Medivir AB (publ) (MVIR) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Medivir AB Q2 report 2020. [Operator Instructions] Today, I am pleased to present Uli Hacksell, CEO. Please begin your meeting.

Thank you, and good afternoon. With me today are Magnus Christensen, who is the Chief Financial Officer; and Linda Basse, our Chief Medical Officer. With that, I will start out by asking Magnus to provide a financial summary of the second quarter.

Thank you, Uli. Please see Slide 3, where you can see the financial summary. You can see the summary for quarter 2 and the half year-end of June. And you can see the turnover for quarter 2 amounts to SEK 4 million, which is very similar to last year and relates to royalty income from Xerclear. Accumulated for the first 6 months of 2020 is SEK 11.4 million, this is almost double last year and it relates to both higher royalty income from Xerclear as well as income from the partner deals that we made in quarter 1 2020. And you can see loss in the quarter is around the same level as last year. But accumulated to the half year-ended end of June, you can see that the loss is significantly lower than last year and it relates mainly to the lower personnel cost as we have 10 FTE at the moment as well as lower clinical costs as well as the high income that we had in the quarter 1. And the cash position at the end of quarter 2 amounts to SEK 95 million, and we believe that the cash is sufficient to complete the ongoing clinical studies. And to finalize, the market cap of August 19 is around SEK 340 million. Thank you, and I hand over to you, Uli.

