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

[Audio Gap] 2026 reports presentation. We will begin with the presentation from the company speakers, CEO, Dr. Erik Manting; and CFO, Lotta Ferm. [Operator Instructions] I will now hand over to CEO, Dr. Erik Manting. Please go ahead.

Thank you, and welcome, everybody, on behalf of myself and Lotta.

Hello, everyone. Nice to meet you.

Thanks for joining Mendus' financial and business update over the second quarter of 2026. It was a very busy quarter with -- in which the clinical development gained a lot of momentum. We have reached the final stage of the ADVANCE-II trial. The long-term follow-up of the trial is officially concluding when the last patient has reached the 5-year mark, and we're happy to disclose that, that has happened. So it means also that the majority of patients has actually reached 5-year survival. And we're, of course, very happy with that outcome. The trial, which is ongoing in Australia called AML22-CADENCE has picked up momentum and has now reached the 20-patient enrollment milestone that we were aiming for by mid of this year, allowing us for an initial readout. And we have finished preparations for the DIVA trial, which is combining our product with less intensive first-line treatment of AML, and that trial is ready to start subject to final ethics committee approval. We have decided to look into children's AML. And the reason is that we believe we have a good basis on our adult AML program and the safety profile of the product also matches that setting. And so we have started preparing and particularly also with U.S. clinical centers, potential expansion toward the pediatric setting. We have started our CML program, and we have successfully enrolled the first stage of the Phase I trial called VITAL-CML in patients with suboptimal responses against current standard of care with TKIs and that also allows us to do, as planned, a first readout in the second half of 2026. Because we have made that progress, we have also initiated preparations for the VITAL-TFR2 trial, which is a Phase II trial in combination with SAHMRI, which is a well-respected Australian research institute, and this trial will be led by very prominent Australian researchers. So it will be subject to the initial readout from the VITAL-CML trial, but since we have successfully recruited the first stage, we believe it was also good to already start the preparations for the TFR2 trial so that we are in a position to start that trial later this year. The Clinical Advisory Board that has supported our clinical strategy is a group of very well-respected international experts. So we're very happy with the fact that they have supported us with expert advice on the updated clinical strategy. And also very importantly, recently, there was an initiation of coverage by a U.S. analyst from the investment bank Lucid Capital Market, which is a well-respected investment bank in the U.S. And this is, of course, an important step to increase our visibility towards U.S. investors. I would like to hand it over to Lotta for the summary of the financial situation.

Hi, everyone. And for the quarter, the cost level was SEK 20.5 million compared to SEK 24.1 million last year for the same period. The main reason for the lower cost is that we did -- we made a big reorganization last year, so we let go of personnel. So we are more slimmed down organization right now. And we focus on the clinical trials and to take them forward. The cash position at the end of the quarter was SEK 59.9 million, and that will take us into the first quarter of 2027.

