Nykode Therapeutics AS ($NYKD)

[Operator Instructions]. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Nykode's, CEO, Michael Engsig. Please go ahead, sir.

Thank you very much, Kevin. And also from my side, a very warm welcome to all our listeners to this our first quarter was this beautiful summer day in Oslo. A quick look at our forward-looking statements, which I think you are all familiar. On that basis, we will move forward as usual. As usual, it is a pleasure to have with me today here, Agnete Fredriksen, our Co-Founder, Chief Scientific Officer; and hear of Business Development; as well as Harald Gurvin, our Chief Financial Officer will take you through the highlights of the quarter, let deep dive into some of the data and of course, the financial numbers also. So for the new listeners, a very quick recap, Nykode is a clinical-stage immunotherapy company focused on leveraging our engine presenting cell targeted immunotherapy platform to discover new immunotherapies within oncology and autoimmune diseases. Our lead asset is abi-suva which we are developing in first-line head and neck. But we also have a very high conviction in [indiscernible] our individualized neoantigen therapy platform as well as our autoimmune disease program. We well capitalized with funding taking us into 2028, which is on the other side of all the important inflection points. It's been a busy quarter with a lot of progress on the -- in particular on abi-suva, but also interesting movements on our other programs. For abi-suva, we dosed the first patient in the randomized Phase II trial ability, which marks transition from a preparation into execution. Of course, a very important milestone, which sets us on track to release the interim data in 2027. We also at the ICHNO conference back in March, reported the interim data from the CO3 Part 1 trial, which also tests abi-suva in combination with Keytruda and pembrolizumab in first-line head and neck patients. We'll take you through some of the data at a point in this call here. We further elaborate some of the data at a presentation at the 1 month later, which provided further conviction to our immunogenicity data. We've reported some progress on our alternative disease platform, showing the ability to also drive modulation in human cells, a very important point in our -- on our path towards a driver. And then we have showcased our activities in the AI accelerated drug design world at the NEXUS conference I will just say a little bit about that, and we get to that in this presentation, yes. Brief update on abi-suva. As you know, we are currently focused on generating data from the first randomized trial with abi-suva, we've chosen first-line head and head for several reasons. One, it is a significant addressable patient population; and two, only 1 in 5 patients benefit from the standard of care. And even with a 12-month medium overall survival, there is plenty of room for further improvement for this patient population. In addition to that, we see most of the drop in development for first-line happen is focused on the HPV negative patient population, whereas abi-suva is focused on the HPV-positive patient population. But there is further upside for abi-suva. In addition to head and neck, we see a very large addressable patient population in the other cancer types driven by HPV-16 infections of which we have already generated very convincing data in the cervical cancer. So we do see further significant upside for Visa in the future. At the conference, we show interim data showing the overall from the 13 patients that were enrolled into the Part I trial. Part 1 was focused at investigating 3 different closes of abi-suva on top of standard of care, which is KEYTRUDA with this patient population. We reported an objective response rate of 39% in these 13 patients, which should be compared to what has been reported for the standard of care. So [indiscernible], which is around 19%. And -- so close to a side moment a doubling, if you compare those 2 numbers, that corresponds very well to what we saw in the CO2 trial where we investigated abi-suva on top of sub in the advanced cervical cancer setting. So with those 2 trials now, we do see a strong trend towards additive effect of abi-suva on top of checkpoint inhibitors. At the AACR both at the ICHNO conference and subsequently at the AACR conference, we provide further details on the [indiscernible] data which we've always said is extremely important for any immune therapy with the mechanism of actions of abi-suva. We do need to see a strong correlation between the immune response to the antigens and the clinical outcome, what we see on this slide here is an ability to drive a very strong antigen-specific immune response towards the 2 targets, E6 and E7. We've just chosen to show you 1 slide -- this one is probably the strongest slides showing the ability to drive this response in all patients dosed with 6 or 9-milligram again, it aligns well with what we saw in the CO2 trial when we tested this in cervical handset patients. So further adds to the very strong [indiscernible] abi-suva. This, of course, all these data strengthened our conviction that BLT, a randomized Phase II trial and first-line head and neck is the right next step for above. Shown here on this slide is the design of ability. And as I mentioned, we have moved from the phase of starting up the trial into execution. We are now approved in different EU countries in addition to the approval we received in U.K. before year-end. We saw the first patient dosed in May and we've already seen multiple sites being opened up and starting the search for patients. Our focus going forward is to expand the number of countries and sites for ability so we can make sure we have the sufficient number of sites engaged to recruit the approximately 100 patients in a timely fashion. Of course, everything is at generating the first interim readout in 2027. With those words, I'll hand over to Agnete to take us through an update on VB10.NEO.

