N4 Pharma Plc (0GO.F) Earnings Call Transcript & Summary

Good afternoon and welcome to the N4 Pharma Plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO Nigel Theobald. Good afternoon to you.

Good afternoon, and welcome, everybody, and thank you for coming along to listen today to our webinar on our latest interim results. We're just going to give you a brief flavor of what we're doing this year. And for those -- some of those who might be new, a bit of an overview of the company and our Nuvec technology and then how it fits into our strategy into why we see this as a significant investable opportunity for everybody. So I'll hand over to Alastair first, who's just going to walk us through N4 and the Nuvec technology, and then I'll come back in and talk a little bit more about what we've been up to.

Thanks, Nigel. Hello, everyone. I'm Alastair Smith, Non-Executive Director of N4 Pharma and I'm just going to run through a couple of introductory slides and hand back to Nigel. I think it's probably useful to paint a picture of where the real value comes from and what we're doing in the Nuvec platform. And the first thing to understand if you're not familiar with the company is that we're operating in the RNA therapeutic space, and that's a very rapidly growing market it's expected to be worth about $18 billion in a couple of years' time. And the one thing to understand about that market is that the delivery capability is what is lacking. So everyone in that market faces significant challenges in delivering the drugs to the right cells, the right tissues. Now N4 Pharma's Nuvec platform is capable, and you saw an announcement from us last week is capable of targeting those RNA therapeutics to specific tissues to delivering multiple payloads with one drug and so on. And that means we have the opportunity to revolutionize the delivery of RNA therapeutics, not just for N4 Pharma itself, but by licensing the platform to others to allow third parties to use the Nuvec platform. So our focus in the near term is on monetizing the Nuvec platform in that way through partnerships and in the longer term, really driving value through our own novel RNA therapeutic platform. So we've had an extra as Nigel will take you through later on. We've had a very good reporting period at the start of this year with good positive in vivo data on our N4 101 lead program, which is an inflammatory bowel disease therapy, a dual therapy. We successfully raised funds early on in spring, and that's allowed us to really focus on building the data room to support partnering of the platform for licensing deals. So that's our current focus. Let me just -- if you can go on to the next slide, Nigel, let me go through those key benefits in a little bit more detail, those key benefits that really make Nuvec stand out against the platforms that are currently available, such as lipid nanoparticles, you may have heard of viral vectors, you may have heard of that each have their own challenges around immunogenicity and so on as well as targeting being the key one. If I was to highlight one thing, as I did on the previous slide, it really is that ability to target the RNA therapeutic, the payload of the delivery platform to target that to specific cells, tissues, organs because otherwise, you're obviously getting either a systemic dose or you're delivering it to the wrong tissues. For example, many of the delivery platforms existing now really predominantly go to the liver, and that's not necessarily what you want to achieve. So targeting the ability to modify the surface of the Nuvec particle so that it will target a specific tissue is a huge advantage, and it's difficult to do with other platforms. So I'm absolutely certain that's going to be one of the main things that potential partners are interested in, in our conversations with them. But just to run through those key benefits systematically, protection, what does that mean? That means that the payload, the RNA, which is a particularly feeble molecule, easily destroyed by enzymes and by pH changes, that, that spiky rough surface of the Nuvec particle actually endows protection on the RNA therapeutic payload, giving it some resistance to the enzymatic and pH protection, which it would otherwise suffer from. Now that means we can look at oral delivery, which simply isn't possible with other approaches. And that opens up obviously a whole new area of potential therapies, of which N4 101 is an example of an orally delivered therapy for inflammatory bowel disease, and Nigel will say a little bit more about that as we go along. The second differentiating point is that it's very straightforward to deliver more than one RNA at once. Again, N4 101 delivers an mRNA as well as an siRNA in a single drug. Now delivering in a controlled way, multiple RNAs, again, is extremely difficult with existing platforms. So that is straightforward to do with the Nuvec system. Now all of those things targeting multiple payloads, protection from breakdown, all of those obviously are extremely important, but not if you can't manufacture the end drug. If it's difficult and expensive to manufacture and not stable, then you've got a real problem. And the fourth point you'll see down there at the bottom left is that Nuvec is very straightforward to manufacture, both itself as the raw silica nanoparticle, which is the spiky structure as well as loading the RNA onto that is very straightforward. You literally just mix the RNA solution with the Nuvec particles, very stable at room temperature, which is obviously not usually the case for delivery systems and very cost effective to manufacture. So these are the ideal properties for an RNA delivery system. And this is why we strongly believe that we can revolutionize and become the platform of choice across the RNA therapeutics industry. Nigel?