Thanks for that. So the clinical pipeline, in summary, positions our product across first-line treatment in AML, in adult AML that comprises the chemotherapy setting, but also the less intensive first-line setting, which is called Ven-Aza or Venetoclax plus azacitidine. But also, like I said, we have started preparations for a pediatric program. Those trials will guide us in the data that they produce towards the optimal path to market. Then in CML, as I mentioned, we have started preparing for 2 separate trials, of which 1 is now ongoing, and the second trial will be starting subject to the initial positive safety readout of the Phase I VITAL-CML trial. So that program is now on track. Again, very happy that such imminent experts in the field from the U.S., from Australia, from Europe have joined our clinical advisory board and have been able to provide us with the advice that we needed to set out the clinical strategy that I just described. And also, it's good to see that there is growing momentum in the industry around AML and CML. In both diseases, as I will explain, there is still high unmet medical need. AML is still largely unresolved disease with a very poor 5-year outcome. So the fact that there is now increasing activity in the form of financings, in the form of M&A or partnerships in both areas, AML and CML, creates good momentum, and we feel that we are uniquely positioned in that competitive landscape. And also very relevant, yesterday, there was a major breakthrough in the development of cancer vaccines and that validated one of the essential parts of our strategy that we have always advocated, which is that these kind of therapies whereby you train the immune system against cancer cells work best if you apply them in a setting where you want to prevent recurrence. In this case, this was a vaccine co-developed by Moderna and Merck in solid tumors, but of course, we have our own approach that specifically focuses on blood cancers. Now what's the rationale to apply immunotherapy and specifically our lead product vididencel in myeloid blood cancers. The unmet need is different in AML and CML, but the principle is the same. You want to train the immune system to have a durable control over residual cancer cells. In AML, that mostly translates into survival because the relapse rates in AML are high and relapse is almost always associated with death. In CML, that's a different story. There is a group of drugs called tyrosine kinase inhibitors, or TKIs, that successfully suppresses the disease, but you have to take these drugs for the rest of your life. And that is, of course, a big burden, not only for the patient, for the adherence, the toxicity and everything else that is associated with chronic drug use, but also for the health care system and the costs associated with that. So the ultimate goal in the treatment of CML is considered treatment-free remission where we create conditions in which patients can safely stop their TKIs without the risk of their disease coming back. We know immunotherapy can be curative in these myeloid blood cancers and the main reason for that is allogeneic stem cell transplant, or in the past, also call bone marrow transplant. It specifically relates to a mismatch between the immune system and the cancer cells, so only the allogeneic stem cell transplants are curative, so they have to come from a donor immune system. But as you can imagine, transplant a foreign immune system in the body has a lot of side effects. Actually, there is around 20% transplant-related mortality. And also there are significant morbidity particularly related to a phenomenon called graft-versus-host disease, but the new immune system actually also attacks the healthy tissues in the body. But we know that the so-called graft-versus-leukemia effect, is curative, both in AML and CML. Other immunotherapies have not been very successful. So interferon, which is an immune modulator, is a very complicated drug and has not delivered consistent success, and immune checkpoint inhibitors that have been very successful across solid tumors do not work and have not delivered clinical benefit in myeloid blood cancer. So this leaves for us a unique positioning to address the prevention of recurrence and to establish long-term durable remissions of disease with a product that is safe. So one of the key elements of our product is that it has a good safety profile, so we can apply it across these myeloid blood cancers when the disease burden is low and when the initial treatment has been successful. So that defines our positioning. In AML, as I mentioned, the main focus is to prevent recurrence. So the positioning of the product is when first-line treatment has successfully accomplished a remission. And this is where the residual cancer cells can cause a recurrence or relapse. And of course, you can't continue to treat small levels of disease with very toxic therapy. So this is why we want to train the immune system to help control the disease over longer periods of time. The ADVANCE-II trial is a trial that we started in this setting, and we started in patients that had levels of disease that were detectable. So this is called measurable residual disease. These patients have a relatively poor prognosis because of the presence of disease and also in this specific setting, patients were not scheduled for transplant for different reasons, sometimes there was no donor, sometimes patients were not fit enough to undergo transplant. So this was an alternative to see if we could accomplish, first of all, a potential effect on the MRD, which we documented early on in the trial. We also showed that the immune response is triggered by the product were associated with these MRD responses, but of course, very importantly, we started to see what we were looking for, which is durable survival benefit. So the majority of patients in this trial, it was 20 patients that entered the trial, 14 of those patients became long-term survivors and 13 patients are still alive today. And as I mentioned, the last patient that was still in long-term follow-up has passed the 5-year mark. So we are now going to close this trial. We are, of course, very happy with this outcome, which we also see as validating for the concept that we're after, which is to train the immune system to control residual disease leading to durable survival benefit. Now how are we going to take this program forward? We are currently positioned in the chemotherapy setting or the high-intensity chemotherapy setting, so AML patients that have a relatively good fitness are eligible for high-intensity chemotherapy. And after that, they either get a transplant or they are in a very high risk of relapse. Again, we treated patients that were not scheduled for transplant for different reasons. And that is the setting that we continue to work in with 2 trials, the ADVANCE-II trial that we are now going to close and the CADENCE trial, which is ongoing in Australia. The other interesting part is that the effect of first-line treatment for those patients that are deemed not fit for chemotherapy has tremendously improved due to a new drug called Venetoclax. And Venetoclax is dramatically changing the AML landscape. It has led to much more successful complete remissions in patients unfit for chemotherapy, but also more and more clinical data come to the surface demonstrating that actually also for fit patients, the treatment with Venetoclax combined with azacitidine could be beneficial because it results in better event-free survival in the first year. It results in less hospitalizations, less infections. But still, the overall survival, the long-term survival will be dependent on treatments that are basically effective after the first complete remission has been accomplished. So that's why we also want to combine with this specific combination of Venetoclax and azacitidine so that we can capture the broader first-line setting in AML. The CADENCE trial is ongoing in Australia and the principal investigator is one of the world-leading KOLs called Andrew Wei. This trial has now recruited the first 20 patients. The trial is designed actually as a first 40-patient safety trial and then with the possibility to expand