Thank you, Michael. Yes. So in VB10.NEO, we have a laser focus on following the progress of our these days getting closer and closer to expected readouts from both [indiscernible] and Moderna on their late-stage Phase III importantly Phase III randomized trial with their individualized neoantigen therapy. So this will be extremely important for the future of our own BA. We do believe our VB10.NEO meets the requirement for an ideal IT technology and has several advantages over the mRNA technologies that Biotech and Moderna is pursuing and we are focusing on a cost content-based strengthening this position with a few key activities EBITDA program as we speak. In this quarter, we have focused on the antigen selection part with our proprietary NeoSELECT and also on continuing to improve the supply chain and we'll give you more details on the progress there in the next coming months, including our participation presentation at the [indiscernible] in July. So you can follow the progress in more detail when we come to this conference. Then some update on the tolerance program. Over the last year, we've seen numerous highlights on why we want to or to an antigen-specific immunotherapy program with our APC targeted technology. We have being able to show strong durable efficacy across disease models. We are constantly improving the number of disease models, and we see that both in the therapeutic and prevent its I think -- they all give you a bit more detail on the modular APC targeted platform and how using different APT targeting unit allows the immunotherapy to get into different cell types process and different efficiency presented to regulatory T cells and then also proliferating those regulatory T cells in a different manner depending on our unique proprietary APC technology. We have also seen unprecedented induction of both these pro proliferation of the action specific regulatory but also importantly, the next step in the cascade suppression of effective CD4 and CD8 T cells and also an effect on reducing or what is importantly. One of the key features that is important for taking this into the clinic in the commercial setting as be able to have a convenient delivery and also a favorable safety profile in addition to have a technology that can be manufactured as a standard biologic. And we are having a technology that is a fusion protein that can be manufactured through a very standard antibody manufacturing procedures, which is reducing the risk for taking this from preclinic to the clinic as we are seeing now also with our CMC efforts in this program. And today, we'll also see a bit more on the human APC translational data, but 2 ports where we do have a path from preclinic to clinic but be pretty effective when we take that choice. Obviously, it's important for everyone, but this technology is being developed the second program in Nykode on the back of a technology that's been clinically validated in oncology. So you've seen this mechanism of action figure before and how our APC targeting is able to induce regulatory T-cells and reduce effector BT cells. Today, we will focus on mostly on the human translational potential. So see that we have now created human version where we have human targeted units binding to human APCs, which is the first step of the mechanism of action here in the red figure. And then subsequently, these vaccine molecules are taken up by the [indiscernible] cells process and [indiscernible] presented on MRT molecules to regulatory T cells, which you also see today, we have a set of the system but nicely shows us how effective this is being going through the antigen presenting cells, which we can use and then to order to identify the optimal human versions of the APC targeting units for clinical use. And then thirdly, these regulatories of proliferation which I'll show you here. So here on this slide, you can see that we have now made human versions of our molecules that into human antigen-presenting cells. And when we compare that to nontargeted non-APC targeted version, we can clearly see that we have molecules now that binds to human antigen presenting cells. This is how we see the figure that it's shifted to the right on the figure. That means that the that our therapies are binding relevant. So -- and for the right part of this figure, a sophisticated setup where we have looked at how much of the disease epitopes are actually presented on the MG molecule after the entire molecule has been taken up, processed and presented and how much of this is actually then available to be presented to regulatories of. It's the same method. So you can see that if the shape of a car shifted to the right, you will have more and more of this effective antidepresentation on antigen presenting self -- at the end, as you can see, the targeted ABC targeted therapy is strongly presenting the antigens to regulatories on the HLA Class II action complex that we mentioned here. So it means we are getting closer and closer to have clinically ready drugs. And then another important factor of our technology is that depending on which APC targeting unit that we are employing in our molecules, we will have a different effect on the immune system. And in this particular system here, we can measure that if we use here a variety of 5 different APC targeting units that all look the same when it comes to the disease role antigens. We can see that these 5 APC targeted molecules are inducing a different proliferation of regulatory T cells and much better proliferation on these regulatory so than the non-targeted version and then the percentage of those that are [indiscernible] regulatory T cells, the first between the different versions of our technology. So all of these methods gives us much more and more insight into how precisely we can modulate immune system and choose a version of our platform will be ideal in order to treat a particular autoimmune disease. All of these are proprietary to Nykode. And we are -- you can also appreciate that we have a technology that can extremely precisely modulate which cell types that will be triggered for each patient here. Then I think I'll hand over to you, Mike, to give us some insights on the AI.