Excellent. Thank you very much, Alastair. So yes, just going through this year, Alastair mentioned a few things there. So we are in a strong financial position. We have reduced our operating loss because we are spending very carefully as we go. And the fact that we raised over -- just over GBP 1.7 million in early this year, just basically has put us in a very strong cash position. So we still have GBP 1.7 million at the quarter end in June '25. But during that year, so what have we done? We've been doing some more work on our N4 101, our lead program. And as Alastair mentioned, we often had questions. So why are we looking at IBD? What are we doing with IBD? Because as a market, it's very competitive, but it's a very big market. There are lots of people using injectable antibodies at the moment, and there's JAK2 inhibitors coming along orally as a possible alternative to those. But what we've seen, we've seen 2 things. Our product, we think, is unique because it means we can actually target the TNF-alpha reduction as required, but without an injectable. And we can also make it oral, which is the JAK inhibitors, although they're oral, they are particularly offset by the fact that they end up all over the body and cause lots of off-target issues. So we believe that product has a significant clinical and commercial potential in its own right. But it also does something else for us. It showcases our technology, our platform in all its highlights. So it protects the payload. So that means we can deliver it orally. And we've shown that we can get it into the cells. And this latest work showed because it worked, we showed a good significant reduction in inflammation in our IBD model. We know it gets into the cells. We know it's protected and we know it works. We can do multiple loadings. So in this case, we've put 2 different RNA and mRNA and siRNA on there. We could put 2 different siRNA. There's various things we can do as we evolve the program, but we can put multiple products on. And very importantly, as Alastair mentioned, we're targeting it. So in this instance, we're targeting the macrophage cells with mannose ligand that's attached to Nuvec. So it's not only a clinically relevant product, it's a showcase for us. It's a proof of concept to show everybody, and that's what we can do. So what we're doing is we're building that data pack around that up. We've also done a lot of work with -- on targeting as well as the macrophage mannose targeting, we've been going through all the SRI work, and we just released this week that we've undiscovered that what the SRI work has shown is that we can target specific lung cancer cells where they will only work -- knock down those -- the target of choice in those lung cancer cells and not in the other cells. So this opens up a whole host of different opportunities in oncology. So potentially, we can combine that with oral and look at delivering a cancer treatment in an orally delivered there in the colon or in the gut somewhere. So it's a really exciting piece of work that shows that we can actually target specific cells. And we've also just announced as well that we're working with a new group up in the University of Strathclyde called CMAC. And that's headed up by a lady called Yvonne Perrie, who is a world-renowned expert in nanoparticle delivery systems, particularly in lipids. So she's going to be taking -- leading that work, taking our team through the final data package looking at how it characterizing it, where it goes in the body, how good it is endosomal release. But importantly, she's got access to the key lipid systems that other people develop, the ones that are used by Moderna and BioNTech. So we can have direct comparisons. It's been hard for us to get those direct comparisons up to now. Now that we know what Nuvec can do, and we know how it works, we need to be able to show that it works differently. So if lipids struggle to get endosomal release and they can only get 1% or 2%, and we can get a much bigger number out, we can get directly comparable data. And we'll update the market as we go, not just on what we are doing, but also why it's important. So why is each of the bits of work that we're doing important for us positioning our data and allowing us to look at collaborations. And we've also strengthened our leadership and governance team. So I'll go through a little bit more -- just again, a brief highlight of what we've done with the Board. So myself, Luke and Chris have been around for some time now on the Board. And recently, we have appointed 2 new nonexecutive directors. The first was Mike Palfreyman at the end of last year. Mike is U.S.