it into a larger trial up to 100 patients. We have now achieved the first 20-patient enrollment, and there were no product-related serious adverse events. So this is a very important initial outcome, but also if we combine our product with oral azacitidine, it still maintains its very strong safety profile. And of course, now also, we have collected samples during the trial, so we can start looking into correlative studies that, for example, look into the immune system, look at the levels of residual disease. And this is a setting that we will further investigate and that will add to the data package that we have accumulated from the ADVANCE-II trial. Now then going to the other setting, the Venetoclax plus azacitidine setting, this is a trial called DIVA that we have now prepared. We are awaiting final sign-off of the Ethics Committee approval, and then we can start the trial in the third quarter of 2026 based on the assumption that there will be a positive decision by the Ethics Committee. And that is a very significant trial because it will significantly broaden the positioning of the product in the first-line treatment landscape of AML. So we hope to announce the start of this trial soon, and we are ready to engage in it. For the pediatric program, we have thought through how we can use the data that we have collected in the adult trials, specifically, of course, the long-term survival benefit, combined with a strong safety profile, to see if this can be a benefit for children diagnosed with AML. This will also be an expansion towards the U.S. So the trials that we are now preparing for will both be in the U.S. with one trial potentially also expanding into Europe. And they will focus first on the second complete remission setting, so where children have had a relapse, but have successfully been brought into remission the second time. And we are also planning for a trial in the first complete remission setting, which will be very similar to the setting that we have tested in adult AML in the CADENCE trial and in the ADVANCE-II trial. So this adds up to a pipeline that will deliver multiple milestones. Very importantly, the DIVA trial, when it starts, will, we expect, recruit relatively quickly and will allow us for an initial readout in the first quarter of next year and then an initial readout on all 24 patients that we plan to enroll in this trial in the third quarter of next year. So this will be an important validating step to show that we can combine our products safely and effectively with Venetoclax plus azacitidine. This trial, because it's the first time we administered the product in this setting, will be focusing on MRD-positive patients because that will also allow us to pick up the initial safety signals -- or sorry, the initial efficacy signals based on potential changes in the MRD levels. And then the pediatric trial, as I explained, is in preparation, and we hope to start that program in the first half of next year and basically address second-line first and then the first-line setting as a next step in potentially expanding our product towards pediatric AML. In CML, the numbers are a lot bigger than in AML when we talk about the patients affected by CML. Patients with CML are now well under control with tyrosine kinase inhibitors. The disease is well under control with tyrosine kinase inhibitors. But as I explained, the real challenge now is to see if we can find conditions to allow more patients to stop their TKIs. So in the past, CML was very deadly disease like AML and the only curative approach was allogeneic stem cell transplant. Today, we have growing number of TKIs, and actually also, there has been quite some innovation recently in finding stronger binding and more specific TKIs to suppress the disease. But the future, again, is to see if we can find conditions to allow more patients to stop with chronic use of therapy. The 2 main hurdles to accomplish that goal are, first of all, according to the guidelines, only patients with what's called a deep molecular response or with an optimal response to TKI over multiple years are eligible to try and stop their TKIs. Now this is a setting that for most patients is not accomplished because they simply never reach these optimal responses to TKI. So they will never become TFR eligible. The second big hurdle in CML is once patients are TFR eligible and they can stop their TKIs, actually, in half of the patients, disease shows rising levels already in the first 6 months and then patients can be safely put back on their original TKI or next TKI. But of course, that is a TFR failure and patients, again, have to see if they can find conditions under which they can stop their TKIs. This is a setting where we believe the training of the immune system may allow more patients to experience a successful TFR. The trial, which is now ongoing is called VITAL-CML. It's a Phase I trial in Bergen, Norway, under the watch of Professor Bjorn Gjertsen, and we're very happy with his dedication. He was also one of the largest contributors to our AML trial that I just discussed, the ADVANCE-II. But also, of course, we're very grateful to the patients in his clinic that have participated in this trial and allowed us to recruit the first 8 patients safety, tolerability stage of the trial so efficiently before the summer, which will allow us to have an initial readout after the summer. And the trial is continuing to recruit. We are now at 10 patients, and we expect that this trial will continue to recruit up to 24 patients. And that will also, of course, lead to a next readout in the middle of next year for all of the patients that we treated in this trial. Very importantly, the initial 8-patient safety, tolerability data are also supporting the start of the VITAL-TFR2 trial, which is a trial that we will do in Australia with one of the world leading KOLs, specifically focused on TFR, a professor called Timothy Hughes, and that is a trial that will be in the South of Australia in Adelaide with multiple centers involved. But the start of the trial is subject to a successful initial safety readout of the VITAL-CML trial. Both trials will continue to deliver data, and specifically mid next year, we expect to have data from both trials that will validate the positioning of vididencel in CML and in both patient population. So both the patients that have a suboptimal response to TKIs where we can help more patients accomplish those deep molecular responses that we are looking for. And secondly, the patients that have accomplished a successful deep molecular response, but that, of course, once they stop their TKIs, want to see better outcomes of their TFR attempt. The reason this trial is called TFR2 is that the TFR failure rates due to relapse are even higher in the second setting. So when patients had an earlier failed TFR attempt, the relapse rates are generally higher in the second TFR attempt. So this is a patient population we feel that will benefit most from our therapy, but of course, also as a first step towards the broader TFR setting. With the momentum we have now created in the clinical pipeline, we expect a steady cadence of readouts for the next 6 to 12 months, and that will validate not only the positioning of vididencel in AML, but also the expanding positioning in AML to include the less intensive first-line treatment, and of course, the expansion of this program towards CML with an active CML program focusing on both the suboptimal responders and the actual TFR challenge that we want to address in that setting. The ambition of the company is to continue to grow both with trials, but also with our international presence. We have established a network of centers and collaborators across the world. Our trials have always been in multiple centers throughout Europe and now also, of course, in Australia. But now also, we have a clear plan to expand towards the U.S. And of course, we're also very happy that the visibility of what we are doing is picked up more and more, both by the clinical community and now also with the U.S. analyst coverage that will expose us much more to U.S. investors. So with that, I would like to thank you for your attention and open the session for Q&A.

