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

Hello, and welcome to the Medivir AB Q2 Report 2021. [Operator Instructions] Today, I am pleased to present Magnus Christensen, Interim CEO and CFO; and Fredrik Öberg, CFO. Please begin your meeting.

Thank you, operator, and welcome to Medivir's Q2 webcast. Please move to Slide 2. Today's presentation will be held by myself, Magnus Christensen, Interim CEO and CFO of Medivir; and Fredrik Öberg, our Chief Scientific Officer. I am the interim CEO during the recruitment process of the new CEO coming into the company. Next slide, please. I will not go through this, but recommend you to read it at our homepage, where you can find the presentation as well. Please move to Slide #5. Here is today's agenda. I will start off with an overview of Medivir, then take you through the financial highlights for quarter 2 and then talk about the remetinostat revenue share agreement that we announced beginning of this week. Then I will hand over to Fredrik, who will present MIV-818 in more detail and most importantly, our planned combination study. And then Frederic will continue to present our other assets as well before we open up for a Q&A session. Next slide, please. Medivir was founded in 1988 and listed on Stockholm since '96. And with the financial injection in quarter 1, we believe we have a strong cash balance. And in the end of Q2, we reported a cash balance of SEK 248 million. And according to our current plans, the cash run rate is well into the year 2023. End of Q2, we were at 8 FTEs. And as we announced in the beginning of July, Malene Jensen will join Medivir as Vice President of Clinical Development and foremost for our project MIV-818. And we are really looking forward to that and should be started in the beginning of September. And as you probably know, we focus both financially and personnel on our wholly-owned asset, MIV-818, which is a liver-targeting nucleotide prodrug. MIV-818 has received orphan drug designation, both in the EU and the U.S. And we're currently in Phase Ib clinical development and plan to start our combination trial later this year, with Fredrik will talk more about later in the presentation. And the data from the Phase Ib study monotherapy, we represented ESMO in the middle of September. I would also like to highlight that we outline in birinapant to IGM Biosciences in beginning of this year. Next slide, please. Here is an overview of our clinical projects. We have a focused clinical program, MIV-818, targeting liver cancer and currently in Phase I, and we're looking forward to start the combination trial later this year. We also have a partner asset, birinapant, which will enter Phase I clinical development by IGM later this year according to IGM's Q2 report. And of course, we're very excited to follow that study. And to remind you that when IGM started combination study, we will receive USD 1.5 million. And we also do have 2 other clinical exciting programs for partnering and out-licensing, remetinostat and MIV-711, which Fredrik will present more later on. Please see Slide #9. Here, you can see the financial summary for quarter 2. All numbers are million SEK. The turnover for quarter 2 amounts of SEK 1 million, which is lower compared to last year and relates to royalty income from the circa year. Accumulated for this year, the turnover amounts to around SEK 11 million, which is more or less the same level as last year. Other external expenses are higher than last year and relates mainly to higher cost for clinical studies and mainly in preparation for the upcoming combination study. Personnel costs are lower and relates to fewer FTE compared to last year. And as you can see, the loss for quarter 2 is around SEK 17 million compared to minus SEK 13 million last year. The cash flow from operating activities in Q2 is around SEK 22 million minus compared to minus SEK 23 million last year. And as I mentioned, the cash position at the end of Q2 is SEK 248 million, and that's more than enough to complete ongoing clinical activities. And according to current plans, we will have cash well into the year 2023. Please move to Slide #11. Earlier this week, we announced that we signed a revenue share agreement for remetinostat. As a reminder, Medivir acquired remetinostat from TetraLogic in 2016. In total, there is more than 3 stakeholders in the agreement, including Medivir. The original arrangement between Medivir and the stakeholders, including milestone payments as well as royalty obligation to the stakeholders then Medivir develops market or out-license remetinostat. And it's positive now is that the agreement has been negotiated so that the conversation that we are obliged to pay in potential future out-licensing of remetinostat is based solely on the distribution of extra future revenues to Medivir. And we believe that with this revenue share agreement in place, we have created significantly improved condition for potential out-licensing or sale for remetinostat. And with this, I will hand over to Fredrik Öberg that will present more details about MIV-818.

