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

Hello, and welcome to the Medivir Audiocast Teleconference Q1 2022. [Operator Instructions] Today, I'm pleased to have CEO, Jens Lindberg. Please begin.

Thank you, and welcome, everyone, to our quarter 1 call 2022. If we move to the next slide, please, Slide #2. There will be 3 of us presenting. So with me in the room here at Medivir is Magnus Christensen, our CFO, who will cover the financials towards the end. And in the room with me as well is Fredrik Öberg, our Chief Scientific Officer, and Fredrik will cover the sort of the more data and science-driven slides sort of during the presentation today. And I will kick things off with a bit of an overview. If we move to Slide #3, please. As always, important information, and I will not go through it in detail. It's part of our presentation, and you find our presentation on our website as well. So please have a look there in terms of the more details of this part. So with that, we can move 2 slides forward to Slide #5 and start with the highlights during the last quarter. And we will split things in 2 parts, which we usually do. But when it comes to our lead asset, fostroxacitabine or fostrox as we would like to sort of talk about it in a shortened form, and then we'll also talk about the remainder of the portfolio. But the focus will be on fostroxacitabine with regards to innovation. And that's also where we spend most of our time as a company in terms of focus and priority. So in the last quarter, we had first sort of the additional sort of biomarker data for the monotherapy, which we presented at the European Liver Cancer Congress and supporting the proof of concept and supporting for the previous data. Fredrik could touch on this a bit in his slides. Apart from that, in terms of daily business, focus is to continue to initiate additional clinical trial centers in our combination study. Those of you who follow us and know our past know that we initiated the study just at the back end of 2021 when we dosed the first patient in the combination study in one of our sites in the U.K. And we have U.K. sites up and running from the beginning. We are now started during quarter 1 focusing then on adding additional sites in Spain and South Korea. And that's especially important that we have sort of almost a roughly 45% of the planned centers are in South Korea, and that will be important for the future development of fostrox in that region. So 3 countries in total, U.K., Spain and Korea, will be part of the Phase Ib and the Phase IIa. If we look to the other side of the portfolio, the partnered assets, our birinapant asset, which we out-licensed to IGM Biosciences from San Francisco. Two things in the quarter. One, they are also doing a dose escalation study of this combination, which they started sort of in 2021 as well a couple of months before we started the fostrox study. They have cleared the first dose escalation cohort with no DLTs to date. The other part, very encouraging, recently at the AACR meeting in New Orleans, we presented the combination of preclinical data, which confirmed the strong synergistic tumor cytotoxicity, which we see before but now in a range of tumors. So quite encouraging data sort of supporting this development. And then finally, in another piece of data in the quarter was the subgroup analysis that we run on the Phase II MIV-711 study for osteoarthritis showing significantly reduced osteoarthritis-related pain. And both the birinapant data and the MIV-711 data, Fredrik will touch upon a little bit later in the presentation. So with that, and then we'll come back to some of the data, et cetera. I'll go through a little bit more detail to start with our lead asset program. So can we move to Slide 6, please, before we go into that. So the -- when we look at Medivir in terms of sort of as a company and as a team in terms of what we're focusing on, there are 2 elements to our strategy. One, we do believe we have a unique first-in-class lead asset in liver cancer, which is fostroxacitabine or fostrox as I mentioned. And then for the remainder of our portfolio, which I'll show on the next slide, we are focused on sort of partnering strategy, finding partners to further develop those assets. So we drive the development of fostroxacitabine, and we partner out the remaining assets. And if we go to the next slide, which is Slide #7, I would say. This is the pipeline overview. Just to kind of give a snapshot of where we are at the top, our in-house program, which at the moment is in development for -- or we're running a Phase Ib, Phase IIa study combination with 2 arms, which we'll talk about in a little bit and which is then sort of wholly owned by Medivir and wholly sort of driven from the development by us. And when we talk about sort of next events or next steps in the journey then the next step is to select dose for each of the combination arm and then start move into dose expansion. For the other programs for partnering, the green-marked programs are the ones that have a partner for and the ones in white are programs where we are now sort of exploring partnering options to find a suitable way forward that add value for us and for the compound. And as I mentioned previously, so the birinapant is currently running a Phase I combination study with IGM-8444. And you see on the right-hand side that the potential next event for each of those assets. But if we stay focused on our lead asset, fostrox, let's move 2 slides ahead to Slide #9, please. Before I hand over to Fredrik, just a reminder of we are sort of at the initial step. We are focused on HCC, i.e., primary liver cancer for a couple of different reasons. One, it is a significantly growing market. But more importantly, it has a very large unmet need. So we're anticipating, as you see on the graph on the left, the market to grow quite significantly in the coming 10 years. On the right-hand side, from an unmet need perspective, it's a quite underserved tumor area. And despite recent advances, there are many patients that still don't respond. So we are seeing overall response rate for systemic treatment sort of somewhere around that 1/3 area. What we see from a development perspective is that the growth of the market will likely be driven to a large extent by combinations, could be 2-drug combinations, potentially triple combinations as we move forward. And I think that's something to keep in mind as when we go through some further details of the program. So clearly, a market with -- a growing market with a large unmet need. So with that, I'll hand over to Fredrik, and we can move to Slide #10.

