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

Welcome to Medivir Q1 Report 2025. [Operator Instructions] Now I will hand the conference over to CEO, Jens Lindberg. Please go ahead.

Thank you very much, and welcome, everyone, to our quarterly report for the quarter 1 2025. And we'll go through a presentation for the first sort of 20, 25 minutes, and then we'll open up the floor for questions. As we dive into quarter 1 and quarter 1 highlights, the most important sort of step in the first quarter was, of course, presenting the final study data from our Phase Ib/IIa study, which we presented at the EASL Liver Cancer Summit in Paris in February, a study that's taken way longer to conclude and close than we initially anticipated as patients have been staying on treatment much, much longer than we initially estimated, which is sort of clearly a positive signal with regards to patients benefiting from treatment. Step 2. We continue preparations for the planned Phase IIb study, which we named FOcuS-2. So that continues. But what also happened in quarter 1 was an important first step from a patent protection perspective, and that is we received the first patent approval for the important combination of fostrox with lenvatinib by the European Patent Authority. And then, from a business development and partnering perspective, the key step was Infex Therapeutics, our partner in the U.K. They signed a licensing agreement for the MET-X development in India. We'll come back to that element sort of briefly as well towards the end. With me in the room, as always, is our CMO, Pia Baumann, who will be walking through some of the data that we presented at EASL. Magnus will come back towards the end with regards to the financials. And then our CSO, Fredrik Oberg, is in the room as well for any sort of questions during the Q&A session. So with that, let's dive into the key event of the first quarter, i.e., the presentation of the final results of the fostrox plus lenvatinib study. Pia, over to you.

Thank you, Jens. Yes. And these end-of-treatment results were presented as Jens said in Paris at the EASL Conference. And the study actually closed in November last year. And the data that we presented comes from this study. And I thought that maybe I'll just do a little bit of a short repetition of what the study was about. And also, the poster is available on Medivir's website. You can see it as a little tiny thing up to the right corner here. But if you would like to look more in detail, we have it on the website. So the eligible patients for this study was those who had locally advanced unresectable or metastatic hepatocellular carcinoma or as we continue to say here, liver cancer. The patients were enrolled at 15 sites in the U.K., Spain and South Korea, with the majority receiving a fostrox dose of 30 milligram that was taken orally for 5 days in a 21-day cycle, together with Lenvima that was given in a standard dose for liver cancer, and that was also given orally on a continuous basis. So in order to sort of understand responses, imaging was done with both CT and MRI every 6 weeks during the full follow-up time. And the primary endpoint for this study was safety and secondary endpoints included overall response rate, disease control rate -- time to progression and overall survival. And that is what we are going to focus on when it comes to results today. So we can go to the next slide. So we now have a mature median follow-up for this patient population, which is 10.5 months in median. And fostrox and Lenvima showed here a substantially longer median time to progression with 10.9 months and an overall survival with 13.7 months. And this is compared to mainly retrospective data that we have seen in the second-line setting. So it's really encouraging data. And we have also seen previously that we had a best overall response rate was 24% with a median duration of this response of 7 months and with a disease control rate of 81%. So it is encouraging from both the safety and efficacy perspective to see that patients are benefiting from this treatment during a longer period of time. And we actually have these patients that now is not in the study anymore, but is still ongoing after being transferred for -- to a compassionate use program and has been on the treatment for more than 2.5 years. We can go to the next slide. So coming back to this that we sort of see we evaluate the patients relatively early, looking at overall response rate, but it's also very important to understand, okay, what happens with these patients. And you can see this -- yes, we call it spaghetti plot, but -- to understand sort of what happened during time. And the patients continued to be relatively stable during this treatment time. So those who actually received response continued with response, as we said, for about 7 months in medium, but the majority had tumor control. And actually, tumor reduction was seen in more than 75% of the patients, and we could see a median duration of clinical benefit of 11.3 months. And what we mean with clinical benefit is really those who responded and those who had a stable disease, which is really important in liver cancer to also have a stable disease for clinical benefit. And this stable disease should be more than 24 weeks to be sort of included in the clinical benefit rate. So -- and if you compare with what you see in advanced liver cancer, this is very long and particularly in the second and third-line advanced liver cancer. So we can go to the next slide. So the safety and the tolerability profile with this combination was really good and the majority of the patients could continue with the initial dose of fostrox through the treatment. For the 29% that require dose reduction of fostrox in order sort of to find the correct individual dose level as you often see in this kind of program, because you want to be as high as possible, and you always know that some of the patients will dose reduce. But that sort of is also something that we are looking carefully into because we don't want to see that this kind of dose reduction affects the efficacy outcome. And in this slide, you can see here that the dose reduction didn't really impact the response to treatment, the ones who are in the orange here are those who dose reduced. And we could see that reduction in target size was seen independently if they had done a dose reduction or not. So I think I'll leave it back to Jens. Thank you.