There very much Agnete and one of the questions we get most often from investors and analysts is how we are using AI and machine learning to drive the results and our work with new therapies at Nykode. And truth is that we've been using AI and machine learning for a very long time with the rate going back to when we started the VB10.NEO program. So AI and machine learning is a fundamental part of our VB10.NEO program. It helps us select the right neoantigens. In fact, it is one of the core competencies of core assets of our VB10.NEO platform, as we have mentioned a couple of times. So for us, machine learning and AI have been integral part of the company for close to 10 years now, which is probably also the reason why we've been remiss at communicating what we do in this area in Nykode. So now that we had a presentation at the Nexus conference showcasing some of our work, we thought we would also take the opportunity to provide a little bit of an insight at this webcast here. we will very likely be getting further insights into how we over the coming months in and also on the update on the Teneo at the Neogen conference during summer. So as I said, AI is a fundamental part of our VB10.NEO program. We've been using that to optimize each and every construct we've developed using it to train the algorithm and new select to select the right ones, the right targets for each patient based on the learnings we generated, we [indiscernible], we have also taken that over into our tolerance program and selection, which means we get better constructs, and we get them much faster and much cheaper. Wherever we use AI to optimize our work. We always have our senior scientists sit in and do the oversight, what we call human and the loop oversight and make sure that the scientific rate is never compromised in the work we do. This is specifically for our programs, but we're also using AI across the company also in the non-research and development-related functions focusing on building up AI literacy across my code. So everybody is using AI frequently. Now we're using it both to increase the knowledge sharing across the organization, but also to speed up our work processes and facilitate leading flow decision-making and editing. So do feel ourselves as a very AI-capable organization. We'll continue to saw this area and leverage all tools available. And of course, keep you updated on how we use this as a fundamental part of our programs in the future. With those words, I'll hand over to Harald to take us through the financial results.