Thank you, Magnus, and let's go to Slide #4. Medivir today is a quite different company than it was a couple of years ago. Our development now is focused almost entirely, or I should say entirely, on our proprietary nucleotide-prodrug platform, and in particular, on MIV-818, which is our clinical candidate for primary liver cancer. We also have a number of other clinical assets, remetinostat, birinapant and MIV-711, but these are not considered for internal development. Here we are searching for in-licensees or for partners to carry on the development of these assets. We are a small and efficient company today with an effective organization focused on doing successful development. Let's move to Slide #5. One very nice development is that we have succeeded to recruit my replacement, Yilmaz Mahshid as new CEO at Medivir. Yilmaz has a great background to do a successful job as CEO. He is currently CFO at another Swedish biotech company, but has been analyst and has achieved a PhD and very good, strong scientific background really makes him a perfect choice, I think, for this job. So I'm very happy about this. I will go back to be a Board member at Medivir, and I wish Yilmaz the best of success in his new position. Let's move to Slide 6. And I want to say a few words about our basic technology platform, which really consists of 2 very simple concepts. One is to have a nucleotide and a tail that can combine with a nucleotide to make it into a prodrug, and then our ability to fine tune the properties of this prodrug for certain types of cancer applications. We have, obviously, MIV-818 coming from this platform. This is a oral product that is taken as a pill, and we think it's perfect because -- for liver cancer applications because it's liver-directed. MIV-818 is a different combination of tail, region and nucleotide. This is an IV drug that is considered for various blood cancer indications, in particular for AML. We have nominated MIV-818 into, say, clinical candidate, but it's still not into formal development. We are waiting for additional resources to put it into a formal development. And we see multiple other opportunities from the nucleotide prodrug platform. MIV-838 is a conceptual prodrug that can be developed for other blood cancer drugs. So we are excited about the potential here. Currently, our focus is entirely on developing MIV-818. Let's go to Slide #7. So MIV-818 is a liver-directed nucleotide for primary liver cancer. It's a drug that is taken orally. And that means that it gets absorbed from the GI tract and then immediately transported to the liver where it's going to have its primary effect. It's then taken up by liver cancer cells. And when it has been taken up, it's then converted to the active metabolite, which is troxacitabine triphosphate. And this active metabolite is incorporated into DNA and causes DNA breaks and cell death. So it's a pretty simple but very powerful concept. Now there is -- as you can see on Slide 8, there is a major need for anti-cancer drugs that are safe and effective for the treatment of primary liver cancer, such as hepatocellular carcinoma, which is the major indication in primary liver cancer. We think that MIV-818 may have an outstanding efficacy and safety because it's directed towards the liver. We think it can be perfect as a product that can be used in combination with other treatments for primary liver cancer and potentially also as a stand-alone therapy. Now HCC itself is very dangerous cancer, it's the third leading cause of cancer-related deaths globally. In the western world, it's not so common. In fact, it's an orphan indication in the western world. And as you probably have heard, we have received orphan designation -- orphan drug designation for MIV-818 for the treatment of HCC in the U.S. and in Europe. In China and in other -- several other Asian countries, this is a huge indication, it's not an orphan indication. And therefore, we foresee different developments pass from MIV-818 in the western world one hand and in Asia, the other hand. Let's move to Slide #9. Here, we show our clinical development plan for MIV-818 in advanced HCC or hepatocellular carcinoma. We have already completed the Phase Ia study, where we showed that we had a good effect as indicated by staining of biopsies in patients with liver cancer. And we saw that the drug was well tolerated. Currently, we are in Phase Ib, where we give MIV-818 as monotherapy to additional patients with liver cancer, and we expect that study to be completed no later than in the first quarter next year. We then intend to start a Phase Ib add-on study, where we will give MIV-818 together with standard of care to a number of patients. And to prepare doing that, to prepare for a Phase II study, with the same kind of protocol where we will add MIV-818 on the top of standard of care and compare that therapy with standard of care. Although our plan, our hope, I should say, is that we will get very good data in the Phase II study and potentially have the opportunity to get accelerated approval by gene therapy pretty early and in a very effective way of developing a cancer drug. So let's move to Slide 10. Here you see why we are excited about the data in Phase Ia that essentially provided a proof-of-concept of the use of MIV-818 in liver cancer. What you see here is a number of stained slices of biopsies from the patients. On the left-hand side, you can see data from patient 2. To the left, you have tumor tissue before we dosed the MIV-818, then you see normal liver after dosing of the patient with MIV-818. And then you see what happened in the tumor tissue of the same patients. In brown, we have stained cells that are -- have DNA breaks and therefore will die. You can see in the pre-dose, in the normal liver, we don't see any staining so these cells are healthy. The tumor tissue, however, has a lot of staining, meaning that we have had MIV-818 be very effective in these cells. You see the same thing from patient 4 in the normal liver following dosing. We don't see any cell death or DNA breaks. In the tumor's tissue, we see lots of cell breaks. At the same time, we measured the amount of MIV-818 systemically and of the one of the metabolites, troxacitabine itself, we saw very low levels of those molecules in the systemic setting. So we think that, together with the safety data that we obtained from MIV-818 therapy and the staining data, really provides a strong proof-of-concept the idea of using MIV-818 to treat HCC and other primary cancers. Let's move to Slide #11. So this shows the change in liver tumor burden after the treatment of patients with MIV-818. These were very sick patients, by the way. I think that's important to mention. Patients had an average kind of life expectancy of around 3 months. The important thing here is that we saw stable disease following therapy in 5 out of the 9 patients that we treated, which I think is also an encouraging indication that we will have a liver-directed effective therapy with MIV-818. So the conclusions from the Phase Ia study, which supports all studies that we have done preclinically with MIV-818 is that we have a good safety profile, adverse events were generally mild, and we saw a few severe adverse events which were reversible. We saw low levels of MIV-818 and acceptable exposure to troxacitabine systemically of the 2 treatment cycles. We saw a selective impact in liver biopsies after MIV-818 where we did not have an effect of staining as demonstrated by staining in normal liver tissue, but a very clear effect in tumor -- in tumors in the liver. So that's exactly what we wanted to see. And finally, we had, in 5 out of the 9 patients, stable disease after MIV-818 treatment. So it's with very large excitement that we now look forward to data from the ongoing Phase Ib study. So this study, as you can see on Slide 13, aims to provide more information on the safety, in particular, but also indications of efficacy in patients with liver cancer. The study started in Q1 '20, and we estimate completion in Q1 next year. We saw initially a slight delay in the study that we reported at the last quarterly call because of the COVID-19 pandemic. But we are very excited about the fact that all sites are open and recruiting. And we think that the study will move on without any further delays. So that's very encouraging. Let me finally mention when it comes to MIV-818 that we see a number of upcoming milestones that I'm sure that you will find exciting to follow. First, we certainly have the completion of the Phase Ib monotherapy study no later than in the Q1 of 2021. And we expect to be able to start the combination study in the same quarter. Our hope is then to be able to start a Phase II combination study in the second half of 2022. That's important because that study may, in fact, be good enough to provide us with accelerated approval, in particular in the U.S. So let me talk a few words also about MIV-828. Co let's go to Slide #15. So 828 is a very different prodrug than 818. 818 is an oral prodrug, liver-directed; MIV-828 is an IV formulation of the prodrug that is focused on AML and potentially also on other related blood disorders. So this shows the -- in fact, the flexibility and dynamics of our technology platform. As I mentioned early on, we are not moving forward currently with MIV-818 for financial reasons, but we hope to be able to do that shortly. Let me finish off by saying a few words about our assets for partnering, as shown on Slide 16. So we're talking about 3 assets, and let me start to say a few words about remetinostat, which is ready for a Phase III study for cutaneous T-cell lymphoma. We know how that study should be designed. And we think that the partner can develop that quickly into an approved drug for that particular indication. We have a collaborator that have been working on 2 indications basal cell carcinoma where we heard about exciting interim data last year and where we also have started a study in HCC. We think that this shows the breadth of opportunities with remetinostat. Birinapant is a SMAC mimetic, where we currently have a head and neck cancer study ongoing in combination with radiation. And finally, MIV-711, which is a little bit different from the other drugs that I've been talking about or drug candidates, I should say. MIV-711 is an osteoarthritis drug. What we have seen here is very interesting data in terms of effect on reducing the impact of the disease on both the bone itself and on cartilage. But in order to get MIV-711 all the way to the market, one needs to conduct larger studies but we cannot currently conduct ourselves, too expensive. So here, we are looking for a partner to help us to deal with those studies. 3 exciting opportunities for partnerships. With that, I thank you for your attention and open up for questions.