Thank you. So if you're familiar with cancer therapy, you will know that chemotherapy is the backbone of many cancer treatments. However, in liver cancer, chemotherapy systemically administered has been largely unsuccessful. We believe that by the prodrug, fostrox, we've solved this problem. So one of the reasons why it's probably unsuccessful is that it's difficult to reach sufficient concentrations of the drug in the liver while not at the same time having systemic toxicities. So fostrox is a prodrug. It's taken orally. It's stable in the gastrointestinal tract, taken up and delivered to the liver. In delivery, it's rapidly metabolized. Therefore, we can achieve higher exposure in the liver of the drug. There is some added benefit of this prodrug as well. We circumvent a lot of the resistant mechanisms that are commonly used by cancer cells. So therefore, we think we can have high exposure and a lot more potent efficacy in the liver for the tumor cells. On the right-hand panel, the data from biopsies from the Phase I monotherapy study. It shows that the DNA damage, which is what this inhibitor induces in the tumor cell is observed in the tumor but not in the adjacent normal liver tissue, which is actually just what we wanted to achieve. So normal liver tissue is not damaged by fostrox, but the tumor is. So if we move to Slide #11, we did also obviously measure efficacy in the liver measuring the size of tumor lesions. Now in Phase Ib, we allowed patients from many different tumor types. So both primary liver cancer, which is HCC and cholangiocarcinoma, but also liver metastasis from other primary tumors like colorectal cancer. These were patients who have exhausted other treatment options. So many of them have gone through 3, 4, 5 or more treatment lines. If we look at the left panel, that's depicting the tumor volume in liver target lesions. And what we do see there is that the group of primary tumors, cholangiocarcinoma and hepatitis -- hepatocellular carcinoma, HCC, show a very good response with stable disease over a longer period of time. This we found very encouraging. And at the same time, the safety profile was supportive of moving forward with the development. And as I said, liver biopsy data really showed proof of concept, really demonstrating that the effect was in the tumor cells and not in the liver itself. As we move to the next slide, Slide 12. We, as Jens pointed out, are looking to combinations. And there's good reason to think that combinations will be effective in this type of tumor. There are 2 different mechanisms of action that are predominant in the HCC space. One is the stimulation of the immune system, checkpoint inhibitors, usually anti-PD-1 antibodies. And the other one is blocking tumor blood supply and angiogenesis, either with antibodies or with tyrosine kinase inhibitors. And there's a lot of precedent for combining chemotherapy with checkpoint inhibitors, a lot of approved combinations out there in the market. And there's a theoretical rationale for this. By inducing tumor cell death, DNA damage, we increase the presentation of tumor antigens and increase the immune response. We also have support from preclinical models demonstrating that we can enhance the effect of anti-PD-1 antibodies with adding of fostrox. For the anti-angiogenesis type of therapeutics, we know also from preclinical models that we can enhance the effect, the antitumor effect. But there is also a theoretical reason why this is likely to work. And that is that increased hypoxia, which is the result of lack of oxygen when you treat with the tyrosine kinase inhibitors will increase also the active metabolite of fostrox. So combined, they would probably give a better response. So if we move to Slide #13. That summarizes why we think that fostrox is a unique drug in the HCC space based on an innovative combination of a proven technology that is a prodrug technology and a proven mechanism of action, induction of DNA damage and cell death that we know work and is well established in cancer. The product mechanism that we have used or modified has been used for anti-hepatitis C drugs such as Sovaldi. So we also know that, that type of mechanism works. And by using this prodrug approach, we bypass any resistance mechanisms and increase the potency of the drug. And within the HCC space, this is a unique mechanism of action, making it attractive for various combinations. And then I leave over to Jens.