Thank you, Michael. Looking at the income statement, other income of $240,000 for the first quarter related to government grants. Employee benefit expenses for the quarter were $2.9 million compared to $3.7 million for the same period in 2025, reflecting a reduction in the organization. Finance income and costs were net $2.4 million positive in the quarter, which mainly relates to interest income and unrealized currency movements on Norwegian kroner exposure. The reduction in income tax is due to a shift during 2022 from a deferred tax liability to deferred tax asset position, which in accordance with IFRS is not recognized in our accounts. So overall, we recorded a net loss of $4.1 million for the first quarter compared to a net loss of $1.4 million for the same period in 2025. Moving on to the balance sheet. We are still well capitalized with a cash position of $1.3 million at the end of the first quarter. With disciplined execution and strong financial focus, we will reach key inflection points within the estimated cash runway into 2028. This does not include the pending tax case where we have booked a noncurrent receivable amounting to $33.3 million at the end of the first quarter, as further described in the quarterly report. Nykode is confident that we will receive a positive ruling in the test case also based on advice from third-party tax exports. According to the secretary in the tax appeal board, they have started working on the case although slightly delayed compared to the letter we received earlier this year due to the case load. We can now expect a draft recommendation from the secretary later in July, which we then expect to communicate to the market. The updated time line would indicate the final outcome in August or September this year, but we understand from our advisers that the blast recommendation will serve as a good proxy for the final cycle. A positive outcome would push the cash flow way into 2029. Moving on to equity liabilities. We had total equity of $87.5 million, which represents a strong equity ratio of 93%. And with that, I will give the word back to Michael.

Thank you very much Yes. So finish off before we open up for questions with the outlook reminding everybody, we are very well capitalized with a runway takes us past a number of very important inflection points. Our focus for the next 12 months is obviously on the execution of ability, so expanding the number of countries and sites involved in the ability of making sure all investigators are motivated as searching for the patients that we need to be enrolled in this trial. We also do expect, according to the guidance we have received from our peers to see GP readouts from indigenization therapies. In particular, we are looking forward to see the data from the Phase III trial of Moderna and melanoma. And of course, we will be looking forward to see continued progress on our autoimmune disease platform [indiscernible] platform. A little bit longer, we're looking forward. We are focusing on being ready for the first interim analysis for Abili-T in 2002. And we do expect to see a continued string of peer readouts within the individualized engineer therapy as we progress through 2027 and 2028. So interesting times ahead of Nykode and with those words, I think we can open up for questions, Kevin.

[Operator Instructions] Our first question today is coming from Geir Holom from D&B Carnegie. How should we think about the level of market communication about the pace of patient recruitment going forward? And could you elaborate on the recruitment dynamics you're currently seeing at the clinical sites, particularly in terms of the pool of eligible patients and the level of competition from other ongoing trials.

Yes. Thank you very much for that question, Geir. So we obviously will, as usual, be using the quarterly webcast here to update on progress for ability I think that is the level of detail we will be providing. We did announce the first patient in as is usual for [indiscernible], but don't expect us to keep announcing in between numbers on patient enrollment. We will be updating you at the quarterly results. In terms of recruitment dynamics and the competition for patients. I think it varies across countries. We do see some countries where there is not too many trials going on with this patient population. And we see trials where the competition is slightly higher. Head and neck is traditionally a quite competitive area, but we mainly see the competition in the segment called the HPV negative patient population, which is specifically the ones we are not targeting with abi-suva. So the competitive situation in the HPV-positive Eden patient segment looks slightly more favorable for us. And as I said, there are countries where we do see competition. The obvious main competitor for micro right now in terms of patient recruitment is the ongoing drag from Biotech also searching for the same patients we are. And our understanding is that, that trial will be finalizing enrollment in not too distant future. I think we can take the next question.

Certainly. Our next question is a 2-part question. I'll ask them in 2 separate parts from Georg Tigalonov, ABG Sundal Collier. Could you please elaborate on whether the delay related to the pending tax case reflects any substantive feedback or request from the Norwegian tax authorities or rather a procedural issue related to processing times within the public system.

Thanks, No, our understanding this that this is purely a procedural issue due to the case flow they have and also the priorities they have to make according to law. So no other reasoning than that.

And the second part of the question is regarding ability, could you please elaborate on the latest planned geographic footprint, specifically how many clinical sites and how many countries are currently targeting in total and he wishes best regards.

