Nanoform Finland Oyj (NANOFH) Earnings Call Transcript & Summary

Good afternoon all, and a warm welcome to Nanoform's webcast presentation and Q&A session. Today is January 26, and we have today press released promising clinical results, and we will present the conclusions on this call. My name is Henri von Haartman, and I'm your Director of Investor Relations. Today, our CEO, Edward Haeggstrom, CFO, Albert Haeggstrom; General Counsel, Peter Hanninen; and Chief Commercial Officer, Christian Jones, will present to you. This presentation is webcasted through financial hearings. And after the presentation, we will hold a Q&A session, and it's possible to ask questions by calling in. Today, our CEO, will start with controlled crystallization by CESS, the clinical trial conclusions and the strategy going forward for this drug candidate. Our CFO will present the business opportunity within amorphous solid dispersions. Our General Counsel, Peter Hanninen, will present the IP position. Our Chief Commercial Officer will conclude with his views on the overall commercial impact from today's announced results. With these words, our CEO, founder, Professor Edward Haeggstrom. Please go ahead.

This is Edward. Welcome also on my behalf. So I would like to walk you through a few bullet points related to what we press released. First of all, this is the biggest news for Nanoform in its history. It's a clinical demonstration that nanoforming is a credible alternative to improve a fantastic product that currently sells for more than EUR 5 billion a year. This is a leading opportunity to get the Nanoform product onto the market. This study also validates the use of nanoforming to improve current ASD formulations on the market and in the development. These are more for spray dried assets are often manufactured either by spray drying or hot-melt extrusion, which are 2 leading technologies. There are approximately 50 ASD's products on the market and by our own estimate hundreds in the development. Therefore, we see this presented data as a further validation of our belief that nanoforming can be a new important technology in the global pharma industry. So bottom line, we are really, really happy that we have gotten this far, and we think this is a very important milestone for us as a company. Over to you, Henri.

Thank you. Albert, are you there?

Okay. I think I will continue, its Albert here with the business opportunity behind this and when I think back since the IPO and since before the IPO, our ambition has always been that and our vision has always been that. We might, on our hands, have a technology that is superior, it's greener, it's potentially superior to the best technologies out there like spray drying, hot-melt execution and so forth. During the last few years, we have been building a facility, a fantastic factory, and we have also been gathering data, both animal data and as you remember, our first clinical data in 2020 with the piroxicam study. And during these years, we have still kept our vision and dream that nanoforming could become really big. For me, this news and this study is another one of these really great moments in Nanoform's history. Where we can with pride say that we have again done something quite amazing. So we are really pleased with the results. They are really promising. And what we can clearly say is that this, again, is one step further on our vision and dream of making nanoforming big in the global pharma industry. Enzalutamide is a very big product. It's a fantastic product that saves many people's lives. It's been in the market some 10 years. And we have now been able to make what we see data showing the potential for an even better version. You would take 1 pill instead of 4 pills, and you would still have the same sort of impact on your life when you are patient. Enzalutamide is only the first case as we see it because we know that the ASDs have been a very successful way of bringing many drugs to the market. So as Edward said, there are 50 on the market, and there's probably 100 or more than 100 in the pipeline. And we see this as the sort of data that indicates that nanoforming could be an alternative to many of the ASDs in the market. Some of you analysts will certainly ask, so what's the financial impact now? It's too early to talk about the details around that. But as we all know, the pharma industry is an industry that when you have success, the financial reward is quite big. In addition to the fact that you help lots of people. With this, I'll stop and let Peter, our General Counsel, who is also very knowledgeable in intellectual property rights, continue a little bit to talk about the IP situation we are looking into. Peter, please go ahead.

Thank you, Albert. Yes, seeing this data come in is, of course, very encouraging, and it's really nanoforming as a credible development strategy to both improve current amorphous solid dispersion products, and that's the choice for APIs under development that would currently need to choose the amorphous route. Then from an IP perspective, already from the start, a key objective for the specific development program has been to leverage Nanoform's technology to create a unique IP position that enables both an improved product, which, of course, is important, but also one that is not in the scope of the originator ASD formulation patterns. And we expect that this may provide the opportunity to launch the product already after the expiry of the API patents on the product, but before the ASD formulation patents expire in 2033. And this sets also our product apart from generics based on the ASB formulation that the originator has developed. It is, of course, important that the product developed is also IP protected. We have a proprietary patent-protected process to manufacture the nanoparticles with our CESS technology. And we have filed additional patent applications for the nanoenzalutamide formulation itself. And all in all, I would say that this is a great milestone for Nanoform and all the people who have contributed with dedicated and innovative work. Christian, do you want to continue with a more commercial perspective.

