis and HER-096, could you briefly tell our audience about your background and maybe highlight the experience that you believe have best prepared you for the role of Chief Medical Officer at Herantis.

Sure. Thanks, Antti, and thanks, everybody. Good to be here, exciting moment, exciting moment for Herantis and really proud to be part of making things moving forward. I have worked, as you said, quite many years in the field. Many of those have been responsible and leading clinical development in neurology and some other therapeutic areas, but Parkinson's disease has been the field where I have done actually most of the clinical research. I actually joined Herantis from retirement. But before stepping out from pharmaceutical drug development, I worked in my last role, 5 years in Philadelphia U.S.A. in Spark Therapeutics, which is gene therapy company, and we had developed the very first gene therapy for treatment of genetic blindness. In that role, we started a therapy for treatment of another rare disease with neurological consequences, and that's Huntington's disease. We were thinking about and planning forward, moving with Parkinson's disease compound. So I would say that these years in business have kept me very excited about Parkinson's disease and very desperate in finding better solutions for patients. All of these years have led me to fine-tune what might be most optimal way of designing a study to address that unmet need. In my roles, working especially with the rare diseases, I learned to appreciate the value of single subject in the study. And that I think is important thinking in Herantis. We can't recruit many patients and just believe in masses of data providing the future for the program development. We need to be smart. We need to make every patient count in the study, and that will be the best feedback we can give to the patients and scientific community. So yes, there's -- I think my background in the field of neurological diseases, different modalities and really opportunity to provide something meaningful in patients is making my life very exciting.

Very good. With that, quite impressive background. What in HER-096 and Herantis has convinced you to join. You said that you had retired, but then you wanted to come back to operational role. So what is that compelling thing that you see in HER-096 maybe also compared to other approaches that are currently being evaluated in Parkinson's disease.

Well, there are 2 things, if not 3 even. First of all, the very concept of HER-096, which is attractive for me is that it is not -- as you pointed out, it's not a single mechanism of action. It is targeted mechanism of action, but it is playing across the pathology of Parkinson's disease, which is important. And I think this is important scientifically in comparison to many very focused, laser-focused biology. So that biological non-specificity is important for a disease like Parkinson's disease therapy. What was exceptional when I listened and watched your data readout when you had your Phase I data out, I was impressed that in Phase I, you actually had a signal that the drug is -- this experimental drug is actually biologically active. And everything I saw at that moment and later on as I have been access to the books is building on that story that we didn't find any surprises there. We actually got a signal that the hypothesis built on preclinical animal studies appear to be valid for humans. And that's a jump start. And that made me excited. And of course, this motivation what Herantis has is exceptional. And shortly after speaking with you and other colleagues in Herantis, I felt there is a spirit spot on in this company.

Very good. And that leads to the next item that I had in mind. So you have now spent 2 first months at Herantis and the team. So what has mostly impressed you about Herantis as a company or our great team, at least I would say the great team, but maybe you will...

Well, I can't deny that. As I say, Herantis is showing it's leading every moment. I see it, I feel it when I am with Herantis. Seeing the people, everybody is engaged. Everybody wants to make impact on the lives of Parkinson's patients and their families. Everybody knows what we are doing and why we are doing it and the level of engagement and commitment is very tangible. So it is -- and there's a good humor in the company. And it's a perfect place to work.

Well, that sounds very good, of course, in the ears of the CEO. Well, you have seen the full body of evidence that we have built now within the first 2 months of your engagement with Herantis. What is, in a way, the most encouraging, you said that the broad mechanism of action, but if you consider the data set that we have, what is like convincing you that, yes, we are going into the right direction, considering the long track of evidence that we have built from the CDNF preclinical to HER-096 Phase I data.

Well, let's go to the very basic mechanism of action. The evidence Herantis has built around CDNF first and then later on HER-096 is very compelling in the field of any modalities I am aware of competing products, there is an opportunity for neuro restorative, meaning this drug might make cells behave better and they might catch up and there might be finally something which is doing more than simply providing less reduction in clinical progress. And that would be fantastic for these patients. And I can see that kind of glimmer of hope coming from these cell culture studies in our animal studies. So that was the first thing which was my attraction when I was going through the documentation we had -- I had access to. The preclinical package has been well thought out, well planned, well executed, impressive. And then on top of that, as I mentioned, our human data is building up on that story, and it makes me very hopeful that we are able to create something which is standing out in the crowd. And this -- what we are doing really will make an impact for patients.

Right. And now as we prepare for Phase II, what do you see as the most important elements of the study design so that we can maximize the chances of success, which is, of course, very critical. The Phase II is the critical step towards commercialization.