So I can also, Georg, thanks for the questions here. We are, right now, as I said, open in 8 countries. All of them are in Europe. We very likely will be opening up somewhere between 2 to 3 additional countries, at least that's our plan right now. The projections that we have, which is based on data from other similar trials so that we will need somewhere between 40 million to 450 sites to enroll within the 2-year time frame that we've given ourselves. So that's the number we are aiming for probably building up towards -- and those of you who are familiar with clinical operations to know that not all 50 sites will be enrolling it's a rule of thumb. That's as I said, 20% of the sites will be enrolling the 80% of the patients. So if there was a way to find 20% of sites, of course, that will be easy, but in order to get the usually need to show a little bit over the target. So that's why we are aiming for probably up towards 50 sites into this trial. And I see, Kevin, we have received some questions in Norwegian. And I think I will try to read those. A question from Eric Hofland, First question is how many patients we expect to have recruited by the end of -- and what is the biggest bottleneck. We have not given guidance on a patient number by the end of 2016, but we have guided that we aim to provide an interim analysis based on 1/3 of the patients some 12 to 15 months after first patient enrolled. So I assume that will be slightly into the second half of 2017. And that means recruiting at least the 1/3 of the patient number there. We do intend to enroll up towards had patients into this trial here. Second question from Eric is how would we rate clinically meaningful results from this trial here. I fully get the intention with the question, but it is extremely difficult to simplify the success criteria of a trial like ability into 1 single number. Success is a very neat deal that is the clinical effect, which is measured in terms of progression-free survival and objective response rates, ultimately, overall survival. There is the safety questions, there is tolerability, there is imogenetitive and success will mean a good outcome on each of these scores. So it is very difficult to simplify the answer here. A good rule of thumb is you used to want to see at least 15 basis points increase on the objective response rate. Well, that is still a golden rule going forward. This is probably a good question. But at least if we take the data we have seen in the CO3 trial, if we would be able to replicate something that looks like what we saw in CD3 part 1, we will be extremely happy combined, as I said, with good outcome of ORR progression-free survival, a strong immune response correlated with the clinical outcome and a continued favorable safety profile as we saw from the interim VB-C-03 data. Need to see the next question. This is a question for you. Should we use Q1 as a normal level for the cost going forward?

Thank you. I think if you look at the guidance we've given, and we started out the year with just over $60 million in cash, and we've guided into 2028. So that's roughly $7.5 million per quarter against cash flow of roughly $10 million in the first quarter. So it will fluctuate a bit depending on progress on the trial. If you look at this quarter, we had some prepayments related to start-up of the ABILITY trial, roughly $2 million just on that, which is also reflected in the other receivables, which went from $1.6 billion to year-end to $4 million per the end of the quarter, which reflects prepayment for services and the ABILITY trial. So it will fluctuate a bit depending on the trial, but it should be less in some quarters and maybe the same in other quarters.

Very good. Thank you very much. And last question from Eric is I think that's question for you, Agnete. When do we think the partner interest for abi-suva will be, how great you all saw this enough is that going to be before or after the ability interim data.

As I think like partnering and partnering is a continuous process and the more data that we generate, including the interim data from CO3 is continuing to support partner negotiations. Obviously, Abili-T first randomized data indicating a delta between the KEYTRUDA on the arm and [indiscernible] will be very important for partners in that respect. So we are having a lot of discussions with partners moving towards that first next big inflection points that we have internally. And as a third aspect for our partners is also key data. So everything from other cancer active, including the individualized new asset therapies whether they are successful or not has some impact on other pharmas as to their interest in the cancer vaccine space broadly and not necessarily only for the VB10.NEO program. And then we have a couple of peers that are also pursuing an HPV 16 specific immunotherapy and expecting, for instance, some readout from BioNTech program [indiscernible] later this year. both positive and negative data can have a positive impact on the partnering interest from our peers as long as we are differentiated. We can also receive increased interest with negative biotech data and positive on tech data is also sponsoring for our program in our differentiation. So multiple potential steps coming in the near future, but continue to build the partners.

Thank you very much. I Thanks, Kevin. We have on the next one.