Of course. Thank you, Peter. I think when we reflect on the clinical trial and what we have achieved, we set out to measure the comparative bioavailability of nanoenzalutamide, which was in a crystalline form versus the marketed product, which is Xtandi, which is in amorphous solid dispersion. We used a 160-milligram single tablet to be equivalent to 4 by 40-milligram tablets. And really, the drive is to improve the product profile. So it's more patient-centric. Patients that are suffering with diseases such as they often have to take many tablets in their daily regimen. So being able to develop a more patient-centric version for them clearly has value. Not only does -- is there a patient benefit, but there is also, as Peter quite rightly mentioned, an IP angle here. But the product itself and this is an area where we see a lot of interest from some of our pharma partners would be a lot greener. So we have a technology, the CESS technology, which is proprietary. It is a green alternative to the likes of spray drying and other amorphous solid dispersion technologies. We use recycled carbon dioxide. We don't use thousands of liters organic hydrocarbon solvents to produce the material that we produce. So not only do we have the major patient benefit, but we also have a greener product. And this will help partners to reduce their carbon footprint. And I can speak broadly for all of the customers that we engage with. We now work with 10 of the top 25 pharma companies worldwide. And all of them are interested in reducing their carbon footprint and having more sustainable technologies for their pharmaceutical manufacturing. They are all focused on improving patient centricity. They want the most competitive products available to differentiate themselves in the marketplace. So when you combine these 2 together, I think what Nanoform has is really the next generation of formulation technology for the pharmaceutical industry. And as you can see here, these clinical results have clearly demonstrated our value and demonstrated that we can achieve better products for patients. And I'll leave with that note.

Thank you, Christian. Operator, we are ready for questions.

[Operator Instructions] The next question comes from Christian Glennie from Stifel.

Yes. Congrats on reaching this milestone. I guess a few questions. Maybe start off with the trial and the data itself. Obviously, at the moment, saying obviously promising results. Is there any -- I mean just trying to tease out a little bit more detail, if we can here around the nature of the data. And if we can't, when we should expect to get some data? And then just to confirm on the pill, the size of the pill you've got 4x the amount of active. But is it comparable size of pill because I understand these pills are generally relatively large in the first place, even the 40 mg. So is it comparable or potentially even smaller?

I'm happy to take that question, Christian. So Christian speaking. So just talking about the size of the pill, I think this is a great question. It's very easy to make a larger pill, but it has to be a pill that's easy to swallow. And there will be companies trying to make a single tablet, but they're likely to be horse-sized pills that patients won't swallow and possibly won't even [indiscernible] from the regulatory authorities. The size of our pill is comparable to the existing products that are on the market within the Xtandi tablets. So we have achieved something quite remarkable in the fact that we can fit so much drug load into a single tablet that is not possible with existing technologies in the marketplace. Could you remind me your first question, Christian?

Christian Glennie, you asked about the trial data. As you can imagine, this data is just very recently in plus and therefore, we are still in the process of shifting through and coming through for details. I think what we guided previously that we will have the readout completed during Q1 still holds. Important is that on the headline level, the numbers are already stamped, which means that we feel confident saying that we were very positively encouraged by what we saw details to follow, but many -- maybe fewer than you would like to see for commercial reasons.

Okay. And then just coming to the -- I guess, the addressing of the underlying issue. I mean, do you have any data as it relates to just stages of problem, the lack of adherence to Xtandi in particular here on the basis of this pill burden that obviously, your technology addresses and therefore, would be of interest to both a commercial partner and/or the regulators and the medical community.

So the short answer is yes, there are studies only and, of course, since this is a blockbuster product, there will be a lot of information that we are not even primitive. I think your question is really is to feel burden a relevant thing. As far as we understand, yes. And within the ON Consortium where people have been working with these kind of assets for a long time, the thinking is the same. Then when you come to the size, it's also well documented the literature that this page is a real problem both with elderly and prostate cancer is the disease prevalently in the elderly, but also as a result of many other comorbidities. So I think that the answer to both your questions is yes, we are addressing relevant problems. And of course, in an extension, we hope that being able to address them is not only commercially important but also clinically so...

