Mendus AB (publ) (IMMU) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Mendus Investor Update Webcast. [Operator Instructions] Please be advised that today's webcast is being recorded. I would now like to hand the webcast over to your speaker today, Erik Manting, CEO. Please go ahead, sir.

Thank you, Sharon. Welcome, everybody. We published our Annual Report 2022 this morning. We will go over the highlights of that report. It's, of course, also available on our website and also the recording of this investor call will be available on our website afterwards. At the end of the call, we'll have a Q&A with the covering analysts. I'm together with our Chief Medical Officer, Jeroen Rovers; and our Chief Technology Officer, Leopold Bertea to help me address any more specific questions on either the clinical or CMC part. With that, please go to the next slide, Mario. Our disclaimer is also on the website. And please go to the next one. 2022, a breakthrough year for Mendus. First and foremost, we published the data from our ongoing Phase II trial in AML maintenance at the ASH conference at the end of last year. The data showed, not only, during the study period, that the majority of patients were still disease-free, but also we included long-term follow-up data, which showed that actually the majority of patients also remained disease-free in the long-term follow-up. So all in all, that was a very important event for the company and one that we were able to publish at the end of '22. We are expanding our so-called maintenance therapy paradigm into other disease indications and ovarian cancer is the first solid tumor indication where we have a Phase I trial ongoing which -- for which we initially published data in 2022 at the ESGO conference, but also we'll publish more data tomorrow at the AACR conference. And the initial data were positive, showing that the product is safe and that also we start to see the initial new responses in ovarian cancer patients treated with vididencel vaccine. Importantly, certainly with Leopold Bertea onboard as new Chief Technology Officer, we set out the commercial scale manufacturing process for vididencel, which means on the one side, that we have designed a new process that is optimized for scalability. And at the same time, we have also now initiated the tech transfer process to a GMP facility with our German manufacturer, Minaris. With our other clinical stage program, ilixadencel, we made progress in the preparations for our next clinical trial. We had to reposition the product from a therapeutic perspective. We had indicated GIST, gastrointestinal stromal tumors, to be our prioritized indication. We have reached out to centers in both Europe and the U.S. to provide us feedback on that indication, and we found out actually there is also a possibility to broaden in the broader group of soft tissue sarcomas. So from a clinical perspective, there are certainly grounds to pursue the program. What we have to take care of in parallel was the manufacturing of ilixadencel and to make sure that we can manufacture the product in the future, we had to make the product more robust. We also had to replace key steps in the manufacturing process. All of that took place in the course of 2022. And at the end of 2022, we were confident, and we also have replaced certain key process steps that we can manufacture the product in the future. So we are now in the process of completing the process development. But at the same time, we also do have enough material inventory to start the next clinical trial. So that program is now also ready to enter into a new stage of clinical development. And then finally, as part of our continued research, we discovered a novel method to expand so-called memory NK cells. I'll explain the relevance of that later, but it's a very exciting and first step into the field of NK cell therapies, which we believe we can do on a very good basis with already existing research and expertise in-house. Next slide, please, Mario. This is the overview of our pipeline. The ADVANCE II trial is the ongoing monotherapy trial in AML, for which we reported today at the end of last year at ASH, monotherapy data are important because they provide for the clearest clinical proof of concept. But, of course, as a next step, you have to broaden the development of the product. And in this case, we will aim to start new clinical trials whereby we focus on the current patient group treated with the vididencel product in the ADVANCE II trial, then we will expand towards the combination with oral azacitidine, which is currently approved as the first maintenance drug in AML. And we will look to combine with transplant, which is the only possible curative option at this point for AML patients. Both of those combinations are trials that we are currently preparing for. In the meantime, the ovarian cancer trial, the ALISON trial is ongoing, has reported initial readouts, and we'll continue to report additional readouts throughout the course of this year. And then switching to ilixadencel, we had completed a larger trial in renal cell carcinoma. But because of the change of the therapy landscape, that was not an indication we prioritized. There was a larger number of smaller trials carried out already with ilixadencel. And out of those trials, we believe that GIST, gastrointestinal stromal tumors, provides for the most interesting opportunity to pursue. And that is the trial we have been preparing for also in 2022. And finally, the NK cell platform is an early stage, preclinical program that we believe with a lot of potential, particularly