[Operator Instructions] Our next several questions today are coming from Luis Santos from H.C. Wainright. I'll ask them in several parts. The first part is both 6-milligram and 9 milligrams were safely cleared and both delivered 100% HPV-16 specific T cell response rates, given the single transient Grade 3 rash DLT at 9 milligrams and a comparable immunogenicity at 6 milligrams. What is the rationale for the dose or doses carried into Abili-T, are you taking 9-milligram forward as a single RP2D or running a dose comparison in the randomized portion to derisk a future label?

Yes. So from all objective parameters, as they look into the details about safety, clinical responses, immunogenicity, durability and everything is CO3 trial. It is -- obviously, it's a very safe product, basically, we cannot say that there is any safety difference between the different doses as we see it -- they're basically very similar clinical responses and there is dependency to higher immunogenicity in the main versus the 6 mg, and it's very standing to move forward with the highest those studies that is safe for the patient. In curing also, you may have seen an ICO patient case or a 9-week patient that has a quite remarkable clinical response. So we are moving forward with in 9 mg dose as a single 1 compared to a Keytruda therapy.

Very good. Next question?

Next question from Lois Santos from H.C. Wainwright, what does the prioritized lead indication for the VB10neo trial? What is the proposed design single-arm registrational randomized versus SoC and the CPI perioperative conjunctive and versus metastatic. And what specific efficacy bar ORR, PFS MRD negative or RFS would unlock the next clinical step.

Thank you very much for that question, Luis. And I'd like to think we have been very clear on our strategy with VBT in Neo. -- reflecting that the capital need to run any clinical trials in the individualized neoantigen therapy space would be very significant. We have chosen a strategy where we will focus on holding the technology right now, both in terms of looking for potential platform improvements, as already described earlier in this call year as well as making sure we have a lock in way to go clinical and supply setup. So in other words, to position ourselves as the most attractive unencumbered in deli neoantigen therapy, assets out there, ready to leverage any potential positive data coming out of, in particular, as we said Moderna's ongoing Phase III trials with in space. That means that it is not our plan to take BBT into a clinical trial on our own right now. Now what the trial would look like if we found a partner and the partner but to go into trial would, of course, be objective to good discussions with such a partner. We have experience with account discussions from our past partner and so we, of course, will come to such discussion with strong opinions and insights. And we, of course, welcome any dialogue with a future partner on where to focus design. I think we've been pretty clear that we think VB10.NEO in particular, long into an earlier-stage patient population, addressing locally advanced or adjuvant setting rather than going into a heavily pretreated hard-to-treat patients with heavy tumor burdens. But that's just how we see the space of I&T right now. If we can move to the next question.

Our next question from Louis Santos night is on your SIT platform, are BD discussions active? What stage are they at and what economic structure are you targeting? And the partnering on ASIT is delayed, would you self-fund through FIH or pause progression?

Yes. Thank you, Luis. As you may know, the field is a very interesting field. Autoimmunity has caused a lot of focus with pharma these days, and there are a lot of progress on more and more specific drugs for this patient group that is in high needle something that does not necessarily also require a chronic treatment. And we actually doesn't only take care of those symptoms and potentially cure the patients, so we do see a lot of interest from pharma in this program. There is nothing we can disclose when it comes to financial structures or how we would prefer to set up such a collaboration if we decide to pursue such a collaboration. So the next step for us now, as you may have followed our preclinical progress on the platform, we are getting [indiscernible] maturing in defining all our unique selling points with our technology compared to other continents, specifically immunotherapy technologies, which also enables us to make a decision on how to take it forward towards an important next step for us is a strategic review with the Board in August where we will define [indiscernible] programs forward next year.

Thank you. will be read of our question-and-answer session. I'll turn the floor back over for any further or closing comments.

Thank you very much to -- from us to all our listeners and for the questions. It's always good to meet you at this occasion here looking forward to keep you updated. And wishing all a good warm and successful summer. Thank you very much.

Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.