Thank you, Fredrik, and we can move to the next slide, please, #14. So a bit of an overview slide on the -- so the fostrox development from start to where we are now. And you can read from left to right in terms of when we started the journey in 2016 and onwards. And I think the focus is more on the right-hand side. And as we said just to kind of give the overview where we are now in the Phase Ib, Phase IIa dose escalation combination. And then sort of next steps coming up, we'll be sort of selecting the dose. And with regards to -- and it could tactically be different combination dose for each of the combinations. Remember that it's the -- we are doing it with 2 different arms. And I'll show that on the next slide, so you see a little bit more clear picture. But deciding the dose and then moving into dose expansion is sort of the next step. We will also, this year, as you know, we talked about Spain and Korea and U.K. being part of the study. We sort of clearly for the next phase as we then sort of get sort of combo data and start to move towards Phase IIb, we clearly want U.S. to be part of it. So we are initiating steps this year towards an IND with an aim to establish an IND in 2023. So the U.S. is part of further development as well. With regards to the combination then in terms of details what we're running at the moment, if we move to the next slide, please, Slide 15. This is what the ongoing combination study looks like. There are a lot of detail on this slide but sort of -- but the highlights here are: first and foremost, we are running 2 arms. There is one fostrox with LENVIMA, and there is an arm with fostrox plus KEYTRUDA. And then there will be a decision point for each of them where we decide the appropriate dose. And as long as we establish an appropriate dose for each of the arms, both arms will be rolled into the dose expansion and in the dose expansion where we will be able to primarily see efficacy data, whereas the dose escalation is more a sort of safety and tolerability. And as I mentioned, so the decision comes -- so the point comes there in terms of on the back of escalation. Investigator sites split. As I mentioned, there is around 60-40 or maybe even 55-45 split EU versus Asia. And we're highlighting that again because HCC is a much more common disease in Asian population driven largely by hepatitis B and hepatitis C. But that means it's important to have Asian data as well in this early phase in order to sort of support further development in the Asian population. So with that, just to sort of summarizing in terms of where we believe -- sort of what we believe are the kind of differentiating features of the compound, we can move to the Slide 16. As Fredrik outlined nicely, we do believe it's a unique and it's also a first-in-class potential treatment for primary liver cancer. There is a significant unmet need with commercial potential. And I think as Fredrik outlined, which we feel is quite important to convey, is that there is a lot of development going on in HCC. But a lot of that development is either in the checkpoint inhibitor class or in the TKI class, meaning we don't see fostrox competing with those classes. We see fostrox complementing with the mechanism of action being sort of the first sort of locally targeted liver-directed chemotherapy. And it makes sense to combine it with either class. And Fredrik said, the unique mechanism of action in that sort of selectively targets cancer in the liver makes it also bypass resistance mechanism. So hopefully, increasing the probability of success from a technical viewpoint. And then finally, sort of it is a well-established sort of way of treating cancer. As Fredrik said, chemo is the backbone of many cancers but not here because of the difficulty of getting it to the liver, and we believe we have solved that problem to be able to sort of get to the chemotherapy in the relevant concentrations into the liver. So with that, let's move 2 slides ahead, and we will talk about just a couple of words on a couple of the other compounds. As we mentioned, we spent most of our time driving the fostrox development forward, but we are also trying to sort of maximizing the value of the other assets and partnering and some of the news on the other asset that we mentioned initially. So if you move to Slide 18, and then Fredrik can walk through the data that was recently presented.