based on the expansion of memory NK cells using our DCOne platform. Next slide, please. So what's the relevance of the indications that we've chosen? All indications represent high unmet medical need in cancer therapy. Both acute myeloid leukemia and ovarian cancer are examples of tumors that are very deadly, not because initial treatment is not successful, but particularly because the recurrence rate and also the speed of recurrence is very high. Cancer-related deaths are mostly caused by recurrence. Very often recurrent tumors are very difficult to treat. And what we try to do with vididencel is to prevent or delay tumor recurrence. And that's the basis for both indications, AML and ovarian cancer. Then in gastrointestinal stromal tumors, we are dealing with solid tumors that have established themselves, which is also why we can inject them with an intratumoral product like ilixadencel. The problem with these tumors is very often that they have become resistant to previous lines of treatment and also generally resistant to the immune system, including novel classes of drugs like checkpoint inhibitors. That is the kind of tumors whereby we believe intratumoral priming brings additional potential therapeutic benefit by making the tumor again or for the first time, more susceptible to the immune system. And this is a setting that we have prioritized with ilixadencel with the potential to broaden the indications that we approach with ilixadencel as next steps. Next slide, please. Next slide, we switch to the clinical relevance of vididencel and AML. Yes, this is the one. This points out why MRD or measurable residual disease is such an important element of AML treatment. Initial treatment with AML is preferably done by high-dose chemotherapy, which brings patients in what's called the first clinical or complete remission, but very often, patients still suffer from residual cancer cells that are circulating and will cause disease to come back very quickly. And that is called MRD or measurable residual disease. And what you see in the left-hand graph is how big the difference is between patients that have been qualified as MRD-positive versus the ones that are at least not on a detectable level suffering from circulating cancer cells. When there is an MRD-positive status, recurrence is often within a couple of months. And certainly, within the first year, it can be very rapid. So that requires so-called maintenance therapy aimed at stabilizing patients basically so that they have a longer period of disease-free survival. Another very important element, which is pointed out by Professor Dr. Platzbecker, who is part of our clinical network is that, maintenance treatments have to be safe. So once the patient has undergone high-dose chemotherapy, the most important feature of a maintenance therapy is to make the patient more healthy and not, let's say, provide for treatments that are even more toxic and that will, in the end, lead to a further deterioration of the patient's health. Next slide, please. This is the current only available AML maintenance drug, oral azacitidine. These are the data from the pivotal trial that led in the end to registration of the product. And what you see on the right-hand side of this graph is the effect of so-called oral azacitidine on -- in this case, overall and disease-free survival. And if we focus on the panel on the bottom right, you see the relapse-free or disease-free survival in MRD-positive patients. And what you see is that, when patients are treated with placebo, it's a very poor median relapse-free survival of 2.7 months. With azacitidine, this shifts to roughly 7 months, but again, with most patients falling ill very quickly. So this really means that there is a need to address MRD, but also a lot of room for improvement in AML maintenance. Please go to the next slide, Mario. This is a summary of the data we presented at ASH last December. Again, it's a monotherapy trial. So in this case, we started the trial when oral azacitidine have not yet been approved. We could do a monotherapy trial just applying vididencel in the form of 6 intradermal vaccinations as a treatment to patients, which have achieved first complete remission, but were still suffering from MRD. And what was interesting was that, not only after the active 70-week study period, the majority of patients were still alive. But when we were [Technical Difficulty] ranging from 16 to 47 months. It was clear that actually also the majority of patients remain disease-free after the initial treatment success. That means that this treatment has the potential to, not only deliver a relatively safe solution for AML patients, but also that it has the potential to lead to durable responses. And that is, we believe, a very strong starting point to further develop this drug as an AML maintenance treatment. Next slide, please. This is an overview of the current AML therapy landscape. It divides roughly 50-50 into patients that are so-called chemo-fit, so they're eligible for high-dose chemotherapy. This is the patient population we currently treated in the vididencel, the ADVANCE II trial that we just described. What we want to do as a next step is focus on either the patients that are not eligible for a transplant and are nowadays eligible for oral azacitidine and those patients that are eligible for transplant, which is a hematopoietic stem cell transplantation or HSCT, which is #2 in this diagram. Then if we shift to the right-hand side, these are the chemo unfit patients. Until recently the [Technical Difficulty] in this patient population [Technical Difficulty] a