-based. He's got a lot of expertise in the U.S. He brings significant experience of having both built, grown and exited biotech companies in the U.S.A. And we've also then brought on Alastair. And a lot of you will know Alastair is previously the leading and founding the Avacta Group, and he's got a huge number of years as a public CEO and having grown Avacta to a really strong business. And the guys have been helping us put together this new team. So we've appointed Fiona McLaughlin as our new Head of R&D, and she's got a lot of expertise in the oncology drug development area and has worked with a whole host of different biotech companies. Mark Edbrooke is a really good addition to our science team. He has got -- he was Head of RNA for AZ, GSK. So he's got a lot of expertise in working with nucleic acids. And the other thing that he also brings, he's been on the other side reviewing lots of people that have presented delivery system solutions to them, him at the time, so he can help guide us through exactly what is needed in order to make that breakthrough for a collaboration. And then to get those collaboration conversations going, we've appointed Simon Bennett as our Commercial Director. Simon has been in the industry for he's a scientist as well as a salesperson, and he has worked with a whole host of different clients in this stage from start-ups to major big pharma. Simon is out there now starting to warm up those conversations so that when our data pack is finally together, we can just present that data back to the people that we're already talking to. But also not to forget the CMC side, the chemistry manufacturing and control side. This isn't the sexy side. This is the area that you have to do, but we are doing that, and we're doing that now. Margaret has got a huge years of experience in this space. So we need to show that we can make the product, we can do it again. We can do the protocol so that when we hand information and material over to our collaborative partners, it's really easy for them to load the material, test the material and take those partnership programs forward. So a very strong team now in place, which I think allows us to move into the next phase of our strategy. And I just wanted to put where we are into the valuation curve for large pharma biotechs like us who are platform companies. So there are a lot of platform companies that have been through this curve already. And there's lots of different value inflection points as you go through that curve, as you move through and evolve from being just a pure platform company to a biotech company in your own right. So companies will start at the beginning looking at their technology, wondering how that works, going through that area, the inception phase. And then they move into the preclinical validation phase, looking at a specific area where they are presenting a particular solution, maybe a product, looking at their platform, showing exactly how it works. And that's very much where we are now with siRNA. We have had questions about why has it taken us this long to get this? So I'm going to preempt that one because this is something that people have asked in other times. We have done a lot of work previously on DNA vaccines. We had collaboration partnerships. We had a lot of data on generating an immune response. But we found that we needed to do more formulation work with our DNA vaccine formulations. And then when COVID came along and Pfizer and Moderna did something really great for the industry. They showed that the RNA therapeutic space will work, but they also showed that for a vaccine delivery, lipid nanoparticles work pretty well. So we were faced with a situation where we had -- we didn't have a stronger point of difference for vaccines versus the lipids and the others as we did with RNA therapeutics. So a few years back, we switched our strategy to focus on siRNA as the key RNA therapeutic area we want to look at. And we've been doing a lot more work specifically on siRNA. We've been doing the double loading. We've been doing the protection. We've done the oral delivery. So we're really now moving through this preclinical validation phase, and that's what we've raised the funds for at the start of this year. What we then want to do is to move out of that phase into the what we call the evolution phase. That's when you start to see collaborations happen. The platform partnering gets out there, people will take it from preclinical into clinical validation, showing that can we actually put into human beings. And then you start to see the valuations really start to