[Operator Instructions] The first question comes from Chien-Hsun Lee at Pareto Securities.

So a quick question from me. So regarding the CADENCE trial, for the initial readout, what would you consider as meaningful apart from safety? And also is the trial still tracking towards the larger 100-patient efficacy stage? And will that stage be separately funded or is contingent on this readout?

Thanks for joining, Chien, and thanks for your question. So let me take it in 2 parts. First of all, when you're in the early stage of a trial, what you want to see is initial signs of efficacy. And as you may remember also from the ADVANCE-II trial, one of the first things you start looking for is whether the immune system responds to the treatment. And of course, you want to see if you can correlate that to outcomes that are indicative of efficacy. Initially, you can't link that to the long-term survival that we have now brought to the surface in the ADVANCE-II trial, so we'll look for MRD responses, for example, which means that the levels of disease may be varying. The technical part that is important to remember is that this trial is not focusing on MRD-positive patients. So the ADVANCE-II trial was specifically focused on MRD-positive patients. This trial incorporates the broader patient population independent of MRD. And the reason is that, that's the end goal that we have in mind. And also MRD-negative patients do have residual cancer cells. So it's not that because you can't detect them, they are not there. So we don't want to exclude or, on a positive basis, include only MRD-positive patients. And also the insights and what actually defines MRD and also meaningful MRD has shifted dramatically in the last years. So our molecular methods to measure MRD and specifically also mutations associated with AML that, for example, can be treated with specific targeted compounds has been -- there's been an immense evolution in, let's say, our understanding of MRD and also the way MRD is used in clinical practice. So instead of looking just at MRD-positive patients and seeing if they can turn MRD-negative, which was the start of the ADVANCE-II trial, we are, first of all, now not excluding patients that don't have a formal MRD-positive status, and we look much more longitudinally for what happens with their MRD levels, which can go up and down. So it's not going to be such a black and white signal as we saw initially in the ADVANCE-II trial, but we're certainly trying to get as much correlative data already early out of the trial to establish what's going on, of course, with the confidence level that we have from the ADVANCE-II trial. But also to be realistic, this will be adding insights on top of the data we have accomplished from the ADVANCE-II trial, including, of course, the long-term follow-up of the ADVANCE-II trial. Then with respect to the path forward, the reason we want to keep optionality is that the first-line treatment landscape is changing so quickly. So where Venetoclax is now becoming more and more successful in the patients not eligible for high-intensity chemotherapy, there's also more and more data showing that it may also be beneficial for the patients that are chemo eligible. So first of all, we need to make sure that the product can be combined with Venetoclax because that will enormously expand our addressable patient population. But also when you think through what could be registration trial scenarios, you have to keep this in mind. So in other words, the CADENCE trial can be scaled up and it can be even beyond the 100 patients that we have now planned for into a potential registration trial or as part of a registration trial. We have also, to remind everybody of that, had a successful end of Phase II meeting with the FDA based on the ADVANCE-II trial. We have successfully established large-scale manufacturing and our manufacturing lines with NorthX. So in principle, this setting could be pushed into a registration trial. But we thought it wiser as a tactical decision to first make sure we can combine with Venetoclax and then also, at the same time, keep a close eye on how the first-line treatment landscape in AML will evolve because it could well be that Venetoclax become so dominant that the path to market is more optimal if we combine with Venetoclax. And there may even be an option that first-time treatment becomes a lot more granular that we no longer separate patients black and white into chemo-eligible and chemo-ineligible, but that there will be much more interchangeability between first-line treatment with high-intensity chemotherapy, which has been around for now 40, 50 years and is still very effective and Venetoclax may be becoming a much more dominant treatment. So we want to just be in a position to be able to combine with both settings, Chien, and on the basis of that, design an optimal path to market.