specific drug called venetoclax has made a significant change, and that is now resulting in combination with azacitidine to more patients achieving complete remission, and we believe also a growing patient population eligible for maintenance therapy. We go to the next slide. Can we go to the next slide, Mario? Thank you. This is preclinical work showing that the vididencel vaccination is synergistic with azacitidine and with venetoclax. So this provides for a good basis to move forward in the setting that we just described, including also maybe at a later stage as compared to the initial 2 trials we want to prepare for in the [ aza ], venetoclax patient population. Next slide, please. So these are the 3 patient columns that we just described. First, the combination with oral azacitidine is a very logical one to test. It's exactly the patient population. We treat it as a monotherapy treatment in the ADVANCE II trial, but then in combination with oral azacitidine as a new approved drug. The second setting is to treat patients after transplant. MRD is also a factor in transplant that is leading to very fast recurrence and actually also the main reason for transplant failure is recurrence. So that's a patient population, which is currently also underserved and has no real treatment options in the post-transplant setting. So these are the first earmarked trials that we will prepare for. And then as stated before, we believe that the new azacitidine, venetoclax combination leading to more patients achieving complete remission in the chemo unfit patient population will also result in a growing new patient population requiring maintenance therapy, and that is something we keep a close eye on and which we believe will, in the longer term, also be an interesting patient population to address. So to summarize, the advanced 2 monotherapy data very importantly proof-of-concept end of last year, but also set the stage for broader development of vididencel as a novel modality for AML maintenance treatment. Next slide, please. Great. This is the summary of the positioning of vididencel in ovarian cancer. So with ovarian cancer, the situation is similar to AML in the sense that initial treatment, in this case, chemotherapy combined with surgery leads to initial clinical success, but then recurrence is very fast, and it's also more and more poorly responding to existing or previous lines of therapy. So to delay or prevent recurrence after first clinical remission is also in ovarian cancer, a very important potential new way as a maintenance treatment to have these patients live longer disease-free periods. That was the current setting in which we are testing vididencel. Maybe going to the next slide. Again, it's a series of 6 vaccinations after initial treatment with chemotherapy and surgery. We have reported initial positive mainly safety data at the European Society of Gynaecological Oncology Conference in June of 2022, and we will present additional data, including also immunomonitoring data that test the potential of vididencel to trigger relevant immune responses in ovarian cancer patients at the AACR conference tomorrow. Next slide, please. Then shifting to ilixadencel. Next slide, please. Ilixadencel is a product with a longer history. We have tested it in the largest setting in renal cell carcinoma and then in multiple trials in other disease indications. We have earmarked GIST, gastrointestinal stromal tumors, as a prioritized indication, including also the broader group of soft tissue sarcomas. In 2022, we had multiple updates around the ilixadencel. CMC was a very important part of it, which we prepared in parallel to the clinical trial preparations. We are now more confident that we can manufacture ilixadencel also for future clinical development and in the end, commercialization. Further updates in 2022 where the completion of the so-called ILIAD trial, which was a trial in combination with pembrolizumab, the biggest selling immune checkpoint inhibitor, anti-PD-1 checkpoint inhibitor. We also published data on the combination of ilixadencel with anti-CTLA-4 inhibitors, which is another dominant class of immune checkpoint inhibitors. This was a preclinical study, which supports actually the synergy between anti-CTLA-4 therapies and ilixadencel. And finally, we also published data of the renal cell carcinoma trial, the MERECA trial in a peer-reviewed journal in the course of 2022. Maybe next slide. This is the rationale to go after GIST, gastrointestinal stromal tumors. GIST is treated with so-called tyrosine kinase inhibitors. And after first-line failure, there's very little response to other lines of treatment. And what we saw in this group of 6 patients, whilst there are 2 patients that were highly refractory to previous lines of treatment, started responding again with the clinical response after the administration of ilixadencel. This is the basis to explore ilixadencel and GIST and potentially other soft tissue sarcomas. We believe we can do a good clinical trial in this setting and hopefully, it will confirm the clinical efficacy of ilixadencel. And that is our main goal with this program in the short term. Next slide, please. That is about the NK cell platform, which we described end of last year, we presented these data at the SITC conference, the Society for Immunotherapy of Cancer conference, a large conference in the U.S. What we have discovered is that, by using our know-how and technology platform, we can expand NK cells. NK cells have always been an essential part of the motivation of our products. But I think this is also a good example