grow. When that gives you the opportunity to start thinking about recapitalizing the company, looking to develop our own pipeline further and expanding products ourselves into Phase I, Phase II clinical trials. And again, the value moves up through there until finally, you move into some form of exit at $1 billion plus. And these are the sort of numbers. And we're not just making these numbers up. On our website, we've got a few case studies on there. But just sort of talk you through one here. You can look at some of the others on there or you can get them from our hub. But Dicerna, a really interesting company. They were founded back in 2017. And I'm going to use, I think, a quite harsh word that I'm going to. They just used a fatty acid modification system to deliver RNA. They started out delivering it to liver, but then they look at it evolving it to other tissues like muscle, heart and the retina. And they were able to raise significant early funds, move through their evolution phase, raising another $100 million. So in total, they raised around $115 million as long alongside some grants as well. And ultimately, just 2 years ago, they were acquired in a $1 billion deal by Novartis. So they had one lead program, which was a product targeting a very rare disease called Charcot-Marie Tooth disease. They had orphan drug status for that. But the key takeaways you can see from this is that the whole growth was just driven by their proprietary RNA platform that they call Falcon, we call ours Nuvec. Ours is not a lipid system. It's a silica-based system. But they're moving into pipeline expansion into other tissues other than the liver allowed them to expand their program and ultimately get acquired. And the reason they were acquired is because of Novartis' interest in that Falcon delivery platform. And this is a classic case study of how platform companies evolve. And as I said, there's others on there, there's [indiscernible]. There's a few other companies that we've put on our website that shows you the sort of evolution that companies go through. So we believe there's a really strong investment case in N4 Pharma. We have a proprietary RNA delivery platform that we think is transformational, and it can become the next-generation system for nanoparticle system for RNA therapeutic development. We're early -- we've validated our early proof-of-concept data. So that derisks the platform a lot and add that to all the vaccine work that we had in the past and we can show that we can deliver RNA orally. And we have shown this. We've got it into the [indiscernible] into the colon, and it's had a systemic reduction in inflammation, which has continued over a period of time. And we're looking to evolve that into further work in the future. We have an experienced leadership team. So we've got a very clear funding and partnership pathway that we're going down, and I've just talked you through that. And it's in a compelling high-growth market opportunity of RNA therapeutics, where as Alastair says, although it's a high-growth, high-value market, all people operating here need delivery systems. Every time you go to any conference, any meeting, everybody is talking about the concept of how do you deliver RNA because without the delivery system, the RNA will not work. And also, it's something this I think this is really important for retail investors. If you think back to that curve where companies are going through and getting to the sort of GBP 500 million stage and ultimately selling for GBP 1 billion plus. Typically, the VCs fund all those early stages, and that was definitely the case with Dicerna. So they will come to market around about the end of that Phase 4 when they're coming into the moving their own different pipelines of assets at quite high valuations. So retail investors just do not get the chance to get involved in the biotech companies in the early phase. They typically can only invest in them once they come to market. And then if you go from GBP 500 billion to GBP 1 billion or GBP 1.5 billion, you're looking at a 2 to 3x multiple. The retail investors can get involved with us now because we're at early stage, we're on the market, and they're taking part in the VC phase of our growth, getting significantly higher returns from those low valuations of GBP 20 million, GBP 30 million up to GBP 500 million plus. So we're delighted to be offering retail investors the chance to participate in something that only really venture capital companies get involved in. So hopefully, that gives you an overview of N4 and our strategy. And we'll just move into a few questions and answers.