Thank you, Pia. So that kind of closes out the study in terms of sort of having now presented final data. So we've lived with this study for quite some time and happy to be able to present the final and the mature data set. As I mentioned, I mean sort of sometimes sort of we don't often speak too much about patent approvals, and it's sort of something that is usually -- I mean, there is an expectation that it is business as usual. We wanted to highlight this one because this is with the combination patent of fostrox plus Lenvima, having that approval in Europe, there's a couple of things that are important. One, having the European authority approve it, that signals positively the follow-on from other patent authorities as the European authority is seen as a highly respected one and one that others do follow. So that's one critical element. The other part is that it is with fostrox plus lenvatinib and it is for liver cancer and cancer metastases in the liver. And since this is the combination, and this is the indication that we are targeting and that will be the key one for the drug, this will be a strong patent protection, i.e., then extending the patent protection until 2041, which sort of provides protection for quite a long time. So it was an important sort of step in terms of generating protection support for as long as we possibly can. So quite encouraged by that. So then having seen sort of data, sort of final data, the mature data set sort of being quite encouraging, we now see that the combination, we're extending patent protection until 2041 to sort of somewhat broaden our horizon sort of one of the things that, that we continue to see in this area is that the -- whereas many other tumor types, we see sort of lower incidences and lower death rates, liver cancer is one of the tumor types that unfortunately go in a different direction. We see already today growth in liver cancer, very -- many times driven by growth in fatty liver disease. This is a relatively recent article where sort of they've looked at sort of how is fatty liver disease anticipated to evolve in the next -- in this case, they modeled it until 2050, which is sort of quite some time. But basically, it's going to grow at an alarming rate. So -- and the consequence is that if you have a fatty liver disease, there's a study at Karolinska that has shown that you have a 17x increased risk of being diagnosed with liver cancer. So an alarming rapid increase of fatty liver disease will give a very sort of significant increase to liver cancer. And the anticipation here is that the incidence and now we look at U.S. numbers that the number of patients, the incidence number of patients, will double. And with incidence number of patients doubling, it will grow the prevalence even further. So when you look at it from a commercial potential perspective, the liver cancer sort of market growth will grow even faster because more patients will be treated, more patients will be treated longer with better treatments being available in first-line and earlier settings. So we are anticipating quite a growth in the market. And just to kind of highlight the numbers in the article sort of while we see a certain degrees of fatty liver disease, that drives an even faster increase with regards to the incidence of, in this case, HCC or primary liver cancer. So I think we've shown previously, and this is sort of shorter-term estimate that the market -- we're seeing the market grow. That market is growing quite rapidly, estimated to grow rapidly until 2030. So if we look at some of the latest reports and the latest sort of developments with regards to fatty liver disease, these numbers in terms of market growth is likely to be underestimated. And if anything, it will probably grow even faster than this. So clearly, a quite significant commercial potential. And then to kind of close out the events of the first quarter, as I sort of mentioned, sort of we've been our partner in the U.K., originally AMR, but sort of later renamed to Infex Therapeutics, who are driving the MET-X program. They signed an agreement or licensing agreement with -- for development in India for a Phase I study to be followed by a Phase II study. The important element sort of if you dig through the press release and the information they've shared is that they are also working with the company in this case, Venus and designing the study so that the data from these studies are also applicable and can be used with regulatory authorities in other parts of the world. So it's a good way of driving the program forward. Clearly, Infex will receive license fee payments, milestone payments, et cetera, and our agreement with Venus is a relatively strict sort of revenue share. So we are entitled to a share of any potential sort of revenue that Infex receives from this program. So with that, we'll close out sort of the events of the first quarter and go to the financials before we go back to Q&A.

Thank you, Jens. If you can move to Slide #16, please, where you can see the financial summary for the quarter 1 and all numbers are million SEK normally. The turnover is in line with our expectations, totaling SEK 0.6 million, and it's primarily attributed to the royalty income for Xerclear. Other external expenses have decreased significantly compared to previous year, as you can see, it's mainly due to the closure of the study, resulting in reduced clinical costs. And however, there still will be some future expenses related to the study closures, which aligns with our forecast for the year. Personnel costs have increased primarily due to the share incentive program that we introduced last year, although there is no cash impact at this time for the program. The operating loss for quarter 1 was [ minus SEK 13 million, ] which is in line with our forecast and much lower than last year. The operating cash flow for the period amounts to almost minus SEK 27 million, which is lower than last year. And this figure includes the reduction of certain year-end accruals and costs associated with the study, which were paid in quarter 1. And at the end of Q1, the cash position is SEK 35 million, which is consistent with our forecast. And considering the cash balance at the end of March and the loan facility that we have, we project the current cash runway into Q4 2025 based on the existing plan and current assumptions. And with this, I will hand back over to Jens again.