of how our technology and know-how expands beyond dendritic cell biology. But what we do in this case is, we look into the expansion of so-called memory NK cells when we mix dendritic cells derived from the DCOne cell line. This is a proprietary cell line. This type of product is also the basis of our therapy vididencel, which we are currently developing. But when we use similar cells in a setting whereby we look into white blood cells, in this case of healthy donors, we saw a very interesting phenomenon. On the left-hand side, you see the expansion of the total NK cell population. And this looks good but maybe not very impressive. What was a surprise was that, specifically memory NK cells, which are so-called NKG2C, CD57-positive cells for the cells. And on the right-hand panel, that was a very significant expansion. And this means that we can make therapeutic quantities of these specific memory NK cells. And the reason they are relevant is that, they are associated with previous infections, actually, particularly with CMV infections. But what was known for a long time already was that these infections seem to correlate with improved survival benefit in particularly [ blockpoint ] tumors, and that related specifically to memory NK cells. So it looks like the memory NK cells have been trained by previous events, but then also form a very important first line of events against cancers. They have all kinds of properties that make them very attractive from a therapeutic perspective and that ranges from improved metabolic fitness to better individual persistence and better tumor cell killing and also to a certain extent, resistance to the immunosuppressive tumor microenvironment. So this type of cells was much sought after. We believe that we have a potential best-in-class expansion platform. And if we go to the next slide, that shows how we want to apply this in therapeutic setting. So either we work with patient-derived memory NK cells, and we combine them with antibodies. But what we can also do is in the transplant setting, which is very relevant in blockpoint tumors that we make these cells from the donor and that we actually add them to the patient either alone or in combination with antibody to improve survival post transplant. So we believe we have a very attractive new platform in the NK cell therapy landscape, and this will allow us to develop this as a new pipeline program. So to finish it up, maybe go to the conclusion slide, Mario. Next one. So for the outlook for 2023 and the upcoming milestones, very importantly, the monotherapy data from the ADVANCE II trial will allow us to broaden the development of vididencel as an AML maintenance therapy. We have reported first positive data of the ovarian cancer trial, the ALISON trial, and we will continue to report data from that trial. Ilixadencel is now ready to move forward in GIST and potentially additional indications, and we will focus on developing the new pipeline program based on memory NK cells. On the clinical pipeline, main updates will come from the start of new trials and from pipeline updates from the ongoing trials, ALISON and ADVANCE II throughout the course of this year. With that, maybe the next slide, Mario. I would like to thank you on behalf of the entire management team and Board of Mendus, and we look forward to the Q&A. So maybe if we go to the next slide. We would like to open up the Q&A for the covering analysts. Before we do that, I want to make a few remarks about questions that have reached us via the IR e-mail address. First of all, we always read these questions, and we appreciate the active engagement of all of our investors. We are not always able to answer all of those questions certainly when they are very detailed about our strategy or individual programs. I think you must appreciate that as a public company, we only do that in public settings and in line with our public communication. But your interest and also sometimes specific suggestions we're getting are highly appreciated. We got a lot of questions about the financing we concluded with Negma, and particularly because there was such a large number of press releases. On the one hand, we are happy with the financing. It was done in combination with the loans we secured from Van Herk Investments, our largest investor. At the same time, we have to disclose each time when the conversion was done. So yes, we're sorry, but it was really needed from, let's say, the regulatory perspective to send out all these press releases. But at the same time, the combined financing of Negma and Van Herk did allow us to reach the data we presented last December. So in that sense, I think we have clearly secured longer-term financing. The money is there to help the company reach that data point. And from now on, I think, first of all, it's important to state that the financing is at our discretion, so we can use it when we want. We have bought back because we thought the costs were getting too high for the conversions, the remainder. So there's currently no outstanding bonds with Negma. But the money is there, and it is available to us when we need it. But again, it's at our discretion, and we will always look as a company for all alternative sources of financing, including partnering efforts, for example. So in that sense, I think we are happy with where we are today. Again, 2022 was an important year for Mendus. And from now on, we will focus on progressing our clinical trial, pipeline and also the attractive NK cell program. With that, I'd like to hand it over to the moderator to collect the questions from the analysts.