That's great. Nigel, Alastair, thank you very much indeed for your presentation. [Operator Instructions] While the company take a few moments to view those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard. Nigel, Alastair, as you can see we have received a number of questions throughout today's presentation. If I may now hand back to you and kindly ask you to read out the questions were appropriate to do so and I'll pick up from you both at the end. Thank you.

Excellent. Thank you very much. So I have a couple of submitted. I'll just -- they're very similar. So one was that we said that the focus is on building a commercial data package. Is this sufficient to secure the first licensing or partnership agreement? And then Alex has also asked, what milestones have we got to reach before we can secure the first licensing or co-development partner for Nuvec? I'll just read -- so we believe that by completing that data pack that we're doing on our platform, and then presenting that to the partners, that will be sufficient interest to start getting a collaboration agreement. Whether that means they initially will invest and license that from us or they might say, look, we want to do some preliminary work. So there may be a period of collaboration where we're working together, looking at a specific area before that when they ultimately lead to a license agreement. So I honestly believe that those milestones are there. We can get some collaborations. And hopefully, that will start to get out there in early '26 when we start to get all of that data platform together. I don't know, Alastair, if you want to build on that a bit more.

Yes. Yes. I mean you've also answered the question. I would say we should really stress the point because this is not doing science for academics academic sake. This is not science for science's sake. I cannot stress how important having a comprehensive and robust commercial data room is to doing license deals. Those data have to withstand detailed due diligence. Nobody is going to commit time and cost to licensing a platform from us the Nuvec platform and undertake work themselves if they're not completely satisfied that it can deliver what they want. And there is already a wealth of data, but there isn't a comprehensive, well-organized systematic data room, and that's what we're putting the -- dotting the eyes and crossing the Ts over the coming 12 months or so. So it really is absolutely essential. We will aim to have everything we can think that we need. I can guarantee somebody asked for something that we don't have, that is always the case, but we will have everything that is necessary to be able to get deals over the line. I would just add one more thing that all of the work we're doing because we're also doing a lot of the work on N4 101, a lot of that is going to be highly relevant for our regulatory submissions in the future. So we're killing 2 birds with one stone and being as efficient as we possibly can with resources.

Thank you, Alastair. And building on from that, another question that's linked to that from Martin. What are the next specific data points or readouts investors should expect from the CMAC collaboration and on what time line?

I don't mind taking that one, Nigel, if you want.

Absolutely. Yes.

Okay. So CMAC is not CMC as well, okay? So just to make that point, a very significant -- very significant part of what we're doing is related to the CMC, the manufacturing, the process development optimization and the stability. So that -- again, just -- I know I sound like I'm a broken record. But if you're a partner and you want to explore the use of Nuvec, you absolutely have to know that there is a reproducible robust manufacturing process in place because otherwise, it's pointless doing the R&D if ultimately you can't manufacture the dam stuff. So we are putting a lot of effort into CMC, and that's out with CMAC. And CMAC is doing the -- or will do the biology, if you like, the biology R&D. So -- that's everything ranging from loading of particles with multiple RNAs and looking at the stability characterizing those. So what processes are required to control the loading of 2 or 3 RNAs onto a single Nuvec particle and how does that affect stability and so on. Target engagement is really important. So targeting and target engagement, we talked about the importance of that. We've got several examples now. Nigel has mentioned 2, the mannose targeting of macrophages and using a peptide to target non-small cell lung cancer cells with -- in our collaboration with SRI. We want to do a couple more examples that will be very relevant to what we know people are interested in from an RNA therapeutics perspective. So targeting and target engagement, that work will be done in Strathclyde with Yvvone. Then there's work packages around biodistribution, for example. We have some, but I think it's fair to say limited data describing the biodistribution of untargeted and targeted Nuvec particles. So that's another very important one. Nigel has mentioned endosomal release. So endosomal escape is, I mean, very briefly and not to go into too much of the detailed biology. Once the Nuvec particle has got into the cell, the targeted cell, it goes in as part of what's called an endosome. It doesn't matter what that is, but it goes in, in something called an endosome. And it's got to get out of that endosome in order for the RNA to then go and have its effects within the cell and cause the cell to change the protein expression in some way. And that's what's called endosomal escape or endosomal release. We know that the proportion of RNA getting into cells through lipid nanoparticles and viral vectors, the proportion that actually escape the endosome and have an effect is very low, single-digit percent. So being able to demonstrate that we get a higher level of endosomal escape, endosomal release will be very significant because it clearly reduces the amount of drug you have to give to people if more actually gets to the site of action. And then finally, the other -- you're asking specifics, I'm giving you specifics. The other big work package is further in vivo proof-of-concept efficacy data in an inflammatory bowel disease mouse model. So building on the data we already have and going further and into greater depth for our lead program, N4 101. And all of that will be done at Strathclyde and CMC will be done separately with contract partners.