Okay. Thank you. So of course, I mean, we're really excited about the fostrox progress and the data that will come during the year. But there are other things happening as well that is in our interest. And during the quarter 1, IGM Biosciences published data at the AACR just a couple of weeks ago demonstrating new preclinical data regarding birinapant and their DR5 agonist, IGM-8444. And the upper panel shows some of these examples of in-vivo preclinical tumor models where birinapant is combined with the IGM-8444. And those of you who have seen this type of tumor growth data from animal models will appreciate that there is a really strong synergy. You seldom see this kind of preclinical data, and I think this has generated a lot of excitement, I mean, both in the sort of science world but also among investigators. And as Jens mentioned, they also in this poster demonstrate that this is really across many different cancer indications. So it's not just one. It's broadly applicable to many different cancer types. The other thing that they highlight in this poster is the lower panel, and that's really to show that also resistance develops. Of course, it always does with any treatment, but resistance to IGM-8444 can be overcome by adding birinapant. So the combination induces synergistic cell killing in cell lines where you have acquired resistance against the DR5 agonist, which also opens the possibility of achieving better clinical results in the future. So IGM is -- has a Phase I study ongoing with this combination. And they have publicly announced that they have cleared the first dose cohort. The study is that as many studies designed in a dose escalation phase and a dose expansion phase. And so far, they have not seen any dose-limiting toxicities in this study. And they're currently enrolling more patients in this dose escalation phase in the second dose cohort. So we're really happy that they're moving ahead with that, and we're looking forward to seeing data from that study as well. The other thing I want to highlight is the next slide, Slide #19. As those of you who have followed Medivir for some time, you would know that MIV-711 is a cathepsin K inhibitor designed to treat osteoarthritis. In the Phase IIa study that was published a little while ago, the primary endpoint was pain, and this was not reached. However, disease-modifying effects were seen and statistically significant. In this group, which is quite -- patients which are quite heterogeneous, it's known that there are many confounding factors in measuring pain. And one of them is that if you have pain in both knees, you tend to report pain in a different way. And there's a confounding effect from your other knee, which is not measured for the pain readout. So what we did was a subgroup analysis on these data. We showed that in a subgroup with predominantly unilateral knee pain, just knee pain in one knee, we do see a significant reduction of OA-related pain. And that's the left graph in this. So we can see statistically significant effects on pain when we analyze this subgroup. Of course, this subgroup analysis does, by its nature, reduce the number of patients quite a lot. But it's also built our confidence to see that also in this group, we do see the disease-modifying effects on cartilage and bone. And on the far right, the drug does what it should do. It inhibits cathepsin K. So that readouts for a biomarker showing that cathepsin K is inhibited. And so there are 2 things to take home from this subgroup analysis. It strengthens our hypothesis that MIV-711 does affect both disease structure, cartilage and bone, but also pain. And it points us in the direction of guidance for future clinical trials that could be designed in a more appropriate way. So with that, I will leave over to Magnus.