[Operator Instructions] Our first question comes from the line of Joe Pantginis of H.C. Wainwright.

Two questions. First, with regard to 818, I want to focus on the regulatory component that you started to discuss. Obviously, you talked about the potential for accelerated approval following the randomized Phase II. I guess I always also wanted to explore, first, what level of regulatory discussions have you had to this point? And then also, what do you feel the Asian component could have just based on the sheer size of the market from a regulatory component?

Thank you, Joe. So we have not yet had discussions with the FDA about the full clinical program, that's something that we'll come up in the future and that we are very excited about. What we do understand though is that we're talking about different development programs in the U.S. and Europe versus Asia. In Asia, this is -- HCC is not an orphan indication and it will require a different development path because of that. We believe that ideally, sometime in the future, we should team up with an Asian partner for the commercialization, in particular in Asia, but also potentially for the late-stage development over there. We intend to move forward to the maximum extent possible ourselves with MIV-818 to really create as much shareholder value as possible.

That's helpful. And then, sorry. Yes. And then I know you can't give specifics with regard to your business development activities, but I guess I would sort of ask the question this way, especially for remetinostat. I guess how would you define or characterize the maturity of any of your potential discussions?

Thank you for that question, Joe. Unfortunately, I'm pretty boring when it comes to these answers. So I don't give any kind of indication on where we are in the discussions with potential partners because from experience, you know that you don't have a deal until you have it signed by both parties. So but what I think is important with remetinostat is that we have very good data in cutaneous T-cell lymphoma. We have indications that we will have very good data also in basal cell carcinoma. So there is a lot of opportunities to have a drug that can help patients a lot and can also provide a lot of money in terms of sales. So I think that is the very interesting asset, just like 711.

Our next question comes from the line of Niklas Elmhammer of Redeye.

I was wondering if possible if you could give some more color regarding where you are in terms of recruitment and dose escalation in the Phase Ib? And also regarding remetinostat and the investigator-initiated studies, if you can give any clues when we can expect the next update?

Yes. Thank you, Niklas. So first of all, we don't provide the interim updates on exactly where we are with the -- our clinical trials. What I can say is that we are on track. Now all our sites are up, running and we are excited about how the study is progressing. But again, we are still sticking to the quarter 1 2021 as the finishing up of that study. So that's what I can say. I can also add that this study is basically related to safety, and we already have an indication from Phase Ia that we're pretty happy about the dose of 40 mg, and I don't think that we will deviate a lot from that dose. It's certainly not 10x, certainly. So we are happy about how the study is progressing. When it comes to the second question that you asked about remetinostat and how the BCC study is progressing, we cannot speak specifically about when we will learn about data from the full study because it's an investigator-sponsored study. But what I can say is that it's not going to take too long before we hear something about it. That study has been progressing nicely as far as we know.

Our next question comes from the line of Ingrid Gafanhão of Kempen.

I was wondering, we can -- already, we can you still continue to see your expenses getting lower over time? Is this a trend that you expect to continue over the years? Or do you think it has now reached some sort of a [ stabilization ] in that?

Thank you, Ingrid, for the question. It's Magnus here. Yes, you can see a material downsize from last year. And last year, we still had some costs related to the big organization that we had before. But you can see now from this quarter that we're really on plan and really downsized the operating expenses quite a lot from previous years. But I would say we are -- of course, we always look to downsize more. But I think we are on a good size now at this point. It is according to the plan, I would say.

[Operator Instructions] There seem to be no further questions coming through, so I'll hand back to our speakers for the closing comments.

So thank you very much for listening in to this call. And we are looking forward to providing additional information over time, in particular from the 818 study. Thank you so much.