It is a critical step for any company, the principle is still early. We need to have a study which is telling us if we need to stop the concept and not invest anything of that because it would be likely wasted money or we need to have evidence and signal that there is continued reason in believing in the compound. And this is the very solid stepping stone for us to move forward. And the design has to be creative. The design has to be smart. And smart in a way that we are able to, as I said, use every subject in the study to build up understanding if this drug is doing what we are expecting it to do, and we hope it would be doing. So finding right elements for measuring the biological therapeutic benefit is important. For that, I think your choice of building up initial efficacy demonstration on smartphone is smart, obviously because it's so much more sensitive to detecting the subtle movement disorder symptom severity. It will be also more sensitive than traditional measures detecting if there's a potential treatment benefit. So I believe that the compound is safe. That's based on Phase I data is probably not a question anymore. And the question is now what handle we can get on efficacy. Parkinson's disease is not easy from that perspective. We are so much dependent on the Parkinson's subject behavior and what we can measure and how we can measure and quantify that disturbance. And I think that's a tricky part in early patient populations.

Yes. And a bit broader view looking ahead. So what kind of -- how you would define a success for HER-096 considering the Parkinson's patients and maybe also Herantis so considering Phase II and beyond. So what you could foresee here?

What I can foresee is interesting. There is a potential that we are able to demonstrate potentially therapeutic benefit in this Phase II study. We do everything we can to build a protocol where we are maximizing probability of picking up the signal of therapeutic potential. Without that, there is no path forward with this compound. And it is even our call and our ethical duty to the patient community out there to be honest with the data and see if there is a reason or not to continue developing. If we are picking up the signal, this study will be a sufficient -- another stepping stone in developing this drug forward and should be ready for confirmatory Phase III studies where we are truly demonstrating that it is benefiting the patients and their observations, how the disease is impacting their daily activities can be documented and can be demonstrated. And then with those data that the product can be taken to global markets. Obviously, that confirmatory Phase III program is beyond our reach. It does require a global player. So for Herantis, these data are critical for licensing partner identification. For the patient community, it's important additional flicker of hope that there's something will come up to benefit them. You mentioned that there are lots of activities going on in Parkinson's pipeline. That is good for patients. That is so important because there have been so many disappointing years. Nothing really important has been introduced over a couple of decades in Parkinson's field, and that's sad for anybody who is living with the disease.

Yes. All right. With these words, let's continue with the Q&A session.

Yes. And we have received many questions, but there are still room for more. So what is the rationale for pursuing an FDA submission alongside the European CTA during Phase II?

That's, of course, a very good question. We are planning a European study. However, having FDA's blessing, as you will, would act as an external validation for the program. Juha, would you have any other view from the big pharma standpoint as you come from there? .

For them, it is important that FDA has both in these pharma partners who we would be approaching, they need U.S. clinical research conducted as well. And for that, it's a 6-month prep work done already by us so that when they got our data, we can have -- well, I'm saying we -- probably we have a joint meeting with the FDA and then Phase III plans can be nailed down and the program can move forward. So it's a huge shortening of the white space in development. So it will be paid back to the licensing partner. And of course, market time will be much earlier.

Very good.

Next, what are the key milestones investors should expect over the next 12 months? .

Yes. Of course, as we already mentioned during the webcast, we are now preparing for the Phase II. And there, of course, important milestones are submit the clinical trial application by the end of the year, start the actual clinical trial patient treatments first half of next year. And of course, before that, we need to secure the resourcing of the Phase II with, as you mentioned already, Tone, we are in discussions with pharma related to partnering. We are in discussions with investors and also nondilutive financing. And of course, we are very confident that the time lines that we have communicated, they will hold, and we have a very good kick start for the Phase II program.

Yes. Good. In previous communication, you have referred to the upcoming Phase IIa study and it's now being called a Phase II. What has changed? And do you need more money for this?

Yes. This is a very good question. Again, it's a tiny, tiny letter, an A, but it might have a certain meaning. And of course, claiming Phase IIa or Phase II is not a regulatory label. It's more like the company communication label. And this is actually one thing that Juha actually brought with him his big pharma view on how we should define items. So maybe, Juha, you would could provide the rationale why you believe that Phase II is the right wording and what does it mean for the Phase III?

Yes. To me, it was clear and I saw it after seeing our Phase Ib data, our Phase I data, providing evidence of proof of mechanism. And therefore, I don't need to redo that in many patients. I want to design a study and want us to do and commit to conducting a study, which is ready to build up understanding whether we can or we should not continue in the confirmatory study. And I -- with the number of patients we are considering, we should be able to support progressing into pivotal program.

And I can also confirm that there is no extra resources, money required. So it's maybe a branding and labeling item, not as such a design item for the trial.