Yes. And just to build on that, because that was another separate question that we were asked about what next on N4 101. So that falls very nicely. So the prework that we'll be doing will be done at the Strathclyde, and we'll be looking at, like I say, the whole formulation, making sure we get all the protocols right for doing that loading. And then we will be looking to do a larger, more extensive in vivo IBD model. And we won't be doing that in an academic institution. We'll be doing that in a full-fledged contract research organization that's got a lot of expertise in working with that preclinical model. So we'll have a full set of preclinical data showing efficacy of our product in an in vivo setting with a very -- a much larger well-tested model. So that will happen after we have completed all of the characterization work at Strathclyde. There was also another question following the talk about SRI International, what next in the steps to validate Nuvec for oncology? So as we said, we've shown that we can target specific non-small lung cancer cells. Really, what we need to do is we either need to look at different cells, and there could be a range of different cells that we look at to show that the targeting happens again and again and again or we go down into an in vivo environment showing that actually as well as targeting that we can target it in an efficacious animal model. And that's something that we're talking to SRI with at the moment about which is the right path to go down for that work. But we can begin to grow and look at that. But it could be that our team decides actually, we're looking at an area in oncology that might be more useful combining things together. So a classic example would be looking at an orally delivered oncology drug to treat a specific cancer in the gut or in the upper colon. There's a lot more work we need to do on scoping that out, but it shows the sort of potential of things that we can do, and we will be updating you more as our ideas progress and get screened. And that will be part of the early-stage work that we need to do as a company to move out of that next phase into the preclinical validation of one area into an expanded opportunity of pipeline products, albeit at earlier stage. Hopefully, that's answered those. Yes, I think how strong is the patent protection around Nuvec? Good question. We have a patent for the Nuvec system that is basically the matter of composition of the particle. And what that means, it's the shape, it's the structure, it's everything to do with that spiky mesoporous silica nanoparticle. So nobody can do a mesoporous silica nanoparticle with spikes on like that, that would be infringing the patent. What we -- that lasts into the mid- late 30s. So what we're doing is we are building on a suite of other patents around extending that protection. So we've already filed one around our IBD program. We can't say too much about that at the moment because we're in the, the non-publication stage. But when that's published, people will be able to see a lot more about that. But also when we start to partner with people, so we take Nuvec, we combine that with someone's siRNA. Maybe they're working in the field of pancreatic cancer. There will be new patents that will be able to be filed there in conjunction. There will be new patents that we can possibly file in those areas that we can then take to potential licensing partners. So we'll be building a suite of therapeutic and product-specific patents using the Nuvec platform that move beyond from just the particle itself to the particle in specific areas. And there's lots of opportunities to how we can go down there. So we have strong patent protection, but we can also build on that and make that last a lot longer. So all the other -- we've sort of answered all those questions that have been submitted. So if nobody has got any other questions that they want -- got one now. We've got another few seconds to put it in. Otherwise, we'll draw this to a close.

Just give it another 10, 20 seconds, Nigel.

Okay. So I think that will be it for the people attending. So I'll hand back to -- do a close before I hand back. Just to thank everybody again for your time to coming along and listen to our interim results. The results are now up on the website, so you can have a good read of them. As I say, please do take the opportunity to sign up to our investor hub. We put lots of information on our hub on our website on the Investors section. As I mentioned, we have put other case studies up there. We will be putting more information out to people about where to find them and to give people a reason why you should come along and invest in N4 Pharma. So hopefully, today has given you a bit of an update of where we are this year, what we've been doing and what our plans are for the next year and beyond. Thank you very much, everybody.

Thank you.

Thank you. That's great, Nigel, Alastair. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of N4 Pharma plc, we would like to thank you for attending today's presentation, and good afternoon to you all.

Thank you.