Thank you, Fredrik. Please move to Slide #21. We can see the financial summary for quarter 1 this year, which I will briefly comment on. All numbers are in million SEK. The turnover for quarter 1 amounts to SEK 0.5 million, reiterate all to low income from last year. Last year was higher, but that includes the upfront payment for the birinapant that we made last year. Other external expenses are higher compared to last year and relates foremost to the high clinical costs for ongoing fostrox combination study. As you can see, the net loss for Q1 is around minus SEK 33 million and according to plan that we have for the year. And the cash flow from the operating activities for quarter 1 amounted to minus -- roughly minus SEK 40 million, which is also in line with the plan that we had for the year. And with this, the cash position at the end of Q1 is SEK 181 million. And according to time plans that we have, the cash will last well in year 2023. And with this, I will hand over back to Jens.

Yes. Yes. So in terms of rounding off and go to the Slide #22, please, as our last slide. And kind of picking up on what Magnus sort of talked about sort of the financials being in line. So the financials are clear. We're reflecting where we are as a company in terms of where our focus is as we initiated the Phase Ib, Phase IIa combination study sort of at the end of '21. That's now our focus in terms of driving it. So sort of spending really from a financial viewpoint, be a focus in 2022 and as we deliver on the priorities for the drug. So in terms of progress that we've seen sort of over sort of the last 12 months, we do see that as we talked about today in terms of accelerating fostrox presenting one of data last year, initiating the combination sort of towards the end of last year and then this year, opening up more centers and opening up patient centers as well. And then looking ahead, kind of one thing to sort of the game of finding the dose for each of the combinations as the first step in terms of initiating the dose expansion. And as I mentioned, sort of taking steps towards -- the U.S. steps as well in terms of the initial steps for an IND filing. And then similarly, the partner assets, recent progress across the board with new data and movement for birinapant and as well as MIV-711. We've also seen new data movement on the remetinostat sort of opportunity over the past period. Moving ahead, sort of birinapant combination, much like the fostrox combination sort of finding the dose and then making a decision from an expansion cohorts perspective where to go as the next step. So we sort of -- a lot has happened over the past year, and we do look forward to sort of a continued sort of eventful 2022 and onwards as we see sort of readouts and developments across both fostrox and our partnered assets. So with that, we conclude. We can move to the next slide and begin with Q&A.

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

So first on fostrox, sorry. As you're looking at the different geographies, does anything give you pause right now with regard to COVID-19, especially as you're looking to have such a larger population in South Korea as well?

No, not necessarily. So I mean as we talked about sort of Q1, a lot of focus on sort of initiating sort of sites across the regions, including Korea. And that plan has progressed as planned. And there's been no feedback as in challenges to COVID. I mean, clearly, could there be some? I mean, you never know, but there hasn't been any flags raised on this topic. On the contrary, we've had sort of good initiation meetings and a lot of focus on it from the different sites. In some places, the sites have been together and some, they've sort of moved. They've been working virtually, but it's all gone ahead according to plan.

Got it. No, that's helpful. And then just keeping on the same topic, just wanted to make sure, essentially, obviously, it's a small molecule. So it's technically easier, but that you're all set regarding manufacturing and any requirements regarding supply chains.

Short answer is yes.

Okay. Good. And then I love the...

It could be a long topic if we sort of talk about it all....

Exactly. Right. Of course. Switching over to birinapant. I guess, I mean, obviously, a lot has to do with IGM, and they're responsible. But any really news flow to point to? But I guess that we can look for from the data standpoint, but really on the milestone payment front and anything that we could look for this year and potential sizes?

I mean, of course, as we mentioned before, it's based on development of the study and regulatory and date milestones. And of course, when they will enter into Phase II or something else, then of course, we trigger a milestone. But we have not disclosed any amount of the milestone, but I could say it's fairly straightforward [indiscernible] compared with other I could see. That's what I could say.

Understood. And then lastly, with regard to 711, obviously, you continue to build positively the -- building the data and the drug profile. So obviously, just based on the addressable market and you said this in the past, someone else would look to do this. So I guess based on what you have in hand already, can you at least provide at the minimum some body language with regard to how BD looks around it currently?