The next question comes from Richard Ramanius at Redeye.

So my first question was about your increasing activity in the U.S. How do you find the interest among investors in the U.S. and in general, in the pharma community for specifically CML?

Well, thanks, Richard. I think you more or less implied the answer in your question. But let me start with the more general remark. In the U.S., there is still the most advanced specialist investors that take part in biotech financings and also the bigger pockets of money. So at a certain point in time, it becomes logical to shift focus towards the U.S. without losing your European and, in our case, also Nordic investor bases. We will always be mindful of all of our investors. But if you move to a situation where you expand your clinical pipeline like we are now doing, it's -- you have to be there. It's impossible to not be there. right? But we also, of course, needed a basis to go there. And until now, we had a very successful recruitment of our trials in Europe. We have a very cash-efficient way of doing our trials in Australia also because we set up a daughter company in Australia called Mendus Australia that benefits from tax reductions that you get in Australia and that are actually paid back even if you're not yet a profitable company. But if you now want to step up the clinical efforts the way we want to do it, you need deeper pockets of money. So we need to be in front of U.S. investors. Of course, what helped, and this is coincidental, we have been planning for our CML program already for multiple years. We had already presented preclinical data. So the plan has been shaping up. But what was a specific trigger for more investors and specifically U.S. investors to look into CML was that there was a big takeover in the beginning of this year of a company called Terns, which has been acquired for $6.7 billion by Merck. The leading company in CML is still Novartis. And Novartis has also launched next-generation TKI called Scemblix for which they have predicted $4 billion of peak sales. So Terns who also has a similar compound was seen as a potential competitor. And now Merck, of course, is into the game after they acquired Terns. And then there was also another company called Enliven that did also a discovery of a new TKI and raised a lot of money in the U.S. So I think the playground for CML has changed dramatically. It's been, for a long time, seen as a field with very little innovation and where nothing was happening and all patients were under control. And first of all, that is not the case. So when you actually talk to doctors and talk to the patients, you find out that the statistics are very different from the daily experience and that adherence and lifelong treatment with all the side effects and also for younger patients really having a heavy impact on their lives, including not being able to raise a family, for example, is much more impactful than what you would see from clinical outcomes. So I think it's very good that there's now renewed interest for innovation in CML. And yes, I think we have a nice positioning because the next thing after these more improved TKIs will be increasing focus on TFR. So that's the more general answer I can give you, Richard. I can, of course, not comment on how individual investors perceive our story, but I just can tell you that there's growing interest in the field, and therefore, also growing interest in us. And of course, we're very happy that we now also have more direct visibility towards U.S. investors because of the analyst coverage that has started.

That's a great answer. I'm satisfied. Just one last quick question. Who funds the VITAL-TFR2 study?

That will be an investigator-sponsored trial, but it will be, to a large extent, also sponsored by us. I think you understand the principal. The VITAL-CML trial, the trial is now ongoing, is a corporate-sponsored trial. So we are formally the sponsor. But the setting in Australia with Professor Hughes is just a very well-organized setting. They've done very large trials, including also for Scemblix, for example. So they know exactly what they're doing. So we're more than happy to let them run the trial. But of course, it doesn't come without costs. So we'll have to also pay the CRO involved, which is a SAHMRI, the institute that I mentioned. But also specifically, for example, for this trial, we will also have to make new GMP material. So it's not going to be free. But of course, we're very happy with the way it's been set up and it will, again, be very cost efficient.

The next question comes from Arron Aatkar at Edison Investment Research.