Thank you. If I could have Slide #13. So we're advancing our lead assets MIV-818 for the treatment of hepatocellular carcinoma. So this HCC is the major type of primary liver cancer, which constitutes a large unmet medical need. The market for HCC is projected to grow rapidly, and there are 2 reasons underlying this. We see that liver cancer incidents and mortality are increasing, partly due to an increase in nonalcoholic fatty liver disease and nonalcoholic steatohepatitis. But the major driver of market growth in the coming years is the introduction of new combination therapies, and we're expecting the market to grow from around USD 1 billion in 2020 to around USD 5 billion in 2029. So if I could have the next slide, #14, please. Our initial focus for MIV-818 is the advanced-stage HCC population. We can -- we'll see that highlighted in this treatment schedule coming up. And for these 2 systemic therapies, 2 main classes of drugs are used as standard therapy here. The tyrosine kinase inhibitors for a long time only represented by sorafenib, but then followed by regorafenib, levatinib, cabozantinib and more in this class of tyrosine kinase inhibitors. The other major class entering more lately is checkpoint inhibitors with pembrolizumab, which has accelerated approval in the U.S. However, recently, good data from combinations, especially the atezolizumab bevacizumab in first-line HCC has provided good data, rapidly changing the treatment landscape. And we see a strong trend towards combination of therapies in this space. And we know that additional checkpoint inhibitor combinations with tyrosine kinase inhibitors, for example, pembrolizumab and lenvatinib and others are in late-stage clinical development and will probably move into this space as well. And we think that we need to be in this space in combinations to be competitive. So if we move to the next Slide #15, please. A few words about MIV-818. It's an orally administered prodrug. It's designed to be rapidly metabolized in the liver, thereby targeting the active metabolites in the liver, giving high exposure in the liver and limiting systemic exposure and toxicities. This is a unique mechanism of action in this liver cancer space, which makes it attractive to be combined with many targeted and non-targeted drugs that are used in this space. The 2 major classes also have both preclinical data and scientific rationale to be combined. So the tyrosine kinase inhibitors, among other things, induce angiogenesis inhibition, which in turn induces hypoxia in the tumor and hypoxia increases the expression of certain enzymes that metabolize MIV-818 to the active metabolite, increasing the levels of active metabolite in the tumor. In terms of checkpoint inhibitors, they rely on an immune response and MIV-818 is incorporated into DNA inducing DNA damage and thereby also increasing the immunogenicity of the tumor. So potentially, these 2 mechanisms are interesting to combine with MIV-818. So if we move to Slide 16. There's an overview of the clinical development of MIV-818. We have now completed the Phase Ib monotherapy part and are advancing into combination studies. So there are several differences in the patient population, for instance, that we're going to treat here. So this combination study will include patients with hepatocellular carcinoma who have progressed on or are intolerant of first-line therapy, whereas the monotherapy with our main objective of safety and tolerability included patients both with metastatic liver disease, intrahepatic cholangiocarcinoma and HCC. These were late-stage patients with sometimes excessive extrahepatic disease. So now we are focusing in on HCC with healthier patients and also in combinations. So the first part will be a dose escalation part, either MIV-818 in combination with lenvatinib or MIV-818 in combination with pembrolizumab, a standard 3 plus 3 design to identify a recommended Phase II dose for the combinations. Then moving into an expansion phase with the possibility then to look more closely at efficacy signals and generate more safety data. The selection, as I said, was based on the evaluation of the scientific rationale, preclinical data, the safety profiles of these other drugs. But we also think strategically that this makes sense as these are the 2 main classes of drugs used in advanced HCC. So if we move to the next slide, Slide #17. In summary, we continue to advance MIV-818 and the clinical development program. We have completed the Phase Ib monotherapy, which enrolled in late-stage patients. And now we're moving into earlier treatment lines, healthier patients with the combinations. The Phase Ib monotherapy data, as Magnus mentioned, will be presented in -- at the ESMO Congress mid-September. The combination study will be -- the 2 parallel streams will be done with the combinations, and we're looking at focusing this on HCC patients who have progressed on or are intolerant of first-line therapy. We're on track of starting enrollment of patients for the combination study later this year, and we plan to conduct this study, both in Europe and in Asia. So let me say a few words about other assets. So moving to Slide 19. We currently have 2 clinical programs that we're looking to partner or out-license. Remetinostat, which is a topical HVAC inhibitor, has completed 3 Phase II studies. First one in cutaneous T-cell lymphoma, which showed an objective response rate of 40%, but importantly reduced pruritus itching in 80% of the patient. This is an aspect of the disease that is important to treat. Also, 2 investigator-sponsored studies have been performed, 1 in basal carcinoma. The data from this study was published recently in clinical cancer research. The overall response rate was 70%, and it contained -- recruited several histological subtypes of basal cell carcinoma. And lastly, the squamous cell carcinoma study that was also performed by the Stanford Group, included some different histological subtypes as well of squamous cell carcinoma, where we had a really good response, although the patient numbers were low. But nevertheless, we are very excited about the data around remetinostat because we -- now that we have sort of a Phase III-ready asset, which is effected in -- has shown positive results and is effective across many different subtypes of skin cancers. And lastly, we also have MIV-711 for which Medivir has conducted a Phase II study, demonstrating positive effects on bone and cartilage disease modifying effects in joints in the knee after a quite short study of 6 months treatment with MIV-711. And we're excited about having these 2 assets, although the osteoarthritis area is outside of Medivir's core focus at the moment, which is oncology. So I'll hand over to Magnus.