Let me say the -- let me turn it back to you, Joe, just to kind of elaborate. What your -- what is your question sort of...

You're looking -- you would obviously look -- based on the size of the OA market, you'd obviously look to out-license this asset. So what is the status of BD discussions is a simple way to ask it.

Yes, yes, then it becomes a bit more straightforward. So I mean let me do -- let me say the following that clearly -- I mean, we are having discussions, and we've had discussions with different types of parties as -- but I think we've been -- we also been open with and in terms of when we look at the subgroup data, et cetera. The subgroup analysis we have done together with another third party, not another company, but sort of another CRO company that are heavily invested in the -- and they've done a lot of work in the OA space. And they flagged there really is something here that didn't come out in the Phase IIa study. So we've had those discussions. So clearly, we are seeing interest, and there were some questions around that sort of Phase IIa data. And one thing to understand that the hypothesis around 1 knee versus 2 knees, there is a pain reducing sort of efficacy. So those discussions we've had with others. So we are clearly -- we're seeing interest, and that's why we did this subgroup analysis. And that's why we also kind of flagged the data here today, and we have it on our portfolio overview because there is interest. It's difficult to kind of highlight sort of level of or how many -- I mean, you don't want to go into that. But we highlight the data. We have it on our portfolio overview for the reason that, yes, there are interest in the market of finding the way forward because there are parties who know the OA space who believe that there is something here, even though the primary endpoint on the IIa study didn't hit.

[Operator Instructions] We have another question from the line of [indiscernible] from [indiscernible] Bank.

But maybe if you would elaborate a little bit further about the ongoing MIV-808 (sic) [ MIV-818 ] study. And is it -- do you find it easy to find patients and to recruit them? Or is it a very competitive environment? You mentioned there's a lot of clinical trials ongoing in the space.

Thanks, [ Franz ], for the question. And I will start by saying that we are -- I encourage you that we're deliberately moving away from the 818 sort of reference and that we try to use fostrox, it's easier for the sake of moving towards something, sort of not that I want to sort of be too picky about it. Relevant question. I think I would say the following. I mean, clearly, there is a lot of activity in this space. And I mean, that generates on the one hand, competition, but it also generates sort of a willingness and an engagement. So I think the fact that it's a lot of activity is both competitive but also sort of supportive in terms of -- then there are sort of -- there are a lot of focus on finding patients and there are focus in the patient community about being part of studies. So it kind of helps as well. I think that's one reflection. Two, I think the one thing to keep in mind is that HCC is a -- it's not like lung cancer or breast cancer. It's a smaller disease. So in that respect, there will clearly be fewer patients. So with regards to patient population, it's a smaller patient population than in other areas. So when you talk about the dose escalation cohorts, et cetera, yes, it might be sort of somewhat more challenging than if you have a solid tumor base to drop. So I think that -- but that's more of a kind of a general normal sort of fact that it is a relatively small population where -- that you are drawing from. But as I mentioned sort of previously and then sort of the focus has been in Q1 because if you opened up the study with a couple of centers in the U.K., and the majority of the centers will be outside of the U.K., Spain and Korea. And that's why it's been so important to get those countries up and running sort of as of right now.

Great. Is it possible to give any comments if you see the same kind of pace of patient flows in both your arm store? Is it more or less easier to recruit patients in any of the arm?

That's a bit too early to say, I would say, yes.

And as there are no further questions, I'll hand it back to the speakers.

Okay. Thank you, and thanks, everyone, for engaging and listening. If you just move to the final slide, more as a reminder in terms of upcoming activity. I mean, clearly, we look forward to engaging with everyone regularly. We are presenting at the upcoming ABG Life Science Day on May 18 and then subsequently sort of in September sort of presenting at the Pareto Securities Healthcare Day and sort of in terms of upcoming activities. With that, thank you all for calling in, and wish you all the best, and have a great rest of the day.

This concludes the conference call. Thank you all for attending. You may now disconnect your lines.