[Operator Instructions] We will now go to your first question. One moment, please. And your first question comes from the line of Luisa Morgado from Van Lanschot Kempen.

This is Luisa dialing in for Suzanne from Van Lanschot Kempen. I wanted to ask a couple of them. So first, regarding AACR tomorrow. So you are going to have some data presentation. And I was wondering, could you remind us or give a bit more color on the data that you presented last year. And what can we expect this time for the updated dataset in terms of patients, follow-up metrics and other aspects to it?

Thank you, Luisa. I'll hand this question over to our Chief Medical Officer, Jeroen Rovers.

Yes. I think -- so compared to the data we presented at the ESGO last year, which, at that time, just purely focused on the safety of the administrations we had done in the small set of patients, which was recruited at that time. Now we are able to also show the analysis we've done in the first set of patients on the T cell responses. And so, the primary endpoint here of the study is, of course, to look whether we are able to trigger, say, specific T cell responses against the tumor-associated antigens, which are present in vididencel, and that wasn't available last year. So that's why we will be presented at AACR. Specific details on the number of patients, et cetera, will be released tomorrow once the poster will be tomorrow or probably it's going to be the day after because it's the U.S. conference once the poster has been shown there.

It looks like we have lost Luisa's line, and I will go to the next question. One moment, please. And your next question comes from the line of Soo Romanoff from Edison Group.

Thank you for the update. When can we expect to hear any updates on the new studies in AML in this fiscal year?

Yes, of course, that's all dependent on how we move forward. We are currently preparing for these trials and the exact start date of these trials, we cannot disclose today, but I can assure you that we're doing everything to move forward as quickly as possible. Yes. But let's say, throughout the course of this year, we'll update the market on the start of new trials.

Great. As far as the optimization of the ilixadencel manufacturing process, I think those key operational achievements for the company have -- you've kind of achieved those. Could you describe how these improvements may set you up for the progress in this program?

Yes. Well, I think, generally speaking, then I will hand it over to Leopold to answer in more detail. Generally speaking, for us, this was a major milestone, too, because, on the one hand, to prepare for next clinical trial is something that we always do diligently and with input from key experts in the field. But at the same time, the manufacturing part has to be taken care of as well. And we were, throughout the course of last year, not 100% certain if we could manufacture the product for, let's say, future clinical trials and commercialization. The fact that we have been able to make important process improvements also led us to decide in the end to move forward with the program. It could have also ended differently in all fairness. If we would have not been able to make the process more robust and to replace key steps, we would have been in a different situation. But luckily, we were able to make those changes and also to secure very importantly, additional shelf life for our current inventory. Leopold, do you want to add anything more specific to my summary?

Yes. Thank you, Erik. So you actually said the most important things. Indeed, what we did was a very key step at the beginning of the process, which we replaced and made this step much more robust for the selection of sales at the beginning. And then very importantly, we were able to extend the shelf life of the starting material and also the shelf life of the product. So all in all, we made this process much more robust, and we are finalizing certain steps to make it ready for tech transfer to a producing site later this year.

Thanks, Leo. Does that answer your question?

Yes. If I could ask one more question? It was nice to really hear about your NK cells. How far in advance are we in the preclinical development?