Thank you, Frederic. Please move to Slide #20. And here, we have highlighted the known upcoming milestone for the remaining part of this year. Firstly, as we mentioned, the data from the Phase Ib monotherapy, we'll present it at ESMO Congress in September. And secondly, we go forward to starting the combination study with MIV-818 later this year. And as well, IGM has announced in the Q2 report that they plan to start the combination study with birinapant and IGM-8444 later this year as well. And when they start, we receive a milestone payment of USD 1.5 million. And with that, next slide, please, I hand over to the operator to open up for a Q&A session.

[Operator Instructions] The first question comes from the line of Emanuela Branchetti from H.C. Wainright.

A couple for me. So with -- regarding the ESMO presentation on MIV-818 data, could you help us setting the expectations for the data we should expect? Will the data be focused on safety? Will full data be presented, including maybe biomarkers data from the study?

So I can answer that. The main focus and the primary objective of the Phase Ib monotherapy was safety and tolerability. So of course, that will be an important part of that presentation. But there will also be, of course, some of the exploratory objectives like biomarkers presented.

Got it. And with the Phase I/IIa started in Europe, you mentioned in your prepared remarks, Magnus, you are planning to expand the development with studies in Asia. A conversation with the partner already started? And when should we expect an update on that?

Partner for MIV-818, is that what your question?

Yes.

Okay. Thank you for the question. As we have said before, we are really looking forward to starting the combination study. And then I think the best for Medivir today is really to gather all the data from the combination study and from the expansion phase. And then I think the data will tell us what the next step is for Asia and the remaining part of the world as well. So I think we will see the data first before we take the strategic decision on that.

Got it. And also regarding the remetinostat, could you provide more color on the expected regulatory path for that? Will this require a single Phase III study? And if this is the case, how many patients and how longer would that study require since we -- I think one of the objective would be to test durability of the effect?

So it will be different -- it's difficult to say in general terms because it will be different depending on which indication you would prioritize. Of course, the competition is different and the possibilities of doing a placebo-controlled study is also different. So I can't really detail that for you. But we believe that the fact that there are 3 indications that are potentially interesting for remetinostat opens up several possibilities for different partners who are interested in different areas to continue to develop and move into a Phase III study.

The next question comes [ Jacob Mikel ] from Kempen.

I have a few questions here for Ingrid who is the analyst on the stock. So I have a few questions on the MIV-818, the upcoming trial. Maybe I missed it, but can you please just clarify what will be the specific line of treatment that you will focus on? And do you have an estimate of what is the percentage of the total HCC patients that will move to this line?

So the target population are patients who are either intolerant or have failed first-line treatment. And this -- with the advent of the new combinations, this is sort of uncharted territory because we don't really know how large that population is. We expect that, that population will grow. So second line will grow, but it's also a way into that space. So I guess the data from that study will tell us if we are continuing in second line or trying to move in either direction. But I guess that your question is well taken because it will be very interesting to see how that first line develops. We now have the combination of atezolizumab and bevacizumab, but there are other contenders there as well.

Okay. And do you plan on moving both combination arms into the Phase II portion of the trial or are you just going to select one of them? And if you do, is it going to be a safety and efficacy benchmark that you'd be looking at?

At this point, we don't know. We have sort of contingency plans to go forward with 1 of the 2 combinations or both depending on the data we see in the dose escalation part. So it's a possibility, of course, to do the expansion in one, if that seems more favorable. And the second part of your question was, I didn't catch that.

If you have any safety and efficacy benchmark that you'll be looking for?