Okay. And then one final one, and I'll get back in the queue. Obviously, terming, you've still got to do the further studies, but the key focus, I guess, starts to move to potential partnerships, you flag some prospect there. Can you give a bit more of a sense of the nature of those discussions. As you think about the next -- obviously, there's a -- everybody has agreed to pay 25% of future costs here in terms of development [ bozo ] scenario in which that partner may also take on the cost of the registrational trials. And then just finally on that, I mean, it sounds like Astellas as the originator here is not one of those potential partners? And if not, why not?

Albert, would you like to take this, both with the costs and then the partnering.

Yes. So if I -- the cost is -- nothing has changed there. So we are continuing, as we have said before, we are 4 partners in this project and everybody takes 25% of the cost. And therefore, we will get 25% of the net income as well. Naturally, as we have said before, during this year, we target to do one or several deals. The deals can be done either with value-added medicine companies or with the originator. And what we have seen so far is that this is a very interesting novel technology that has now clinical data on a very interesting alternative, both on the sort of the green angle, but also on the patient angle, 1 bill instead of 4 crystalline version of the bill instead of amorphous. So based on what we have learned during the last half year or so, it's very clear that the interest in our technology and the interest in this project is clear. When it then comes to with who we will do and when we will do it, the thing is that, as we have said, and we target to do deals during this year.

Peter, is there something else you would like to add potentially around the...

Yes. Maybe just to say that, of course, this potential discussions with different partner step-to-ship opportunities are handled under strict confidentiality. And therefore, we can't really go into the details of who we are talking with or what those discussions in detail look like. But as Albert very well put it, there is sort of interest there to the approach that has been taken.

Christian, I also, of course, can confirm that enzalutamide and Astellas are, of course, very closely linked and as you are well aware, prostate cancer has a certain progression and both when it comes to disease and when it comes to lines of treatment and medications. And it is thrilling to us to see that we have now good data on at least one of them.

The next question comes from Christopher Uhde from SEB.

I apologize for any background noise. I wasn't able to plan this in advance. So my question is related to some things that have been asked earlier. But I guess, the salient issue here most immediately is do you have anything you can say about whether or not -- or how confident you are that you will not need to optimize the nanoforming process further for the nanoenzalutamide before going to a pivotal study. That's my first question.

Okay. So here, as we recall. There are the two parts. One is the nanoforming part, which is to make the nanoparticles. And I'm fairly confident that we will not have to optimize the nanoforming part. That's the first part of your question. The second part of your question is we are very proficient in nanoformulations, and this is the reason why we are where we are now. And when it comes to the nanoforming part, I would like to first have the sort of detailed go to on the study before we sort of make bold statement related to that.

Okay. And then I guess the second question I have is I hadn't gotten this impression before, but well, let's put it like this. Is it still possible that the originators of enzalutamide could do a deal with you for this project? Or is it -- should we assume that the potential partners are more super generics-type players?

So here, you asked 2 questions in 1 question. From a purely logical point of view, the answer to your first part of the question. Of course, it is possible to make a deal with both originators and not originators. Then the probabilities for how this will play out. We don't have a crystal ball. So we are unclear about those probabilities. Nanoform's approach is very simple. Our next step now is to make sure that we can guarantee the security of supply in the upscaling of this program, and I'm very confident that we can do that. Albert, do you want to add something to this.

I would just add what Peter said earlier that in this industry, usually there might be NDAs and other reasons why we cannot talk too much about details. And of course, the fact is that the deal or the deals are done when the deal or the deals are done. And before that, it's just speculation. What we have today is we are very happy with the promising results we have received. And I would like to add one thing related to the earlier question from -- related to the ASDs and so forth. So this is one product within the prostate cancer area. And this is one where we have used STARMAP, our AI engine. And as you remember in our Q3 report, we showed that there are many ASDs, both within prostate cancer, but also other areas -- other disease areas where we have utilized STARMAP and where we have great opportunities to utilize the nanoforming technology. So have a look at that also as a reminder, about the link between star mapping first, having the projects, planning it and then, of course, executing it, doing the nanoforming, doing the formulation and then doing the clinical study before you go and have a serious negotiations with partners.

Maybe one more point also, Christopher. This is a very interesting readout because as we have said before, the reason we entered into this study is that we had good animal data. And now we have on a certain level, may be proven it's a too strong word, but still show a link between the vivo-vitro or the vitro-vivo correlation by which I mean the correlation between the animal data and human data. And I think this is very interesting because since this was done with the nanoformulation approach, this is also a very unique data globally now.

If there are no more questions, I would just end by saying that we are...

Albert, I think there are more questions actually.

Okay.