Well, I would say it's a promising start. And the whole field of NK cell biology is actually just starting up. There have been a lot of efforts to try to make these cells from other sources than donor material, our patient material, including, for example, induce [ hematopoietic ] stem cells or cord blood. We see that this memory NK cells that you get from regular white blood cells have been the ones that have been most clearly associated with clinical benefit and actually also with all kinds of characteristics that I described, which makes them very potent cells. So we believe we have a competitive product. That's, I think, a very important element and why we are also now more explicit about this becoming a new pipeline program. Of course, to make it ready for clinical development will take at least another 18 months or so. So we should also be realistic. It is an early stage program. We will first focus on our clinical stage programs to move them forward in the clinic. But having said that, it looks like a very competitive way to enter the field of NK cell biology.

Thank you so much for all the updates.

I know it's early at your end of the world. So thanks for joining.

[Operator Instructions] I would now go to the next question, one moment. And the question comes from the line of Luisa Morgado, Van Lanschot Kempen.

Sorry, earlier I was disconnected for some reason. But I wanted to ask a second question. And this one, could you provide a bit more details on your cash runway? And which clinical development plans this cash runway include or exclude in that projection?

Sure. Thanks, Luisa. So on paper, we have secured quite a long cash runway with the combination of Van Herk and Negma. So historically, we have been burning around EUR1 million or SEK10 million per month. So on paper, added the SEK250 million that we secured should give us around 2 years of cash runway. Now, having said that, that's not money in the bank. So for clinical trials, for tech transfer of commercial scale manufacturing, we need more money on the bank, and we are, of course, looking into ways to secure that. And that can be through financing, it can be through partnering. We keep all options open there. And as you may appreciate, we cannot provide you with more detail. But like I said also earlier, the Negma financing or the loans from Van Herk do not exclude us to find other sources of financing. So we keep all options open on that front.

We will now go to our next question. One moment, please. And the next question comes from the line of Christian Binder from Redeye.

Most of my questions were already answered. But can you just elaborate a little bit more on your current chance of prospects of raising [ undiluted ] funding, for example, partnering? I mean you already mentioned it, but more broadly, what's your strategy around partnering? And are you, so to speak, actively seeking it out? Or is it more like an opportunity in case you get approached?

Thanks, Christian. Well, we have included also in the annual report, some pages on vision, mission and strategy, including also our partnering strategy. And to repeat what's in the annual report, we are always looking for partnering opportunities, but we will also always weigh them against the cost of [ coverage ] partnering, right, because you will always give up future value in such an effort. Secondly, you have to be ready for it, okay? With ilixadencel, I believe we have the kind of a reset of the program, and we needed to fix the manufacturing, but also we repositioned the program with respect to its therapeutic positioning. Both elements are very important. So certainly, when you are not certain what the manufacturing process will be in the future, you are not in a good position for partnering, okay? So I think we have improved, not only the overall positioning of the program, but also the possibility to partner in whatever form with that program. Vididencel, I think the most important element was the survival readout we presented last December. And we had some initial positive data in May around the MRD conversions that we started to see, but that can be translating into survival benefit or not. We have been seeing in our trial, at least a very good correlation between MRD conversions and survival. But it's not a complete black and white picture. We've seen a broader survival benefit beyond the patients that converted their MRD status. So in other words, the data we presented in December, which were the real survival data, including also long-term survival, they, of course, put us now in a completely different position with that program. But also there, you need to take care of what you can take care of yourself first, which is to make sure you'll have future commercial scale manufacturing, but also that you know what to do with the next clinical trials. And then, of course, we keep a good finger on the [ polls ] with the broader industry, including also big pharma to see if there is a possibility to partner and what would be the best moment to do so.

[Operator Instructions] There are currently no further questions. I will hand the call back for closing remarks.

Well, thank you all for joining this call. Please read our annual report. I think it reads nicely, at least we've tried to incorporate also some additional information and some interviews with Alex, our CSO and myself. So I hope you enjoy reading it, but thanks for now and looking forward to talking to you on the next event.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.