We'll stop there and move to Q&A. So operator, we can open up the floor for questions.

[Operator Instructions] Question comes from Richard Ramanius from Redeye.

Let's start with the fun question first. So how -- where are you at with preparations for the Phase IIb study? And how are your works finding funding for it going forward?

Two questions. One, with regards to -- I mean, we continue -- we didn't go into sort of study design and the details because we've presented that previously. That sort of remains the same, stays that it is. We continue to drive the process forward together with our CRO partners in preparation -- in preparing the study. As you know and as we've communicated previously, those preparations are moving on nicely, but we do need to secure financing in order to run the study. And that process is ongoing with sort of with different discussions in terms of moving forward and finding a good way forward, but also its details we can't cover and say more until those discussions and those processes have concluded. So it's sort of similar in terms of what we've communicated in the past. But the work with regard to preparing for the study together with the CRO partner, that continues.

Okay. I just have one final question for Magnus and we expect further decreases in operating costs on a quarterly basis before the Phase II study kicks in?

I mean we have -- the existing agreement that we have with the CRO for the study is closed now. I mean there are some certain milestone payments that will be made, but it will -- it's difficult to say exactly if it happens in Q2 or Q3, but there will be some milestones payment that has to be made. So it's -- and it's aligned with the forecast for the year. So there will not be any surprises. So I mean, we will have the cash runway, as I said, into Q4 that will remain the same, but it's difficult to say when the cost will rise in which month or quarterly. I hope that answers your question, Richard?

Yes.

The next question comes from Klas Palin from Carnegie.

Yes. And I guess my question will be in the same -- at the same direction as Richard. And I just wonder if you still feel you're on track with the preparations in the Phase IIb study and perhaps if you are expecting to dose the first patients in 2025?

I mean I think I'll say what we said in the past and continue. I mean the preparations with the CRO continue sort of nicely. So we have a very good collaboration with the CRO. So those preparations are moving along as they have sort of previously. So there's no change there. I mean the key element that will impact sort of the dosing time lines will, of course, be sort of securing the financing. But with regards to planning for preparations and engaging sort of with sites and CRO, that continues as it has before.

So if you have the funding in place, dosing of the first patient would be possible in 2025?

I mean in a situation where sort of we secured the financing, definitely, yes.

Okay. And are you feeling you are making progress with this funding discussions or what's happening?

The boring part with this question is that sort of I can't really sort of say anything we've concluded the sort of any discussions and we've concluded the process. Are we having discussions? Are we sort of in processes to sort of find ways forward? Yes. But in terms of communicating any sort of details or any more specifics regarding it, until we're there, I think it's just difficult to say anything. I mean, sort of we are having discussions. We are in processes. And I think that's what we can say at this stage.

*Okay. And sort of the same question then. And if you are considering drawing on your loan facility and if could that happen be in Q2 or Q3?

I mean, of course, that's something that we're really looking into. And I can say that today, we have not used the loan facility, but it could happen in Q2 or beginning of Q3. We have not decided yet.

[Operator Instructions] No more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much, and thank you for the questions. I'll just sort of sum up. I mean as we said, we are -- we continue on the path that we have been and still are on. We do have the first and only liver target treatment for primary liver cancer. We are -- now that we've closed the study, now that sort of we've seen the mature data, we continue to be quite encouraged by that data set and the opportunity that it provides with regards to moving forward. I think we haven't touched on it that much today, but we continue to see that the key development, external development in liver cancer continues to be in the first-line space, whereas there is relatively limited development in second line. So the opportunity to move forward with speed, that opportunity to be the first approved treatment in second line, that window is still there, and that's the window that we are looking to move into. And as I mentioned, sort of the market that we've estimated previously, if anything, we believe that, that market estimate is actually quite conservative, especially on the back of the sort of fatty liver disease development that we are seeing that, if anything, seems to be growing even faster than anticipated, even despite sort of the entry of the obesity sort of drugs that we see in the world, that doesn't seem to be sort of solving the problem with fatty liver disease. If anything, it seems to be going in somewhat different direction. So that market estimate is likely to be conservative. So we continue to move ahead. We see an opportunity to become the first sort of approved treatment in second-line liver cancer and are working diligently to find the best way forward with regards to financing and being able to execute the planned Phase IIb study. So with that, we close the call for today. Thank you, everyone, for dialing in, and have a good rest of the day.